What is a true value adjudication?

What a true value adjudication decides

A true value adjudication asks the adjudicator one question: what are the works actually worth. It reopens measurement, valuation, variations, and any deduction the main contractor says it is entitled to, and produces a decision on the correct sum due for the work done. It is a valuation exercise, not a procedural one. That distinction is the whole point, because the Construction Act - the Housing Grants, Construction and Regeneration Act 1996, as amended by the LDEDC Act 2009 - draws a hard line between the sum that is payable and the sum that is correct.

How it differs from a smash and grab

A smash and grab adjudication recovers the Notified Sum on procedure alone. Under section 110A the main contractor must serve a Payment Notice within five days of the due date; if it serves none, the subcontractor's Application for Payment stands as the default notice and sets the Notified Sum. Under section 111 that sum is due in full by the final date for payment unless a valid Pay Less Notice was served in time. Miss both notices and the sum crystallises. A smash and grab enforces that crystallised sum without arguing value at all. A true value adjudication does the reverse: it accepts that the question of worth is open and asks the adjudicator to settle it. One turns on missed deadlines, the other on the numbers.

The sequencing rule from S&T v Grove

The two are not free-standing alternatives a main contractor can pick between. In S&T (UK) Ltd v Grove Developments Ltd [2018] EWCA Civ 2448, the Court of Appeal held that a paying party which has failed to serve its notices must first discharge its immediate obligation to pay the Notified Sum, and only then may it start a true value adjudication to recover any overpayment. As Coulson J put it, the employer “has to pay the amount claimed by the contractor ... But the employer is then free to commence its own adjudication proceedings in which the dispute as to the ‘true’ value of the application can be determined”. The right to challenge the valuation is real, but it is sequenced behind the duty to pay. A main contractor cannot answer a crystallised Notified Sum by launching a true value adjudication and withholding payment in the meantime - the money comes first, the argument second.

Why the sequence exists

The sequence protects the point of the Act. Section 108 gives either party the right to refer a dispute to adjudication at any time, with a decision due within 28 days of referral, extendable by 14 days with the referring party's consent, binding until finally determined and enforced by the Technology and Construction Court. This is pay now, argue later, the principle established in Macob v Morrison [1999] EWHC 254 (TCC). If a main contractor could stall a crystallised Notified Sum by demanding a valuation first, the cash-flow protection the Act was written to give subcontractors would collapse. S&T v Grove keeps the order intact: the notice regime bites now, and true value is where the parties reconcile the figures afterwards.

What this means for a subcontractor holding a crystallised Notified Sum

If you are a subcontractor sitting on a Notified Sum that has crystallised because no valid Payment Notice and no valid Pay Less Notice was served, the sequence is working for you, not against you. The sum is a debt due in full now. A main contractor threatening a true value adjudication is not a reason to hold off - it must pay the crystallised sum before that route is open to it, and any correction of value happens after the money has moved. Refer the crystallised sum by smash and grab if it is not paid, and treat a true value threat as what it is: a later argument about figures, not a defence to the payment due today. The one thing that undermines this position is a weak evidential trail, because both a smash and grab and any true value adjudication turn on dated, contemporaneous records of the application, the notices, and the deadlines.

Where Contra fits

The Register™ holds every live Application for Payment across every main contractor, and The Clock™ runs the section 110A and section 111 windows on each one. The moment both notice deadlines lapse, Crystallised Entitlement™ marks the Notified Sum as yours to force, with the demand and the evidence pack drawn from The Record™ - the dated, admissible trail that carries a smash and grab and holds firm if the main contractor later pushes to true value. Draw Forward™ (coming) will advance the Notified Sum before the main contractor pays. Contra keeps the sequence on your side: paid now, valued later. Request access.