Housebuilders face wave of legal battles over withheld cash

The dispute specialist that successfully sued Barratt for wrongfully deducting cash from a subcontractor has written to 5,000 specialists offering to represent them in similar cases. The move comes as housebuilders continue to tighten the screw on their supply chains.

Amid a wave of redundancies at housebuilders and demands that specialists lower agreed contract prices, it has emerged that Bovis Homes is demanding that subcontractors give up their retentions, rather than Bovis taking deductions off regular payments, in the latest attempt to cut costs.

Meanwhile, Persimmon is insisting that subcontractors cut their prices on agreed contracts by 15% or face having them retendered.

Peter English, head of PJ English Associates, the law firm that made the offer, said: “If a specialist has a contract in place, it does not have to accept these reductions. We will litigate very quickly because it is a clear breach of contract.

“If a housebuilder verbally accepts a subcontractor’s price and it starts work on site, that is a contract and any attempt to reduce the price and retender is illegal.”

Earlier this year PJ English won a legal test case against Barratt on the issue on behalf of a glazing contractor. The adjudicator ruled that Barratt had “improperly withheld” more than £19,330.