An employer's failure to serve a payless notice within a short period challenging the payee's notice can have draconian consequences, as it will usually mean that the employer has to pay. However, the judge commented that if contractors want to see the benefit of these provisions, they should be obliged, as a quid pro quo, to set out their interim payment claims with proper clarity. If an employer is to be put at risk that a failure to serve a payless notice at the appropriate time during the payment period will make him liable in full for the amount claimed, he must be given reasonable notice that the payment period has been triggered in the first place.
suggestion that the documents of 13 February gave rise to an undisputed
entitlement to over £1.5 million defied common sense, and would be contrary to
the purpose of the notice provisions in the 1996 Act. It was simply not
permissible for a contractor to make a claim for £1.5 million on interim
application 15 on 30 January, to have it knocked back through the payless notice
mechanism; to update that same claim 8
days later by adding one small variation worth £6,000; and then, because of that update alone, miraculously to become
entitled to the £1.5 million, despite the fact that the claim for the vast bulk
of that sum had already been the subject of the valid payless notice.
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