Dispute Resolution for Tradespeople: CTSI-Approved ADR Schemes, Construction Act Adjudication and Small Claims vs County Court

Quick Answer: UK tradespeople have four main dispute resolution options: negotiation, Alternative Dispute Resolution (ADR) through a CTSI-approved scheme, statutory adjudication under the Housing Grants, Construction and Regeneration Act 1996 (as amended), and court proceedings (Small Claims Track up to £10,000 in England/Wales). ADR is mandatory for traders to offer under the ADR Regulations 2015 when a consumer complaint cannot be resolved within 8 weeks.

Summary

Unpaid invoices and disputed work are among the most stressful experiences in the trades. Most tradespeople try to avoid conflict, which means disputes often drag on for months without resolution — damaging cash flow and taking up time that should be spent on jobs. Knowing the correct process, and presenting it clearly to the customer at the right moment, significantly changes the dynamic.

The legal framework divides along a critical line: consumer contracts (where the customer is a private individual) and business-to-business contracts (commercial clients). Consumer contracts carry additional protections for the customer under the Consumer Rights Act 2015, but also give the tradesperson access to CTSI-approved ADR schemes and the ADR Regulations 2015. B2B disputes over construction contracts — typically contracts worth over £10,000 and in writing — can use statutory adjudication, which is a fast-track legal process unique to the construction industry.

Most disputes involving tradespeople are for sums under £10,000. These are handled in the Small Claims Track of the County Court in England and Wales (Sheriff Court in Scotland, Small Claims Court in Northern Ireland). The process is designed for non-lawyers and is relatively inexpensive, but it does require the tradesperson to understand the basics of civil procedure.

Key Facts

Quick Reference Table

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Method Applicable To Cost Timeline Binding?
Negotiation / mediation Consumer + B2B Low/nil Flexible Only if agreed
CTSI ADR scheme Consumer contracts Usually free to consumer; trader may pay 45–90 days Yes (if scheme rules)
TrustMark / trade scheme mediation Registered traders Scheme fees 30–60 days Varies by scheme
Statutory adjudication B2B construction contracts £2,000–£15,000+ costs 28 days Yes (temporarily binding)
Small Claims Track Consumer + B2B (under £10k) £35–£410 issue fee 3–12 months Yes (court order)
Fast Track / Multi-Track B2B (over £10k) £200–£1,000+ fees 12–24 months Yes
Magistrates / Sheriff Court Scotland under £5k Low 3–6 months Yes

Detailed Guidance

Step 1 — Negotiation and Paper Trail

Before any formal process, every dispute must be approached with a documented negotiation attempt. This is not just good practice — courts and ADR schemes will examine whether the parties made reasonable efforts to resolve the matter before escalating.

Document every step:

CTSI-Approved ADR Schemes

Under the ADR Regulations 2015 (SI 2015/542), traders must tell consumers about an approved ADR scheme if a complaint remains unresolved after 8 weeks. This does not mean the trader must participate — only that they must provide the information.

However: if your trade association membership, TrustMark registration, or consumer code of conduct commits you to a specific scheme, participation may be mandatory. Check the small print of your scheme registration.

Key CTSI-approved schemes for tradespeople:

ADR outcomes can include:

Statutory Adjudication Under the Construction Act 1996

Adjudication is a fast-track dispute resolution mechanism that applies to "construction contracts" under the Housing Grants, Construction and Regeneration Act 1996. The 2009 amendments (via the Local Democracy, Economic Development and Construction Act — LDEDCA) significantly extended its reach.

Who can use adjudication:

Who cannot use it (as the referring party) under the 1996 Act:

The adjudication process:

Dispute crystallises
        |
        v
Issue Notice of Adjudication to other party
(describes dispute; nominates adjudicator or requests nomination)
        |
        v
Adjudicator Nominating Body (ANB) nominates if needed
(RICS, TeCSA, CIArb — typically within 5 days)
        |
        v
Referral Notice served (within 7 days of Notice)
(full claim with supporting documents)
        |
        v
Respondent's Response (usually 14 days)
        |
        v
Adjudicator's Decision (28 days from Referral, or extended)
        |
        v
Complied with voluntarily OR enforced via County Court
(courts enforce in >95% of cases without re-hearing merits)

Pay Less Notice rules (critical for tradespeople issuing invoices):

Small Claims Track — Step by Step

For disputes up to £10,000 (England and Wales), the Small Claims Track is the most practical route for tradespeople pursuing unpaid invoices from consumers.

Before issuing:

  1. Send a Letter Before Claim (LBC) — minimum 14 days' notice; state the amount claimed, the basis, and that court action will follow
  2. Keep a copy of the LBC with proof of delivery (recorded post or email with read receipt)
  3. Continue to keep all evidence: contract, quotes, signed variation orders, photos of completed work, invoices, payment records, correspondence

Issuing a claim:

Potential outcomes:

After judgment: Winning a judgment is not the same as receiving payment. Enforcement options include:

Late Payment — B2B Contracts

For commercial clients (limited companies, sole traders, other businesses), the Late Payment of Commercial Debts (Interest) Act 1998 applies automatically:

Calculate and state the late payment interest in any LBC — it increases the commercial pressure on the debtor and is directly recoverable.

Frequently Asked Questions

Do I have to go to ADR before going to court?

No — there is no legal requirement to exhaust ADR before issuing court proceedings in the UK. However, courts expect parties to have attempted resolution in good faith. Under the Civil Procedure Rules Pre-Action Protocol, unreasonable refusal of ADR can result in cost penalties even for the winning party. In practice, if you have made reasonable attempts to resolve the dispute and the customer has refused, you are well-positioned for court.

Can I charge a customer interest on late payment if they are a consumer (not a business)?

The Late Payment of Commercial Debts Act only applies to B2B contracts. For consumer contracts, you can charge interest if it was expressly included in your contract terms — but the rate must be reasonable and prominently disclosed. A contractual interest clause at 2–4% above base rate is generally considered reasonable; excessive interest rates could be challenged as an unfair contract term under the Consumer Rights Act 2015.

What happens if I lose an adjudication?

Adjudication decisions are temporarily binding — you must comply immediately. However, either party can subsequently have the dispute re-opened in court or arbitration, where the full merits are examined. In practice, the majority of adjudication decisions are accepted as final because the cost and disruption of re-litigation outweighs the benefit. If you lose, pay — and then decide whether to pursue further via arbitration or litigation.

My customer threatens a credit card chargeback. What can I do?

A chargeback reverses a card payment and is handled by the card issuer. You will receive a notification from your payment provider and have a limited window (typically 7–14 days) to provide evidence that the work was completed as agreed. Submit your contract, photos, signed completion documentation, and any correspondence showing the customer approved the work. Strong evidence substantially increases the chance of the chargeback being declined. Always get sign-off on completed work in writing.

Is WhatsApp evidence admissible in a Small Claims case?

Yes. Digital communications including WhatsApp messages, texts, and emails are admissible evidence in UK civil proceedings. Print screenshots with timestamps visible. Courts regularly accept such evidence in Small Claims cases. Keep messages — do not delete them when a dispute arises.

Regulations & Standards