If a building contractor becomes insolvent, but the build is covered by an NHBC Buildmark warranty providing insolvency cover, when does time start to run for the insured to start proceedings against an insurer who fails to pay a claim?

The Technology and Construction Court (TCC) has recently considered this question in the context of an application for summary judgment made by the NHBC, in Peabody Trust v National House-Building Council [2024].

The Technology and Construction Court recently delivered helpful judicial guidance on when an insured’s cause of action under an the NHBC ‘Buildmark Choice’ policy, providing cover for contractor insolvency before practical completion arises.

Following the important decision in Martlet Homes Ltd v Mulalley & Co Ltd [2022] (see our summary here), LDC (Portfolio One) Ltd v George Downing Construction

The Court of Appeal has confirmed that although insolvent parties may refer disputes to adjudication, they will have difficulty enforcing adjudication decisions in all but exceptional circumstances

Introduction

The UK Supreme Court has today handed down a significant and highly anticipated decision on the interpretation of liquidated damages clauses.

INSURANCE AND REINSURANCE DISPUTES

2020 REVIEW

The contents of this publication are for reference purposes only. They do not constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking any action based on this publication.

INSURANCE AND REINSURANCE DISPUTES 2020 REVIEW

Contents

Preface

A recently published decision from the Technology and Construction Court, which examined the widely debated issue of whether companies in liquidation can adjudicate, could have increasing significance over the coming months in light of the Covid-19 pandemic.

We have previously reported on the developing area of adjudication by insolvent companies, now the subject of another key judgment. In Balfour Beatty Civil Engineering Limited and Astec Projects Limited (in liquidation) [2020] the Technology and Construction Court (TCC) has provided a further clear example of the type of strict conditions that will need to be satisfied to enable such adjudications to proceed.

In light of the fast moving pace of developments on COVID-19, and the varying degrees to which information is available to our clients in the projects & construction sector in relation to its impact on their operations, we will be circulating a regular update that addresses the following:

It is an unfortunate reality that the number of insolvencies in the construction sector seems certain to rise in coming months as the economic impact of COVID-19 takes effect. In this context, the recent Supreme Court decision in Bresco Electrical Services Ltd (In Liquidation) v Michael J Lonsdale (Electrical) Ltd [2020] UKSC 25 is particularly relevant.

This case concerned important questions regarding the compatibility of two statutory regimes: