Carillion insolvency: Sub-contractors - What you need to do

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Carillion insolvency: Sub-contractors - What you need to do

Published 18 January 2018

The facts

The Official Receiver has been appointed Liquidator of the following:

  • Carillion Plc;
  • Carillion Construction Limited;
  • Carillion Services Limited;
  • Planned Maintenance Engineering Limited;
  • Carillion Integrated Services Limited; and
  • Carillion Services 2006 Limited.

You as members of Carillion's supply chain need to try to protect your business and exposure to non-payment for works and services that have already been performed.

  • Check your sub-contract – can you suspend or terminate?
  • Can you terminate your sub-sub-contracts and avoid payment?
  • Ensure you serve the correct notices on time e.g. notice of termination, pay less notices, notice of suspension etc.
  • Take lawful steps to secure your site resources and/or plant or materials whether fixed or unfixed for which you have not been paid.
  • Keep good physical records of works completed to date.
  • You may be entitled to exercise a lien in respect of design work you have performed i.e. prevent use of the design without payment.
  • Contact the Carillion PwC website to ensure you will be paid for work you do post liquidation. This is only likely to apply to works for the Public Sector. We have been advised by PwC that no payment will be made for goods or services provided prior to 15 January 2018.
  • It may be that your sub-contract contains a term entitling Carillion or your immediate employer to avoid payment if the relevant sub-contract contains a clause entitling the contractor to not pay you when one of the parties in the chain has become insolvent. A final account reckoning will take place at the end of the works.
  • If there is no such legitimate pay when paid for insolvency clause you should seek to enforce your right to payment by way of adjudication and/or suspension as quickly as possible. 

If you have any concerns regarding this above please do not hesitate to contact Michael Blackburne.

Authors

Michael Blackburne

Michael Blackburne

London - Walbrook

+44 (0) 20 7894 6360

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