The Corporate Insolvency and Governance Act 2020 (the Act) received royal assent on 25 June 2020 and is now in force, bringing with it significant changes to the insolvency world and the operation of the construction industry.

The current COVID-19 pandemic has placed many companies registered in England and Wales into a position where they are now either balance sheet or cash flow insolvency or both. The loss of these companies to the economy would be catastrophic and, as a result, the UK Government started the Bill’s passage through parliament on 3 June 2020.

The compulsory liquidation of Carillion is likely to have a wide ranging effect on the construction industry in the UK. The impact may well be felt by other contractors, sub-contractors and suppliers as well as engaged professionals such as architects, engineers and project managers. The insolvency may give rise to calls on bonds or guarantees and affect insurance arrangements.

In this bulletin we summarise what has happened and offer immediate advice.