For the first time the right to suspend works on site when payment is withheld is enshrined in legislation under s.5(1) of the Construction Contracts Act 2013.
Subcontractors and construction need to serve Notice if the suspension is to be deemed valid. The Notice has to set out the grounds for the suspension. The Notice can only be served one day after the payment is due. The Notice has to give 7 days notice of the suspension.
However works cannot be suspended if the amount is paid or if Notice of Adjudication has been served. Basically you can't have your cake and eat it. Either suspend works or refer the claim to Adjudication but not both.
Enshrining suspension of works in legislation is all very good but practically suspending work on site is no picnic. Firstly there is reputation damage if you suspend works. Then you still have to pay your crew for the suspended days for doing nothing. Finally subcontractors might find themselves replaced on site.
Under the Act, if you unjustifiably suspend work then you could be liable to pay the employer/contractor for any loss suffered.
Secondly, the right of suspension for non-payment is now put on a statutory footing. The Act will allow a party, who has not been paid by the day on which payment is due, to suspend work provided a written notice has been delivered to the paying party at least 7 days before the proposed suspension is to begin. The Act also ensures that time will be added to the contract programme to take account of the suspension, both for the suspending party, but also for other contractors involved in the project whose works may be affected by the suspension. The right to suspend will end immediately on payment being made, or when a notice of adjudication is delivered.