This Article was published in Contract Journal, 5 March 2008, page 3

Barratt 3% Deduction Ruling Triggers Surge of Reaction

Trade contractors have been flocking to a dispute specialist after his landmark victory over Barratt for deducting 3% from agreed payments.

CJ revealed last week that Southern Glass Services won a case against Barratt Southampton after the adjudicator ruled cash was "improperly withheld" by the housebuilder.

Barratt has paid Southern the £19,000 it owed, plus a further £5,400 to cover interest charges.

And now trade contractors in similar fights with housebuilders are beating a path to the door of dispute resolution specialist PJ English Associates.

Director Peter English said potential cases involved Barratt and Bloor Homes and a string of main contractors.

English said: "Subcontractors don't tend to know what their rights are when money is withheld and they tend to cave in unnecessarily. They need to talk to a dispute resolution company or a quantity surveyor who acts in dispute resolution cases."

His firm has brought 470 cases to adjudication over the past six years and 60% of these fell into a single category - the main contractor having withheld money without having issued a withholding notice.

English said his firm had won every single one of these cases. He said: "The law is that if you have not issued a withholding notice, you can't retain money, so what we're fighting is almost an open and shut case."

Of the other 40% of the 470 adjudication cases he has been involved in, the firm won all bar one. The most common thread here were cases where a withholding notice had been issued but the main contractor lacked the evidence to substantiate its heavy handed move.

NSCC chief executive Suzannah Nichol said: "This case clearly demonstrates that the letters sent by Barratt, Bellway Homes, Charles Church, David Wilson Homes, Nicholas King Homes and Taylor Wimpey are not sufficient to allow payment deductions to be made and that adjudication is an effective means of resolving this type of payment dispute."

John Leitch, Contract Journal - john.leitch@rbi.co.uk