Security of Payments Series

The 6 Steps to Making a Successful Payment Claim

In the Construction Industry “Cashflow is King“.

When it comes to business success it is so important to keep money flowing into your business. The Security of Payments Act (SOPA) is a fast track debt recovery method specific to the Construction Industry.

SOPA helps contractors, subcontractors, consultants and suppliers get paid when work is completed. When SOPA is implemented correctly and with paperwork in order, the application process to obtain a court order is fast and cost effective.

There are 6 steps to making a successful claim –

Step 1. Claimant makes a Payment claim

To make a successful claim you must –

• Identify the work done or goods or services supplied.
• Identify the amount to be claimed.
• Clearly state that it is made under the Act – Write on it “This payment claim is made under the Building and Construction Industry Security of Payment Act 2002.”

A ‘Reference Date’ is a precondition to a valid Payment Claim.

Ask yourself the following questions;

• Do I have a Reference Date?
• Have I served the Payment claim ‘on and from‘ the Reference Date and not before?

Step 2. Payment Schedule

The respondent has 10 business days to issue a payment schedule.

• The payment schedule must identify the payment claim to which it relates.
• The amount the respondent intends to pay and the reasons for any difference from the original amount on the payment claim.
• Identify any amounts that the respondent believes are ‘not included’.

Consequences:

• No payment Schedule: The entire debt is due and judgment can be entered.
• Payment Schedule: If you disagree with the Scheduled amount, proceed to Adjudication.

Step 3. Section 18(2) Notice

If the respondent fails to pay or provide a payment schedule on time you must give notice before adjudication.

The Section 18 (2) notice must be issued within 10 business day of the due date.

The Section 18(2) notices gives the respondent a further 2 business days to provide a payment schedule.

This notifies the respondent that you intend to apply for adjudication.

Step 4. Adjudication

When making an Adjudication Application to the Authorised Nominating Authority (ANA) there are strict time limits set out by the Act.

If the Respondent has provided a Payment Schedule – Apply within 10 business days of receiving the Payment Schedule.

If the Respondent has not provided a Payment Schedule – Within 10 business days of the payment being due, notify the respondent with a section 18(2) notice, and then lodge the adjudication application within the next 7 business days.

The Claimant

The claimant lodges an Adjudication Application with the ANA and the Respondent.

The Adjudicator accepts the nomination within 4 business days of the application being made.

The Adjudication process is completed within 10-15 business days of accepting the adjudication.

The Adjudication determination is given to the ANA in writing with reasons explaining the outcome.

Step 5. Adjudication Determination

The respondent must pay the Adjudicated amount either within 5 business days of the receipt of the determination or by the due date, whichever is the later.

Step 6. Enforcement

If the Adjudicated amount + Adjudicators Fee + Interest is not paid, the Claimant applies for an Adjudication Certificate from the ANA. An application can then be made to the County Court to obtain judgment based on the Adjudication Certificate.

For further Information..

Level Playing Field Lawyers are here to guide and assist you in the recovery of your debt. Following the 6 steps to making a successful payment claim will enable you to recovery your debts in a fast and cost effective manner.

Please email us on [email protected] or call us if you have any questions or queries on 9041 4674.