Insolvency and Adjudication: A Growing Issue During the COVID-19 Pandemic

Date: 24 March 2020

The outbreak of COVID-19 in the UK has caused significant disruption in the construction sector. While the government confirmed on 24 March 2020 that building work can continue if it can be done safely, an increasing number of projects are facing suspension for an indefinite period of time. The inevitable consequence of this is a serious cash flow problem for many contractors and sub-contractors, which sooner or later may lead to their insolvency.

Over the last 12 months, there have been a number of TCC cases dealing with the relationship between adjudication and insolvency. In light of the COVID-19 pandemic, this developing area is more relevant than ever.

This Guide (by Emma Healiss) is intended to provide a useful overview of the current legal position and to act as a checklist for those who have concerns about insolvency in the context of adjudication. Emma is frequently instructed to act in and advise upon adjudications and enforcement proceedings. In the last 12 months, Emma has worked on a number of adjudication cases with an insolvency angle. She represented the successful defendants in Indigo Projects London Ltd v Razin [2019] Bus LR 1957, who resisted enforcement on the grounds of the claimant’s insolvency.