Making a payment withholding request

What is a payment withholding request? (Section 26A)

A payment withholding request is when a claimant asks a principal contractor to keep money to cover a claim that is or will be payable by the principal contractor to the respondent.

Who can serve a payment withholding request?

Only a claimant who has made an adjudication application can serve a payment withholding request.

How do I know if I am a principal contractor?

The principal contractor is the person who engaged the respondent to do work, which the respondent then subcontracted to the claimant (can include the head contractor).

What should I do if I am a principal contractor and I receive a payment withholding request? (Section 26B)

You need to make sure you act on any payment withholding requests that you receive. This means that you must keep unpaid money to the value of the amount claimed until:

  • the adjudication application is withdrawn;
  • the respondent pays the claim;
  • the claimant serves a notice of claim on the principal contractor under the Contractors Debts Act 1997; or
  • 20 business days after a copy of the adjudication determination is served on the principal contractor by the claimant.

If you do not owe any money to the respondent, you’re not required to keep the amount claimed in the payment withholding request. You must notify the claimant of that within 10 business days of receiving the request. There are penalties for principal contractors if they do not comply with these requirements.

What should I do if I am a respondent to an adjudication application? (Section 26E)

If you’re a respondent, you may be required to provide information about the principal contractor to help the claimant serve a payment withholding request. There are penalties for respondents if they fail to provide this information when requested by an adjudicator.

How should claimants issue a payment withholding request?

If you want to serve a payment withholding request on a principal contractor, you should:

  • have applied for adjudication
  • complete the payment withholding request form and a statutory declaration, confirming that you genuinely believe that the amount of money claimed is owed by the respondent
  • send these forms and a copy of the adjudication application to the principal contractor.

Once the adjudicator's decision has been made, you’re also responsible for providing a copy of the decision to the principal contractor within five business day. If you withdraw your adjudication application you must also let the principal contractor know within five business days. There are penalties for claimants if they make a false statutory declaration, or fail to notify the principal contractor of the adjudication determination or of the withdrawal of an adjudication application.

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