Enforcing Adjudicator’s Decisions in Smash-and-Grab Claims

The recent decision of the Technology and Construction Court (“TCC”) in VMA Services Ltd v Project One London Ltd[1] marks another significant judicial reaffirmation of the principles governing “smash-and-grab” adjudications. It also re-engages with the interplay between the statutory payment regime under the Housing Grants, Construction and Regeneration Act 1996 (as amended) (the “Act”) and the adjudicator’s jurisdiction to grant monetary awards in favour of the responding party.

Sitting as Deputy High Court Judge, Adrian Williamson KC provided clarity on the enforceability of a monetary award in favour of a respondent contractor where the adjudicator had found a “notified sum” to be due under the Act. This case reinforces the sanctity of the payment regime and the limited ability of the paying party to circumvent its immediate obligations.

Brief Facts

On or around 16^th October 2023, the Claimant, VMA Services Ltd (“VMA”), was engaged by the Defendant, Project One London Ltd (“POL”), under a subcontract incorporating the JCT Design and Build Sub-Contract Conditions 2016, for design and installation of mechanical works at a property in London. On 21^st June 2024, VMA submitted its Application for Payment No. 8 in the gross sum of £274,259.81, leaving a net amount of £106,434.88 due after deductions.

Crucially, POL failed to issue a valid Payment Notice or Pay Less Notice in response. Subsequently, on 16^th December 2024, POL commenced a “true value” adjudication (“TVA”). In response, VMA contended that, in light of POL’s failure to pay the notified sum, the TVA could not proceed, and that the adjudicator should order payment of the notified sum.

 This blog is a part of our Global Arbitration Services.

Breaking Down the Adjudicator’s Decision

The Adjudicator identified seven key issues for determination, including the validity of VMA’s payment application, whether POL had issued a valid Payment or Pay Less Notice, the resulting notified sum (if any), entitlement to interest and compensation under the Late Payment of Commercial Debts (Interest) Act 1998, the gross and net value of the works, any potential overpayment by POL, and responsibility for adjudication costs.

The Adjudicator in his adjudication dated 10^th February 2025 (the “Decision“), held that VMA had submitted a valid payment application and POL had failed to issue a timely Payment Notice or Pay Less Notice, resulting in £106,434.88 being due as the Notified Sum. Consequently, the Adjudicator declined to assess the true value of the works, reiterating that compliance with the immediate payment obligation was a precondition for any TVA. He ordered POL to pay the Notified Sum together with statutory interest and VAT, confirming that the failure to pay extinguished POL’s entitlement to challenge the valuation at that stage.

VMA sought summary judgment to enforce the adjudicator’s decision rendered in its favour.

Issues Raised Before the Court

The primary legal issue before the TCC was whether the adjudicator had jurisdiction to order payment of the notified sum in favour of VMA, the responding party to the adjudication. Specifically, the Court was asked to determine:

1. Whether the adjudicator exceeded his jurisdiction by making a monetary award in favour of the respondent.
2. Whether the adjudicator’s decision was enforceable notwithstanding that the respondent was not the referring party.
3. Whether any other grounds (natural justice or jurisdictional overreach) could render the adjudicator’s decision unenforceable.

Legal Framework Governing Payment and Adjudication

The contractual dispute in this case was governed by the Act and the Scheme for Construction Contracts 1998 (“the Scheme“), both of which form the statutory backbone of adjudication and payment procedures in the UK construction industry. A key legislative objective underpinning the Act and the Scheme is to ensure uninterrupted cash flow within the construction sector by requiring timely and structured payments.

Under the amended provisions of the Act, specifically sections 109[2] to 111[3], if a valid application for payment is made by the contractor, and the employer fails to issue a Payment Notice or a Pay Less Notice within the stipulated timeframe, the employer becomes liable to pay the full amount claimed, referred to as the “Notified Sum.”

The jurisprudence developed around so-called “smash-and-grab” adjudications has clarified several principles, most notably through the judgment of O’Farrell J in Bexheat Ltd v Essex Services Group Ltd[4]. The Court in that case reiterated that while an employer may pursue a separate “true value” adjudication to challenge the actual worth of the works under Section 108, this right is subordinate to the immediate obligation to pay the notified sum under Section 111. Unless and until the employer complies with this primary obligation, any attempt to adjudicate the true value is impermissible.

This principle has been further endorsed in AM Construction v The Darul Amaan Trust[5], where the Court clarified that the payment obligation arises independently of whether the contractor has first obtained an adjudication award.

The law also recognises that a responding party in adjudication proceedings is entitled to raise a wide range of defences and counterclaims, provided they fall within the scope of the referred dispute. As summarised in Global Switch Estates 1 Ltd v Sudlows Ltd[6], a responding party may:

• Raise any arguable defence or valuation argument related to the claim,
• But may not widen the adjudication’s scope by introducing unrelated disputes, and
• May not independently recover monetary sums by way of counterclaim unless forming part of a valid set-off.

