BCSA to finance 'pay when certified' test case

by James Atkinson



The British Constructional Steelwork Association (BCSA) is to help finance a test case on the issue of 'pay when certified' clauses.

The association wants to establish whether it is legal under the Construction Act for main contractors to insert contract clauses saying they will pay subcontractors only when payment on the main contract has been certified.

Marian Rich, director of legal and contractual affairs at the BCSA, said: "Pay when paid has largely been outlawed, but we sometimes find main contractors are putting in clauses saying we will only pay you when our work has been certified.

"Payment to a subcontractor is therefore dependant on something happening in another contract. The subcontractor has no say or influence over that certification. Section 110 of the Act says that there has to be an adequate payment mechanism.

"What we want to find out is, if the subcontractor has no influence over the main contractor's certification, is that an adequate mechanism for determining what payments become due and when?"

Rich said the pay when certified issue applied to both interim and final payments and added: "The BCSA wants to support a case going forward, but it has to be the right case and we are not sure yet how we will do it."

Rudi Klein, chief executive of the Constructors Liaison Group, added: "It would be useful to get a case in court on just this issue as it would resolve a lot of other clauses designed to get round the Act such as 'pay when certified for retentions'."