Civil Engineering Reference
In-Depth Information
notice has expired but some serious defects
come to light, can the employer set-off the
value against the amount certified?
This is the employer's worst nightmare. Under clause 4.7.2, the architect must issue an in-
terim certificate, not later than five days after the due date, stating the amount considered
to be due in accordance with clause 4.8 and the basis on which the amount is calculated. If
the architect fails to issue a certificate, the contractor may issue a payment notice, or if the
contractor has already submitted an application for payment, that application is considered
to be a payment notice. If the employer wishes to pay less than the amount certified or in
the payment notice, the employer must give a written pay less notice to the contractor not
later than five days before the final date for payment, stating the amount considered to be
due and the basis on which it is calculated. If the notice is not given, the employer must pay
the amount stated in the interim certificate or payment notice, as applicable.
If serious defects make their appearance after the deadline for the pay less notice, the em-
ployer has no option but to pay. If the employer fails to pay, there will be no viable defence
if the contractor goes to immediate adjudication. There are similar provisions relating to the
final certificate in clause 4.14.
It has been known for an employer who can put before an adjudicator positive evidence
about the existence and value of the defects to persuade the adjudicator to support the lesser
payment even though it was made without proper notice. But to be frank, that depends upon
the appointment of an adjudicator with an inadequate understanding of his or her role.
Realistically,theemployermustpay,andifthedefectsarenotcorrectedbythedateofthe
next valuation, the architect must certify the amount properly due taking the defects into ac-
count.Thismayresult inanegative certificate. Inmost cases, thedefects will bemade good
and the overpayment to the contractor will rectify itself as work proceeds. In rare cases, a
dispute may develop and the contractor may become insolvent, leaving the employer in the
position of having overpaid. In that situation, the employer may well look to see whether
some action is possible against the certifying architect, the basis being that the serious de-
fects would have been discovered earlier if the architect had properly carried out inspection
duties. Whether that approach would be successful depends on the circumstances of each
individual case.
