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

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.

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.

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

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:

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".

This briefing is the second in a series of 3 briefings about the Third Parties (Rights Against Insurers) Act 2010 which we will be publishing on the run-up to it coming into force on 1 August 2016.

Click here if you would like to read the first briefing in the series.

The pros and cons every claims professional needs to know

This briefing is the first in a series of 3 briefings about the Third Parties (Rights Against Insurers) Act 2010 which we will be publishing over the next fortnight.

The pros and cons every claims professional needs to know – part 1

Introduction

In the first 3 months of this year, company insolvencies increased for the first time since 2014. In April, UK manufacturing activity contracted for the first time in 3 years.1 A range of explanations has been offered including

weaker domestic demand, low oil prices hitting production and uncertainty created by the EU referendum. It the circumstances, it seems timely to look at one of the remedies that can be available to manufacturers and suppliers in the event of a customer failing to pay for goods.