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ARTICLE · 26 JULY 2019

Mitigating Insolvency Effects In The Supply Chain

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Insolvency in the construction industry is once again in the headlines.

United KingdomInsolvency/Bankruptcy/Re-Structuring

Key points

  • Current statistics show that insolvencies in the construction industry are on the rise
  • The liquidation of Carillion and the administration of Interserve highlight the importance of understanding the impact of a contractor's or a supplier's insolvency
  • Parties should be able to recognise the warning signs and indicators of an imminent insolvency, so steps can be taken promptly to minimise the impact
  • Adjudication proceedings are unlikely to assist where the defaulting party is in liquidation or administration

Insolvency in the construction industry is once again in the headlines. The liquidation of Carillion and the administration of Interserve (as well as several other high-profile tier 2 and 3 contractor insolvencies) have highlighted how important it is to be alert to the signs of insolvency in the supply chain on a construction project.

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