The fallout from failed tax saving arrangements using Employee Benefit Trusts (“EBTs”) continues. In Hunt, directors who in reliance on tax advice from a firm of accountants, arranged for a company to use an EBT, were found not in breach of duty.  The decision whilst of comfort to directors, increases the likelihood of recovery actions following failed tax saving schemes shifting back on the accountancy firm tax advisors. 

Background

The threat of contractor insolvency could be a driver for change in the way construction firms operate.

As inflation rises, the chance of contractor insolvency increases. Rising materials prices and increasing labour costs, combined with supply chain issues, mean that already thin margins become even slighter, increasing the risk that a contractor might cease trading. A focus on lowest price tenders is also exacerbating the situation.

Good afternoon.

Following are this week’s summaries of the Court of Appeal for Ontario for the week of July 11, 2022. There were many interesting cases this week.

In Humphrey v. Mene Inc., the Court allowed an appeal in part and reduced damages for wrongful dismissal from twelve months to seven as a result of the plaintiff’s failure to reasonably mitigate by accepting another comparable position seven months after she had been dismissed. The awards of aggravated and punitive damages were upheld.

Good afternoon.

Please find our summaries of the civil decision of the Court of Appeal for Ontario for the week of July 4, 2022.

What effect will government proposals have on insurers, policyholders and other stakeholders?

The challenges faced by the construction industry are continuing to grow and insiders wonder when the storm is going to hit. For some, like Probuild, it already has. Rising inflation and the increasing cost of debt, labour shortages, supply chain delays and escalating cost of freight and materials are putting the industry under enormous pressure. Simultaneously Governments have invested heavily in building and construction to maintain growth in the economy.

The liquidators of a company successfully applied to join the insurers of the directors of an insolvent company to court proceedings.

In Issue

As part of a claim against a company’s directors for insolvent trading, it became apparent that should the directors be found liable, they would be unable to pay the damages sought, and would become bankrupt. The liquidator brought an interlocutory application to join the company’s insurers that provided management liability cover in the relevant period, pursuant to of s117 of the Bankruptcy Act 1966 (Cth).

It has been a difficult start to the year for many D&Os. Data from the Insolvency Service released earlier this month confirmed that the number of companies entering a voluntary insolvency process has more than doubled in the first quarter of 2022 (a 112% increase) compared to the same period in 2021. This is the highest number of company voluntary liquidations since records began in 1960.

Good afternoon.

These are our summaries of the civil decisions of the Court of Appeal for Ontario for the week of April 25, 2022.

In May 2021, the UK Government published a Consultation which set out its proposals for targeted (but significant) amendments to certain aspects of the existing UK insolvency arrangements for insurers.