The following Construction guidance note Produced in partnership with CMS provides comprehensive and up to date legal information covering:
This Practice Note is intended to provide advice to employers on how to spot problems with insolvent contractors and how the employer can take steps to protect itself in advance. For details on the steps to take in the event the contractor has become insolvent see: Employer steps to take if contractor becomes insolvent—checklist.
most importantly an employer needs to keep alert to the contractor's financial status
the employer should take heed of ongoing rumours about the contractor's financial position (either in the press or by word of mouth)
look out for official announcements to shareholders/the stock market (for example, profit warnings)
keep aware of non-payment or late payment of sub-contractors by the contractor
note any late or partial commitment to key supply contracts by the contractor
be aware of any redundancies or inexplicable removal of personnel from the project by the contractor
removal of materials or plant from the site
any reduced resourcing by the contractor on site
note any constant delays to programme without any adequate explanation
confirm suspicions by carrying out a Dun & Bradstreet search/report, which should disclose, for example, any unsatisfied court judgments against the contractor
There are various ways in which an employer can protect itself in advance
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