While I am a supporter of the Minimum Financial Requirements (MFR) for contractor licensing, I have also previously pointed out their limitations.
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.
In accordance with the resolution adopted by the seven-judge panel of the Supreme Court dated 20 November 2019, case file no. III CZP 3/19, it is not admissible to stipulate liquidated damages in the case of rescinding an agreement due to the failure to perform an obligation of a pecuniary nature.
There have been debates for years about the pros and cons of owners withholding retainage (usually 5% or 10%, depending on each state’s retainage laws or local “industry standard”) from prime contractors. Typically, the primes will, in turn, withhold retainage from all subcontractors. However, in these crazy times, when the future of private and public projects is unknown and profit margins are in question, it might be a good time to revisit this issue.
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.
However, for this to happen it will require the licensing regime to embrace new thinking.
For several years I have been advocating for unique thinking to apply in respect of how the licensing regime should address situations where contractors are experiencing financial distress or are insolvent.
There is no bigger fan of adjudication than me. While not perfect, I nevertheless believe that adjudication has changed the construction industry for the better since its inception in 2004.
The impact of the COVID-19 crisis and the health-related measures implemented by the government to contain the spread of this deadly virus will unfortunately result in the economy going into recession.
In an article in the Financial Review, the results of a survey of economists revealed that even taking into account all the government’s stimulus and job-saving measures, the Australian economy will be in recession until June 2021.
Seyfarth Synopsis: In acquiring a company in bankruptcy, there is often a tendency to think this guarantees the purchaser will be “free and clear” of any liability (including so-called “successor liability”). This is not necessarily so with wage and hour liability, particularly if the purchaser merely continues to operate virtually the same business that was acquired.
On May 21, 2020, the Québec Court of Appeal (QCA) released its reasons in Arrangement relatif à 9323-7055 Québec inc. (Aquadis International Inc.)[1](the Aquadis case).