A true value adjudication is a crucial aspect of any construction payment dispute. Whether you are a contractor chasing unpaid sums or an employer concerned that you have overpaid, understanding how and when to use a true value adjudication, and the legal rules that govern them, can make a considerable difference to the outcome of your dispute. At Altion Law, our construction team advises on all aspects of payment disputes, offering legally sound, commercially focused advice.
For a confidential free discussion, call us today on 01908 538295, alternatively email us at Hello@altion-law.co.uk or complete our Free Enquiry Form and we will call you back.
What is a True Value Adjudication?
A true value adjudication is a process by which an adjudicator is asked to determine the actual amount due under a construction contract. Rather than focusing on whether the correct notices were served in time, the adjudicator examines the substance of the claim itself. They consider the work carried out, its quality, any relevant deductions, and what sum the contract genuinely entitles a party to receive.
A true value adjudication is different from what is commonly called a ‘smash and grab’ adjudication. Parties use smash and grab adjudications where a payer has failed to issue a valid payment notice or pay less notice within the contractual time limits. In those circumstances, the payee becomes entitled to claim the full notified sum, regardless of what the work was actually worth. It is a procedural remedy rather than a substantive one.
True value adjudication goes further. It looks at what sum is actually payable, once all of the facts, the contract terms, and the relevant deductions are properly considered.
Our specialist construction solicitors and barristers can advise you on which type of adjudication is appropriate for your situation and guide you through the relevant process.
When can a True Value Adjudication be used?
A true value adjudication can be commenced in a variety of circumstances. Most commonly, employers use it following a smash and grab adjudication. Having paid the notified sum as required, they then seek to establish that the actual value of the work was lower than what they were obliged to pay, and to recover any overpayment through the true value adjudication process.
However, it is not only the paying party who can bring a true value adjudication. A payee may also use this route to argue that the true value of their work exceeds the notified sum, for instance where an application has been undervalued or where interim payment certificates do not reflect the full extent of work completed.
There is no mandatory waiting period between the conclusion of a smash and grab adjudication and the commencement of a true value adjudication, but the notified sum must first have been paid. That precondition is firm, and attempting to shortcut it risks a jurisdictional challenge that could derail the process entirely. Our solicitors can advise you on the correct sequencing and the risks involved before any proceedings are issued.
What happens during a True Value Adjudication?
Once the true value adjudication is underway, the adjudicator will consider all relevant evidence relating to the value of the works. That typically includes the contract, the payment application, any certificates issued, evidence of defects or incomplete work, and any sums the paying party claims to be entitled to deduct.
Unlike a smash and grab adjudication, where procedural failures can be decisive, a true value adjudication is determined on the merits of the substantive claim. This means that preparation and the quality of evidence presented are critical. Adjudications move quickly. The default period for a decision is just 28 days from referral, extendable to 42 days with the referring party’s consent.
Al Altion Law, we can assist with the drafting of referral notices and responses, the preparation and presentation of evidence, and representation throughout the entire true value adjudication process.
How Altion Law can help
The financial consequences of a poorly handled true value adjudication can be significant. A contractor who has won a smash and grab adjudication may find that a subsequent true value adjudication reduces the recoverable amount considerably, with the employer then seeking to recover the overpayment through set-off, retention sums, or further proceedings. An employer who fails to comply with the pay-first requirement before commencing a true value adjudication may find their challenge dismissed on jurisdictional grounds before it even gets started.
Our expert solicitors and barristers have recovered millions of pounds for construction clients through adjudication proceedings over many years. We support clients involved in all types of payment disputes, from initial advice and notice compliance through to full adjudication proceedings and enforcement.
Whether you are a subcontractor, main contractor, developer, or employer, we can help you understand your position, your options, and the risks before you choose a course of action. Construction adjudication is a technical and time-pressured process, and the quality of legal support at every stage can determine the result.
For a confidential free discussion, call us today on 01908 538295, alternatively email us at Hello@altion-law.co.uk or complete our Free Enquiry Form and we will call you back.
