How to Defend a Smash and Grab Adjudication: Payment notice or payless notice invalid

If you are an employer, main contractor or subcontractor facing a smash and grab adjudication because a payment notice or pay less notice is said to be invalid, you may feel you have no defence and no time to think. This guide explains, in plain English, how these claims work, what you can realistically argue, and the practical steps you should take in the first few days.

What a “smash and grab” adjudication actually is

The name sounds dramatic. The reality is often worse.

A “smash and grab” adjudication is where the claiming party asks to be paid the full amount of their application. Not because the work is worth that amount, but because you failed to serve a valid payment notice or pay less notice in time. The adjudicator is not being asked to carry out a full valuation of the works. They are being asked a narrower question: is there a valid notified sum, and did you miss the deadline or serve a defective notice? If the answer is yes, the sum applied for usually becomes the “notified sum” that must be paid, subject to any jurisdiction or natural justice issues.

These disputes arise under the Housing Grants, Construction and Regeneration Act 1996, as amended by the Local Democracy, Economic Development and Construction Act 2009. The Act applies to construction contracts as defined in section 104, subject to the exclusions in section 105. Its core message is simple: cash flow is king. Miss your notice deadline, and the paperwork takes priority over the merits.

Why you can be on the hook even when the valuation is wrong

This is the part that shocks most clients.

The adjudicator is not deciding what the work is actually worth. They are deciding whether a valid notice was served, whether a notified sum has arisen, and whether the payment deadline was met. That means you can be ordered to pay a significant sum even where the application is obviously inflated or the work is defective.

The true value of the work can still be challenged, usually in a separate adjudication or in court or arbitration proceedings, rather than within the initial smash and grab adjudication itself. In the meantime, you face real pressure on cash flow, on banking covenants, and on site relationships. That immediate pressure is exactly what claimants are counting on when they launch these claims at short notice.

Understanding that distinction – between a technical payment notice dispute and a genuine valuation exercise – is the starting point for any proper defence.

First 48 hours: what to do immediately

Time is your biggest enemy. Adjudication timetables are punishing.

The claimant will often have spent weeks preparing before serving anything on you. Once the referral notice lands, the adjudicator will usually set a timetable for your response – often just seven to fourteen days, sometimes shorter. The adjudicator must then reach a decision within 28 days of the referral, extendable by a further 14 days with the referring party’s consent, or longer by agreement. There is no room for delay.

Your first move: pull together the core documents. The contract and any amendments, the payment application, your payment notice or pay less notice, evidence of when each document was served, and any relevant correspondence. Without that bundle, you cannot properly assess your position.

Your second move: get specialist advice. Now, not tomorrow. An early review by solicitors who know construction adjudication can uncover jurisdictional and technical points that must be raised at the outset – or risk being lost entirely. The cost of that advice is usually modest compared with the sums at stake. 

Is your payment notice or pay less notice really invalid?

Just because the claimant says so does not make it true.

A surprising number of smash and grab claims are built on bold assertions about defective notices that simply do not hold up. Careful review of the contract wording and the factual sequence often tells a different story.

The adjudicator will look at several things. Whether the notice was served by the right contractual method. Whether it clearly identified the sum due and the basis of calculation. Whether it was served on time by reference to the specific payment timetable. What counts as “clear enough” is often a matter of contractual interpretation and commercial common sense.

Documents the claimant dismisses as “just a certificate” or “just an email” can sometimes qualify as valid payment notices or pay less notices. In some contracts, employer’s certificates or interim certificates are expressly intended to operate as payment notices. Do not accept the claimant’s characterisation without testing it.

It is also worth scrutinising whether the claimant’s own application was valid. If it does not meet the contractual or statutory requirements to qualify as a payment notice, there may be no effective notified sum in the amount claimed, and you then need to consider whether your own default payment notice obligations were triggered. That can undermine the smash and grab at its foundation.

Common technical defences

Every case turns on its own facts. But certain themes come up repeatedly.

The most common defence is straightforward: a valid payment notice or pay less notice was served, and the claimant has mischaracterised or ignored it. Beyond that, there are arguments about whether the application itself was a valid payment notice. If it was not, there is no notified sum in the amount claimed, and the claimant’s technical case may fall away.

Timing and sequencing arguments are also worth exploring. Contract dates are sometimes miscalculated. The timetable may have been affected by variations, suspensions, or changes to the contractual mechanism. What looks like a late notice might, on analysis, be in time.

All of these points are fact‑sensitive. They need to be built from the contract, the payment history, and the Act – not from assumptions.

Jurisdictional challenges in smash and grab adjudications

Jurisdiction is one of the most important battlegrounds in adjudication.

If the adjudicator lacks jurisdiction, any decision they make is vulnerable to challenge on enforcement – or may be a nullity entirely. For a paying party facing an apparently weak technical case, a well‑founded jurisdictional objection can be the difference between paying out now and living to fight another day.

Several issues can arise. An adjudicator is generally only entitled to decide one dispute at a time, unless the contract expressly allows multiple disputes or the parties agree at the time to broaden the reference. A dispute referred before it has properly crystallised (where there is not yet a clear dispute, rather than just ongoing discussions) may fall outside the adjudicator’s remit. The adjudicator may have been appointed under the wrong procedure.

These challenges must be raised promptly and carefully. Some must be reserved in writing at the outset, or you risk being treated as having accepted jurisdiction simply by participating. At the same time, overly technical points without real merit irritate adjudicators – and can damage your credibility on the points that matter.

Getting that balance right takes experience. 

What you can and cannot argue on the substance

This is where many defendants run into difficulty.

