Spec Finish

Legal Len Bunton, Owner at Bunton Consulting Partnership, provides guidance for contractors on what steps they can take if they are not getting paid. NOT GETTING PAID? STEPSTHATYOUCANTAKE… 26 www.thefis.org I N the November issue of SpecFinish we featured the findings of research conducted by FIS, Barbour ABI, AMA Research, and the University of Reading regarding procurement practices and the contractual mechanisms that underpin the fit-out sector. In the feature, the promptness of payment indicated that payment practices are still a concern with only 6% of specialist subcontractors and 10% of main contractors getting paid in less than 30 days. Continuing on from this important theme, Len explained what steps can be taken if you are simply not getting paid. He said: “Some of this is self-induced, and that is why I have been working with a number of organisations to help them improve their financial management of contracts. I emphasise, that your payment applications need to be made on time and be fully detailed – if you fail to do either of these, or even worse, both of these, then you will not get paid what you think you are due. However, there are other actions you can take. “Keeping records on projects is absolutely critical. This includes letters, and emails and making sure they are located somewhere safe. Sometimes people move on from projects, or leave the company, so records need to be preserved. Other key documents include notes and minutes of meetings, site instructions, variation records and photographic/video records. Just remember that you may have a dispute developing over months, or even years, and someone like me will want to see your records”. Len explained he was on a site before the pandemic, and the site manager had a camera on his hard hat and was walking around taking photos and dictating notes. The site manager said: “He was able to successfully demonstrate the extent of disruption caused by the client wanting a significant design change. There are pieces of technology on the market to assist, so have a look”. Len stated: “One trend I have noticed recently, as an Adjudicator, is seeing matters being referred to adjudication on contracts that were completed two to three years ago. I do not know if this is down to contractors just chasing old issues, or if it is because of cash flow problems. Anyway, the point is that if the records are good, and had been archived correctly, then this is a major step forward”. So, assuming a worst-case scenario, Len asked: “What can you do if you run into a brick wall and cannot get paid”. He said: “I greatly favour keeping talking to try and narrow the issues down if you can”. He explained one of the difficulties he comes across frequently is that the contractor is probably having his concurrent battles with the employer and his consultants, and below that there are a line of subcontractors all arguing with the contractor. The issues keep getting batted back and forward for months. Len said: “I also strongly favour the RICS Conflict Avoidance Process – CAP 1 . FIS has signed the Conflict Avoidance Pledge and is encouraging all its members and readers of SpecFinish to do likewise”. Len went on to explain this is an early intervention process to prevent live issues developing on a project into a dispute. It is a collaborative way in which to get matters resolved. However recently there has been a trend to use CAP to resolve payment issues. This would involve bringing in an experienced construction person to talk to the parties and to make a non-binding recommendation to both sides, and it is very cost-effective and quick. Len said: “In one case I was involved in we decided that the CAP recommendations would be binding, so that the parties could get finality and move on – it worked very well”. Len concluded by saying: “I would really encourage all FIS members and readers of SpecFinish to sign the RICS Conflict Avoidance Pledge.” https://www.rics.org/uk/products/ dispute-resolution-service/conflict- avoidance-pledge/ Contractual Helpline – England, Scotland and NI The Contractual Helpline is provided by Len Bunton at Bunton Consulting Partnership. For FIS members Len provides an initial free consultation of one hour to discuss and review specific issues faced and to help develop a strategy to address them. Should further advice and support be necessary Len will agree on the necessary fee levels with each FIS member. Contact FIS on 0121 707 0077 for details. Source 1. www.rics.org/uk/products/dispute-resolution-service/conflict-avoidance-pledge/ Len Bunton, Owner at Bunton Consulting Partnership