Construction & engineering debt recovery

Construction has a payment culture that would be considered genuinely alarming in any other industry. A subcontractor can complete six months of work, pass every inspection, receive formal sign-off on each milestone, and still wait another year for full payment. This isn't a bug in the system — it's a feature. The construction industry has, over several decades, developed an elaborate architecture of delayed payment that it has somehow convinced itself is normal. Retention clauses, pay-when-paid provisions, final account negotiations that drag on longer than the actual build — these aren't exceptions. They're standard operating procedure.

The numbers are extraordinary. A structural steelwork subcontractor completes £1.2 million of work on a commercial development. Five percent is held as retention: £60,000, locked away for 12 months pending the defects liability period. The period expires. The building is occupied. Tenants are paying rent. The main contractor's commercial team, asked to release the retention, suddenly discovers "ongoing snagging issues" that nobody mentioned during the previous 12 months of apparently satisfactory occupation. The retention remains unreleased.

The subcontractor, who financed the work, the materials, and the labour from their own cash flow, continues to wait. Variation claims are the construction industry's most popular payment avoidance mechanism. Here's how it works: a client requests additional work. The site manager agrees. The work is carried out. The cost is recorded. Then, when the invoice arrives, the client's quantity surveyor discovers that no formal variation order was issued. The work is complete, visible, and physically incorporated into the building, but the paperwork doesn't exist in precisely the format the contract requires.

International construction adds jurisdictional complexity to an already complicated payment landscape. A German subcontractor working on a Dutch project under an English-law FIDIC contract with a French main contractor — four jurisdictions, each with different construction payment legislation, retention rules, and adjudication procedures. Determining which law applies, which courts have jurisdiction, and what remedies are available requires expertise that most construction companies simply don't have in-house.

The good news — and there is good news — is that many jurisdictions have recognised the construction industry's payment problem and legislated solutions. The UK's Construction Act introduced statutory adjudication: a binding decision within 28 days. Germany's BGB §650 provides specific payment protections for construction work. Several EU countries have implemented late payment directives with teeth. These instruments exist precisely because legislators looked at construction payment practices and concluded that the industry was incapable of regulating itself.

INTERCOL's construction recovery leverages these statutory protections alongside commercial pressure. We understand JCT, FIDIC, NEC, and local-form contracts. We know the difference between a genuine defect claim and a retention release stalling tactic. And we know that a well-constructed demand — one that references the correct contract clause, cites the applicable legislation, and makes clear the consequences of continued non-payment — resolves more construction disputes than a year of "chasing" phone calls from your accounts team.