Having acted for employers on four projects in the past year where the main contractors have become insolvent, here are my 15 top actions for employers to consider when faced with main contractor insolvency.
In July 2020, when COVID-19 still seemed like a relatively new topic, I published an article that set out in detail the reforms brought in by the Government – partly to try to tackle the impact of COVID-19 – in the Corporate Insolvency and Governance 2020 (“CIGA”).
[2020] UKSC 25
Many things have changed during the Covid-19 lockdown. Additional time with family and time to catch up with things I wouldn’t otherwise have had time to do are two of the main benefits I have enjoyed. Being a rather boring lawyer, one guilty pleasure I have indulged in is watching transmissions of Supreme Court hearings.
It is perhaps an inevitable result of the current global pandemic that employers, main contractors and subcontractors alike will be dusting down the guarantees they have been given, or provided to others, in respect of their ongoing projects. For those who have been given them they need to establish what security those guarantees actually provide and, perhaps as importantly, how quickly they will pay out.
Retentions have been a common feature in the construction industry for over 100 years, yet over the past two years there has been a growing shift in the construction industry’s views on retentions and whether reform of retention as we know it is required. Adele Parsons discusses these recent developments further.
[2019] EWHC 2651 (TCC)
Before ICC Judge Barber In the Insolvency and Companies List
The facts
[2019] EWCA Civ 230
This was an appeal by the supplier of a software system against a TCC judgment dismissing its claim and ordering it to pay substantial damages on the counterclaim. The main issue of principle which arose was how to apply a clause imposing liquidated damages for delay in circumstances where the contractor or supplier never achieves completion.
The Court of Appeal has recently considered two appeals in which the interplay between the construction adjudication process and the insolvency regime was considered; Bresco Electrical Services Limited (in liquidation) v Michael J Lonsdale (Electrical) Limited (see my blog of 28 September 2018 on the TCC decision) and Cannon Corporate Limited v Primus Build Limited.