In the latest webinar hosted by Payapps, a panel of construction industry professionals explored the role of ‘Smash and Grab’ adjudication, why it should be avoided, and the future of payment regulation for the sector
The panel of guest presenters, hosted by Anthony Puma, senior business development manager at Payapps, included award-winning qualified solicitor and mediator Rob Driscoll, and commercial director and adjudicator Chris Symeonides.
What is Smash and Grab adjudication?
Smash and Grab Adjudication was initially introduced as a ‘quick fix’ for payment disputes, and an alternative to costly and time-consuming court battles. However, as the panel explains, any adjudication causes disruption, long-term supply chain relationship issues, and lost profits.
It is the process whereby one contractor adjudicates against the other for not providing a valid and timely payment notice and/or pay less notice against a payment application made.
Chris Symeonides opens the discussion by talking about his personal experiences with Smash and Grab adjudications, and the difficulties that they impose on his role.
“Those who’ve been involved in an adjudication directly, particularly a party, they will know just how difficult it is, how time-consuming, how emotional a process it can be.”
He warns that individuals initiating an adjudication “lose sight sometimes of the scale of the issue – how much is the prize at the end of it, how much is the cost of getting there and particularly the impact on the rest of the business; the people, the relationships and other projects can suffer because everybody gets sucked into the beast that it becomes over a period of time.”
Smash and Grabs are well-established in the industry, but that doesn’t mean that they always run smoothly. Whilst adjudication is a useful tool for resolving issues and getting your entitlement, Chris explains that it is a last-resort option, to be done after dialogue between clients is finished, and meetings have failed.
Why do Smash and Grab adjudications occur?
“In my experience, most of it is down to human error. I’ve had one case where the person had Covid and was seriously ill and missed the payment notice.”
To avoid Smash and Grab adjudications, Chris advises that the best way forward is to make sure things are done correctly, and on time.
How the payment process has become more streamlined
Next, the panel hands over to Rob Driscoll, who talks about the history of adjudication policy, the Construction Act / Construction Contracts Act, and the future of payment regulation for the construction sector.
Rob talks about the change from paper to digital, and how construction processes have become more streamlined.
Rob adds that from a subcontractor’s perspective, it is important to know the amount of money they are going to receive: “As the people receiving cash would prefer to know what they are going to get paid because they can plan with that. They know in several notices across the system what they’re getting paid, and then they can have conversations around that”.
Cash-flow available in real-time
Payapps has a global reach across the UK and Ireland, and further afield in Australia and New Zealand.
“Whether you are a tier one, large scale contractor, regional contractor, a fit-out MEP foundation, or a specialist contractor, Payapps links every company by collaborating on the submission and assessment of applications for payment at whatever stage you are in that construction lifecycle.” – Anthony Puma, senior business development manager, Payapps
Anthony Puma states there is a recurring theme that will resonate with many, of “an unhealthy reliance of spreadsheets, emails, manual handling and then transforming to a process that has that complete transparency, has less duplication, less errors, and removes all the unnecessary administration and reconciliation.” He explains that “this is the breakthrough enjoyed by so many that have elected to use Payapps.”
At Payapps, cashflow across the supply chain is important. By having this available in real-time, clients are able to predict better clash flow outcomes, collaborate, and keep everyone informed.
Payapps keeps both parties aligned with the Construction Act / Construction Contracts Act, and sets out a clear adherence to the terms of a contract.
If you want to learn how Payapps can streamline applications for payment across your supply chain, book your demo today.
