For the past 30 years, subcontractors have enjoyed the benefits provided for under the Subcontractor Charges Act 1974. Under this piece of legislation, a subcontractor can create a statutory charge over monies payable to his or her contractor or superior contractor, and thereby secure the payment of monies owed by that person to the subcontractor, without having previously obtained a court judgment for the alleged debt.

The Act introduces an alternative statutory remedy which subcontractors may opt to employ. However, there is nothing in the Act preventing a subcontractor from utilising the Subcontractor Charges Act 1974. Therefore, subcontractors are perfectly entitled to rely on the Subcontractors Charges Act 1974 as they always have done.

In essence these two statutory instruments cater for the needs of subcontractors in vastly different ways. The Subcontractor Charges Act 1974 facilitates a process whereby monies are frozen pending final contractual resolution of a payment dispute through the courts, which in many instances can be a lengthy and costly exercise. The Act provides subcontractors with a very different alternative, namely the rapid interim resolution of a payment dispute at a reasonable cost.

The Act however, requires subcontractors to choose between lodging either a notice of claim of charge under the Subcontractor Charges Act 1974 or an adjudication application in relation to a payment dispute.

If a subcontractor could rely on both these legislative initiatives at the same time in relation to the same or any portion of construction work or related goods or services, it would be possible for a subcontractor to prevent the flow of monies from the principal to the contractor (by notice of claim of subcontractors' charge), but at the same time the builder could be obliged to comply with an adjudication decision to pay the subcontractor an amount of money. In effect the contractor would be "hit" twice for the same work.

At the end of an adjudication process, if not satisfied, a subcontractor can lodge a notice of claim of a subcontractors' charge and secure any outstanding monies, or else reactivate the adjudication process at the time of the next progress payment. These are alternative methods of approach.

An adjudication decision has the status of a competent court of jurisdiction, which if necessary can result in a judgment debt being issued for the amount in question. A judgment debt provides grounds for a subcontractor, successful in obtaining an adjudication decision in their favour, to commence bankruptcy proceedings against a defaulting individual contractor or wind up proceedings against a defaulting corporate contractor.

A "rogue" subcontractor, of which thankfully there are very few, who is not interested in being paid for work done but absolutely committed to destroying a contractor by forcing them into some form of insolvency may be attracted to attempt to achieve such an outcome by essentially misusing these legislative initiatives.