Expert Witness Journal Issue 68 August 2026 - Flipbook - Page 59
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market) or bespoke bonds – to the extent that
the insurance market will cover the supply
chain. The positive of bonds would be that the
employer/contractor will be forced to pay the
price of the security, but the negative for them
will be they don’t have access to the cash as part
of their working capital.
More disputes
There might be more tension on sites where
contractors and sub-contractors suspect their
works are being undervalued, and this could
lead to a rise in adjudications where contractors
or sub-contractors turn to an adjudicator to
determine the true value of the works completed.
Errors in the issuing of payment notices
unlawfully deducting a retention may also lead
to more adjudications. It is not currently clear
how adjudicators will address these issues and
whether such unlawful deductions will result
in payment/pay less notices being invalidated
in their entirety (potentially resulting in more
‘smash and grab’ adjudications). There would
need to be clear rules on the recovery of
unlawfully deducted sums to avoid complex and
costly disputes.
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Employers and contractors may be more
stringent in their requirements to achieve
practical completion and reluctant to agree to
snagging schedules for minor items.
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Expenditure of time and money
Contractors and sub-contractors may still spend
signi昀椀cant amounts of time and money chasing
unlawful retention payments or payments
made to circumvent the retention ban. If this
is the case, and an alternative is pursuing an
adjudication (which can be expensive) then
to what extent does this achieve the desired
outcome of reducing the time and money spent
chasing retention money?
Failure to address the root cause
A ban removes the legal entitlement to withhold
retention but does not address the reason why
employers and contractors feel the need for one.
As a result, employers and contractors may try
to 昀椀nd ways to legitimately withhold a portion
of money from the payments they make as a
form of alternative security. Alternatively, there
may be an increased need for performance
bonds (perhaps even on demand bonds which
are currently unusual in the UK construction
EXPERT WITNESS JOURNAL
Changes to approach to practical completion
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Alternative payments
Employers and contractors may try to 昀椀nd
alternative and creative solutions to replace
retentions. We expect an increase in the use of
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AUGUST 2026
