In the winter of 2015, the Indian Legislature sought to tackle the persistent problem of bad debts affecting Indian financial institutions and trade creditors by enacting the Insolvency and Bankruptcy Code, 2016 (“Code”), which was finally notified in May 2016. The key purpose of the enactment was to consolidate and amend the laws relating to reorganization and insolvency resolution of corporate persons, partnership firms and individuals in a time bound manner for maximization of value of assets of such persons / entities. 

It's been yet another busy year for construction, with BIM developments, greater use of modern methods of construction, looming Brexit, increased insolvencies, building safety progress, a brighter spotlight on diversity...    In this article, we take a look at some of the key legal changes and industry developments for the construction industry, and highlight a few things to expect in 2020.

Legal Changes 

Fewer disputes

Philip Stephen Wallace (as liquidator of Carna Meats (UK) Limited) –and- George Wallace [2019] EWHC 2503 (Ch)

The High Court has recently revisited the question of whether section 236 of the Insolvency Act 1986 has extraterritorial effect and considered the differing views expressed in previous cases.

As reported in Building earlier this year (4 February) the construction industry experienced the highest number of insolvencies of any UK industry in 2018. Last year saw 2,954 firms become insolvent, an increase of 12% on the previous year and more than in any year since 2013. It is well known that the construction industry is particularly prone to insolvencies and there has been a great deal written about why that is the case and what can be done about it.

According to the recent case of Sell Your Car With Us Ltd v Sareen [2019] – yes, they are.

Historically the courts have looked dimly on the use of insolvency proceedings as a method of debt collection. For this reason, where an individual or company appears to have the means to pay a debt but apparently refuses to do so, the courts have implied that the only proper legal recourse is through litigation. In this case, the judge explained why she considers this submission to have been taken too far.

Background

In the past five years, insolvency rates in the construction industry have increased more quickly than in other industries across the UK. This article considers the common causes of construction insolvency and how to protect your position if insolvency occurs.

Recent trends

Insolvency may seem an unlikely scenario for your pension plan's employer today and for the foreseeable future but the Pension Protection Fund (PPF) has recently published guidance recommending that defined benefit pension plan trustees should make contingency plans for employer insolvency "as with any sensible business continuity or disaster recovery planning".

Pantiles Investments Limited & Anor v Winckler [2019] EWHC 1298 (Ch)

Background

The Liquidator of the Pantiles Investments Limited (Company) brought a claim (among others) for fraudulent trading against its former director, Ms Winckler. The claim related to a property transaction involving Ms Winkler, an associate (Mr Goldbart) and the Company. In summary, the transaction was as follows:

Last year the Technology and Construction Court (TCC) held that a company in liquidation cannot refer a dispute to adjudication in circumstances where there are claims by a company in liquidation and cross claims by the other party1.

It looks like 2019 won't be the new start many had hoped for. With large high street retailers already teetering on the edge after a disappointing Christmas and the government still up in arms about the B word, the country's commercial real estate market is looking more and more uncertain.