Late Payments in the Construction Industry: Comparative Law and Policy Approach in the UAE

Abstract

In the construction industry, payment practices vary considerably across the globe, often influenced by legal frameworks, cultural norms, and industry maturity. However, in general, late payments represent a significant challenge, particularly affecting subcontractors and suppliers, especially SMEs. Pay-when-paid clauses can transfer payment risk down the supply chain. Dispute resolution can be costly and time-consuming. Thus, in comparative law, various regulatory approaches have been adopted to address the issue. The UAE has seen a rapid growth in its construction industry over the past few decades, with numerous high-rise buildings, infrastructure projects, and mega developments transforming the landscape of the country. Such growth has given rise to the need for effective rules and policy tools to ensure that all parties involved in construction projects are protected and paid in a timely manner.