Construction update: Hold on to your money

Many subcontractors and tradespeople will be very relieved with a Supreme Court ruling yesterday that will make it easier for them to keep their money in the insolvency of a head contractor.

The construction industry was concerned about a Court of Appeal ruling from 2013, which allowed money to be "clawed back" from subcontractors for up to two years after the payment was made. The earlier ruling meant that a subcontractor could only hold onto its money where it was paid in advance for the work – very rare in the construction industry. The result was that any business providing goods or services on account was always on risk that money it had received could be clawed back for up to two years.