In a properly framed notified sum dispute, the adjudicator is not being asked to carry out a full valuation of the work. Detailed evidence about defects, over‑measurement, or delay will usually not assist. The adjudicator may simply decline to engage with it. That feels deeply unfair – especially when the claimant’s account is far from reality.

In limited circumstances, some substantive arguments remain available. You may be able to argue that no payment fell due at all, because the relevant payment cycle was never triggered, or no valid application was made within the contractual window. That is a question of whether any payment obligation arose, not a valuation exercise. The distinction matters.

Set‑off and abatement arguments are different. In light of the Court of Appeal’s decision in S&T (UK) Ltd v Grove Developments Ltd and later cases, set‑off and abatement are very tightly constrained as defences to a notified‑sum claim, and in many situations will not be available at all. Do not assume they are open to you without specific advice on your facts.

In many cases, the right tactical approach is this: focus the first adjudication on resisting the claim on technical and jurisdictional grounds. If that fails, pursue the true value in a separate adjudication. That is the correct sequencing under current law – not a simultaneous exercise within the same reference.

Using a follow‑on “true value” adjudication

Losing a smash and grab adjudication is painful. It is not necessarily the end.

The Court of Appeal confirmed in S&T (UK) Ltd v Grove Developments Ltd that a paying party ordered to pay a notified sum can commence a separate adjudication to determine what the work is actually worth. If the true value is less than what you paid, you may be entitled to repayment – or to set off the overpayment against later sums.

The sequence matters. In most cases, you will need to comply with the smash and grab decision first. Pay the notified sum promptly. Only then can you realistically pursue the true value. Any contractual pre‑conditions, such as final account or certification procedures, also need to be factored in carefully before a true value dispute is referred. The detailed rules on this continue to develop.

But a well‑timed true value adjudication can restore the balance. It also gives you real leverage in settlement discussions. A claimant who knows you are prepared to fight on both fronts – defending the smash and grab and pursuing the true value – is far more likely to negotiate sensibly.

Practical steps if you are already facing a claim

Act now. The timetable will not pause while internal discussions take place.

Start by identifying a single decision‑maker with authority to approve tactics, sign off documents quickly, and give instructions without delay. Internal alignment is critical. Disagreements about risk appetite or settlement strategy need to be resolved fast, not over several rounds of email.

Work with your construction adjudication solicitors to map out the defence. That typically means a detailed response covering jurisdiction, the validity of notices, the payment timetable, and any substantive points that are genuinely available. Consider whether a negotiated resolution is worth exploring in parallel, particularly where the ongoing commercial relationship matters.

Common mistakes and how to avoid them

The most common mistake is under‑resourcing the defence. Adjudications move fast. A rushed, incomplete response is often worse than a focused, shorter one that identifies the strongest points clearly.

The second mistake is assuming the case is hopeless because someone internally has said the notice was “late” or “invalid.” That assessment deserves proper legal scrutiny. Many alleged defects do not survive careful analysis of the contract and the correspondence.

Third: failing to make jurisdictional reservations in writing at the outset. Miss that step, and you may inadvertently accept the adjudicator’s jurisdiction by participating, losing a potentially decisive argument in the process.

Managing cashflow risk after a smash and grab adjudication

A potential liability of £50,000 to £500,000 or more is not just a legal problem. It is a cash flow problem.

Think early about how you would fund an adverse award. Talk to your finance team or lenders before the decision lands, not after. Consider the impact on other live projects if a large payment were required at short notice. Plan how you would manage the messaging to your supply chain.

Being prepared is not conceding defeat. It is avoiding panic if the worst happens. And a credible threat of a true value adjudication, pursued in parallel with any settlement discussions, strengthens your hand considerably.

How to reduce the risk of future claims

Prevention is far cheaper than defence.

Make sure your commercial and project teams understand the payment notice regime. They need to know what a valid notice must contain and when it must be served. Robust diary systems, template notices, and clear lines of responsibility make a real difference. Training costs a fraction of what a smash and grab adjudication costs.

Periodic legal reviews of your standard form contracts and project administration practices can identify traps before they cause damage – overly complex payment provisions, inconsistencies between the contract and how your teams work on the ground. 

Are you at risk right now?

You may need immediate advice if any of the following apply:

• You have just received a notice of adjudication or a referral notice.
• Your QS or project manager has flagged that a pay less notice may have been served late or incorrectly.
• A payment certificate or payment notice was not formally issued within the contractual deadline.
• You are unsure whether a payment application you received was valid.
• A payment dispute is building, and you want to get ahead of it before it escalates.

If any of those sound familiar, do not wait. The earlier you seek advice, the more options you have. 

See how we assist with dispute resolution in construction projects.

How JLN can help

Smash and grab adjudications are fast, technical, and high‑stakes.

Paying parties are often told they have “no defence” and should simply pay up. In practice, the position is usually more nuanced than that. A careful, early assessment by experienced construction adjudication solicitors can reveal arguments that are not immediately obvious – and change the outcome.

At The Jonathan Lea Network, our construction and commercial disputes team regularly acts for employers, developers, main contractors, and subcontractors in payment notice disputes and smash and grab adjudications across England and Wales. We are used to working under tight deadlines. We can mobilise quickly – including outside normal office hours when the situation demands it.

If you have received a notice of adjudication, or you are concerned that a notice issue could lead to a smash and grab claim, we can review your position at short notice, advise you on your options, and represent you through the adjudication and any follow‑on true value proceedings or enforcement. To discuss your situation confidentially, contact us, and we will arrange a consultation tailored to the urgency of your case. 

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This article is intended for general information only, applies to the law at the time of publication, is not specific to the facts of your case and is not intended to be a replacement for legal advice. It is recommended that specific professional advice is sought before relying on any of the information given. © Jonathan Lea Limited.