Practical steps on retention recovery:
1) The first action is to check the contract, when is the retention due to be paid?
2) Are there any actions that need to be taken, such as making a formal application to a specific person.
3) Is there any specific defects which prevent payment of the retention?
4) Is there a reason why the contractor or client hasn’t paid the retention?
5) If the client hasn’t provided a reason behind the prevention of payment and the contract has been complied with in respect of retention recovery, then the retention recovery process can commence.
The retention recovery service process is based on a three stage approach. The stages are:
- Initial notice.
- Notice of intention to adjudicate.
Stage 1 Initial notice
The initial notice is a pre-adjudication notice issued to the company secretary of the withholding party. Stating that Adair has been employed to recover the retention, the basis of the retention recovery and setting a time limit for the withholding party to respond, if a response is not received Adair will commence adjudication on the client’s behalf.
There are three potential outcomes to this notice, these are:
- Pay the outstanding retention.
If the retention is paid then the process is complete. If the notice is ignored, then we move to stage two the notice of adjudication. If the release is disputed, then Adair will check the basis of the dispute and advise the client accordingly.
The dispute should be sanity and risk checked, if the dispute is not valid then Adair will advise escalating to stage two, the notice of adjudication. If the dispute is valid then Adair will advise not to pursue the retention release.
At this stage a financial health check of the paying party should be carried out, a check of a Dunn and Bradstreet (or similar report) and a check for any current litigation.
The initial notice is a form letter which will take approximately half an hour to complete.
The proposed price for stage 1 is £245, which is for the preparation of the initial notice and to sanity check and advise if the notice is disputed.
Stage 2 Notice of intention to adjudicate
The second stage is for use when the initial notice is either ignored or disputed. If the notice is ignored or disputed and the basis of the dispute is not valid, then a notice of referral is prepared. If it is possible under the contract, UK Adjudicators is proposed as the nominating body. UK Adjudicators do not charge a nomination fee.
The potential outcomes after issuing the notice to adjudicate are:
- Payment of the outstanding retention.
If the outstanding retention is paid, then the issue is closed. If the retention is disputed, then the dispute is sanity checked and the client advised to either proceed or withdraw.
The proposed price for the second stage is £700 which is based on four hours. This includes a sanity check of any dispute.
Stage 3 Adjudication
The dispute phase is started only if it is apparent that the defence raised by the paying party in the dispute is not valid. The points raised by the paying party will be checked and incorporated into the adjudication referral document.
The parameters of the adjudication should be agreed and set out with the client prior to the issuing of any referral notice. The basis of the referral may change with the paying party’s documentation issued and evolve into a new dispute. If this happens the original notice should be withdrawn and a new notice of intention issued.
The adjudication stage is proposed at £3,500 which is based on 20 hours.
If require any help relating to the retention recovery service process, please email email@example.com in the Dispute Resolution team or contact us via firstname.lastname@example.org