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ARTICLE · 30 JULY 2020

Adjudication v Insolvency Set-Off

Charles Russell Speechlys LLP
Charles Russell Speechlys LLP
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Charles Russell Speechlys LLP

Charles Russell Speechlys LLP

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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.

United KingdomInsolvency/Bankruptcy/Re-Structuring
Steven Carey
Steven Carey
Andrew Keeley
Andrew Keeley
Will Leney
Will Leney

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:

  • the adjudication of construction disputes pursuant to section 108 of the Housing Grants, Construction and Regeneration Act 1996, (Construction Act); and
  • the operation insolvency set-off pursuant to Rule 14.24 and 14.25 of the Insolvency (England & Wales) Rules 2016 (Insolvency Rules).

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