Tony Bingham’s boss, a main contractor, was very good at chasing retentions from employers and getting paid (25 January, page 60); the problem comes when the employer goes bust.

It is rare for an employer to actually set up a separate trust fund into which retentions are paid unless they are asked or required to do so. If that is not done before the employer goes into administration, there is no identifiable fund that a contractor can claim.

In the early nineties, contractor clients would alert us to the possibility of an employer going into administration and a quick fax would be sent to their finance director requiring them to place the retention funds in a separate identifiable account or else he would be on the receiving end of an injunction (to be applied for that afternoon).

With worsening economic prospects, we might well see a greater concern on the part of contractors to ensure that their retentions (at the very least) are secure from insolvency.

My then senior partner, Tony Woolf, ran the first case of this type, Rayack Construction vs Lampeter Meat, and achieved the objective of an order requiring the employer to set up a separate trust fund for the retention (which was a staggering 50% of the sum certified), but to no ultimate avail. Both parties eventually went bust.

Robert Stevenson, Berrymans Lace Mawer

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