Contractors Debts Act 1997

In the Construction Industry there are often several levels of contracting.

An example; you are a tradesman, maybe a plumber, (the ‘subcontractor’). You are working for a builder (the contractor’). He is working for a client such as a government department or a larger retailer (‘the Principal’). Your client the builder isn’t paying your invoices. Under the Security Of Payment Act we can commence a process that enables us to leapfrog the builder and press the ‘Principal’ for payment of your invoices.

This is extremely important when your client the builder may be in financial difficulty.

The Contractors Debts Act 1997 thick was brought in to help subcontractors obtain payment for construction work when they find themselves in exactly this situation.

When a judgement is obtained against a contractor by a subcontractor for work done ultimately for a principal contractor the subcontractor can get the liability of the debt re-assigned to the principal contractor.

Under the Contractors Debts Act this is done by obtaining a debt certificate through a court of competent jurisdiction and serving this on the principal contractor together with a Notice Of Claim and a garnishee order.

If the principal contractor owes any money to the contractor they are in contempt of court if they don’t pay it to the subcontractor.

Call us now to see if this may be possible in your situation.

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