What will the insolvency bill mean for construction contracts?

By Lindy Patterson2020-06-15T05:00:00

The bill aims to help firms hit by the pandemic but will permanently change how contracts work

‘Due to the coronavirus many otherwise economically viable businesses are experiencing significant trading difficulties […] this bill is aimed at ensuring businesses can maximise their chance of survival”. This is the policy background to the Corporate Insolvency and Governance Bill now making its way quickly through parliament and which will impact on construction contracts.

The bill consists of eight measures, which are either permanent changes to insolvency law or temporary changes to insolvency law and corporate governance. One of the temporary measures is removal of the threat of winding up where the unpaid debt is due to covid-19. It also voids statutory demands served during the period March 2020 to 30 June 2020.

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