Recovering an overpayment through true value adjudication

Relevant background

Our client had been managing refurbishment and extension works at an manufacturing facility. An initial appointment under a pre-construction services agreement had expanded to include substantial physical works, while the intended main contract was never executed. The signed agreement and its pricing schedule therefore became central to assessing the account.

Following a notified sum adjudication, the client complied with the decision, bringing cumulative payments against the contractor’s application to approximately £1.5m. That decision concerned the payment due under the notice process; the true value of the works remained unresolved. We were appointed to assess the amount properly due and represent the client in a separate adjudication seeking repayment of the overpaid balance.

Our approach

We began by mapping the contractor’s application back to the contract pricing schedule. This required us to distinguish the initial scope, the further works subsequently undertaken and the items claimed as additional work. We reconciled the underlying contract amounts and brought omitted contract items into the assessment, establishing a consistent basis for comparing the claimed value with our valuation.

For each disputed item, we tested the claimed percentage of completion against photographs, progress and snagging records, and evidence from the client’s project team. For steelwork, cladding and finishes, this meant identifying the elements still outstanding and relating them to the agreed item price. Our assessment addressed the contractual value of the work properly completed at the application date. We also tested the contractor’s cost to complete estimates against that contractual valuation basis.

The additional work claims required a separate review of scope and entitlement. We traced the alleged changes through instructions, correspondence and revised design information, checking what had changed from the agreed requirements and whether the claimed work was already included elsewhere. Working with the client’s team, we assembled the records supporting its position and identified where the parties’ accounts of events differed.

One substantial concrete cutting claim involved specialist subcontractor invoices. We examined those costs against the original floor removal scope, quantity and depth assumptions, contract pricing and allowances already included in the application. The exercise was to establish which activities were additional and how they should be valued under the agreement, including testing potential overlap between the claimed additions and the original priced works.

We organised the valuation and supporting evidence around more than 30 disputed items and subitems. Each had a consistent reference linking the contractor’s claim, our assessment, the explanation of the difference and the relevant records. This gave the adjudicator a route from the disputed amount to the contractual basis and evidence for each item.

As party representative, we prepared and served the notice of adjudication, arranged the nomination process and developed the referral and its supporting documents. We then managed the subsequent written exchanges, including the reply and surrejoinder, addressing the contractor’s factual evidence, revised valuations and contractual arguments. The adjudication ran for approximately two months. Throughout, we kept the case focused on the true value of the specified payment application, with the valuation, project records and witness evidence presented together.

The outcome

The adjudicator made an assessment of the disputed items and determined a lower value than had been paid. The decision ordered repayment of around £200,000 plus applicable VAT and interest. The client received that repayment, recovering a material overpayment following compliance with the earlier notified sum decision.