During the Covid-19 pandemic, much of the focus has been on shoring up existing delivery and, where possible, extending arrangements if it is not possible to re-procure.
Carillion’s liquidation – immediate steps to take
It is too early to know how this will all play out. In the meantime, many of our clients will have concerns from this decision and we plan to issue further briefings as this sorry tale unfolds. There will be many operational and legal risks to manage. Obviously, the main practical concerns will be service continuity or completing the works and preserving jobs.
At this stage we would advise clients who have contracts involving Carillion to consider the following:
- To avoid the liquidator later claiming from you for breach of contract, read the payment and termination clauses of your contract and comply with them. You are not relieved from complying with contract terms just because Carillion has indicated that they intend to go into liquidation. The standard forms all have different provisions – for example, the PPC or TPC form of contract terminates automatically if the contractor appoints an administrator and JCT or NEC forms do not, with PFI or PF2 being significantly more complex.
- Find out what other documents you should have – do you have a parent company guarantee or a performance bond? If you are in a construction context, do you have signed collateral warranties from sub-contractors which give you a right to “step-in” to the sub-contracts to finish off the works in the event they are terminated? You need to understand the terms of these documents to assess what rights you have against any other parties (parent company or a bondsman or sub-contractor) and to find out to do next.
- Find a back-up contractor who can step in at short notice, particularly in an FM or services context. In these circumstances, the Public Contracts Regulations 2015 (the procurement rules) allow contracting authorities to appoint their own replacement contractor on a temporary basis whilst the contract is re-procured, or to transfer (novate) contracts to a “rescue” contractor if any contractor attempts to purchase any part of Carillion’s assets, and you are happy to do business with that rescue contractor – you are under no obligation to do so.
- If you have a works contract and no immediate replacement contractor, you will need to arrange insurance and security for the work site.
- Get advice about staff who may have a right to transfer to any replacement contractor or to you, if you are taking the services or works back in-house. Usually, staff still have the right to transfer in the event a contractor ceases trading, although this is not always the case, depending on the precise nature of the works or services, and the circumstances in which the new contractor takes on the work or services.
The Prime Minister announced on Tuesday 22 September a new range of restrictions to protect us from the Covid crisis, some of which will apply to charities.
Following the end of the possession stay on 21 September, Helen Tucker & Rebecca Sembuuze from our housing litigation team discuss the most recent guidance, priority cases and what to expect in court.
Covid-19 has resulted, on the whole, in a marked co-operation between contracting authorities and their suppliers as everybody focuses on maintaining delivery as far as possible.
Employment Tribunal rules in favour of claimants in minimum wage case – has the interpretation of “working time” changed?
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It is anticipated that as lockdown restrictions ease, and particularly with children and young adults returning to education, cases of meningitis will start to rise.
As we continue to emerge from lockdown measures and deal with local measures and the short and long term economic impact of Covid-19, local authorities will need to re-assess how services will be delivered for years to come.
The Government first announced plans for a shared ownership right to buy in October 2019. At the time the sector raised concerns about the impact the plans would have on housing associations ability to borrow. An election and a pandemic later the Government announced, during the CIH Housing Festival last week, the return of the right to shared ownership as part of its Affordable Homes Programme (AHP).
Two final pieces of the possession jigsaw have been published on 15 September 2020. Mr Justice Knowles’ working group on possession proceedings has issued its guidance on the “overall arrangements” for possession proceedings.
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