Finally, in Bresco Electrical Services Ltd (in liq) v Michael J Lonsdale (Electrical) Ltd[7], the Supreme Court reaffirmed that while a respondent may put forward cross-claims or set-offs as a defence, such submissions do not entitle the respondent to a separate monetary award unless properly referred. Taken collectively, these legal principles reinforce the “pay now, argue later” policy objective of the Act and establish a clear procedural hierarchy, where compliance with the notified sum obligation is a prerequisite to challenging valuation or raising broader claims.

The Judgment

The Court ruled in favour of VMA, enforcing the adjudicator’s decision in full. Adrian Williamson KC concluded that:

1. The adjudicator had jurisdiction to determine that a notified sum was due to VMA.
2. The Scheme for Construction Contracts permits adjudicators to determine liability to make payment under the contract.
3. Once a sum has been established as a “notified sum”, the obligation to pay is immediate, and any further adjudication on the true value is subordinate to this obligation.

The judge found no procedural unfairness or breach of natural justice and noted that POL’s other challenges merely reflected dissatisfaction with the outcome rather than any substantial jurisdictional defect.

Analysis

This case exemplifies the principle that the statutory right to payment of a notified sum under s.111 of the Act is a “pay now, argue later” regime. Once a party has made a valid application for payment and the paying party fails to serve a valid Payment or Pay Less Notice, the latter is obligated to pay the notified sum, irrespective of any perceived overvaluation.

The TCC relied heavily on established precedent, including:

• Bexheat Ltd v Essex Services Group Ltd[8]: affirming that the right to adjudicate the “true value” is subjugated to the obligation to pay the notified sum.
• WRW Construction Ltd v Datblygau Davies Developments Ltd[9]: supporting enforcement of an adjudicator’s valuation in favour of the responding party where jurisdiction was not in dispute.
• Bresco Electrical Services Ltd v Michael J Lonsdale (Electrical) Ltd[10]: reiterating the broad scope of defences available to responding parties in adjudication.

The Court agreed with VMA’s submission that requiring a further adjudication for payment, despite a binding decision on the notified sum, would run counter to the objectives of the Act, i.e., certainty, cash flow, and speed.

Implications

This judgment has several important implications for the construction industry:

1. Reinforcement of cash flow protection: The decision underscores that a paying party cannot initiate a “true value” adjudication while still in default of its obligation to pay a notified sum.
2. Clarity on respondent’s rights: It clarifies that an adjudicator has the jurisdiction to order payment to a respondent if the notified sum has been validly established, without requiring the respondent to initiate separate adjudication proceedings.
3. Efficiency in enforcement: The judgment avoids the procedural inefficiency of requiring further adjudication where a monetary obligation has already been crystallised.
4. Limitation on tactical adjudications: Employers or main contractors cannot use true value adjudications as a tactic to defer immediate payment obligations, thus rebalancing the scales in favour of subcontractors and smaller players.

Key Takeaways

1. The failure to issue a valid Payment Notice or Pay Less Notice results in a binding obligation to pay the notified sum under s.111 of the Act.
2. An adjudicator is empowered to make a monetary award in favour of a responding party where the notified sum is established.
3. The right to adjudicate on the “true value” does not override the immediate obligation to pay the notified sum.
4. Courts will enforce adjudicators’ decisions in “smash-and-grab” cases where statutory procedures have not been followed, even if the respondent is the party benefiting from the award.

Conclusion

VMA Services Ltd v Project One London Ltd represents a robust reaffirmation of the principles surrounding smash-and-grab adjudications and the enforcement of adjudicators’ decisions under the UK construction adjudication regime. The ruling not only reinforces the statutory right to prompt payment but also discourages dilatory tactics that undermine the Act’s intent. It further confirms that once a notified sum is due, the courts will not hesitate to enforce the adjudicator’s decisions in the interest of commercial certainty and cash flow preservation. This case is a timely reminder for all construction stakeholders, particularly employers and main contractors, to meticulously adhere to the statutory notice requirements or risk swift enforcement proceedings.

Foot Notes……………………………………………………………………

[1] [2025] EWHC 1815, decided on 18^th July 2025

[2] It is a provision for notices and the requirement upon the payer to pay the sum notified.

[3] It creates an immediate obligation to pay the notified sum

[4] [2022] EWHC 936 (TCC)

[5] [2022] EWHC 1478 (TCC)

[6] [2020] EWHC 3314 (TCC)

[7] [2020] UKSC 25

[8] [2022] EWHC 936 (TCC)

[9] [2020] EWHC 1965 (TCC)

[10] [2020] UKSC 25