Contractor Insolvency

Given small profit margins, extended supply chains, the sometimes draconian effect of the statutory payment regime under the Housing Grants, Construction & Regeneration Act 1996, the poor payment practices of some employers and main contractors, and difficult financial climates in recent years, contractor [in]solvency is a subject that arises with some frequency, both from the perspective of the contractor itself and from that of the party or parties it is in contract with. Specifically: what is the risk of insolvency and what happens if insolvency actually occurs?

Those questions in turn provoke questions such as the following:

At procurement stage

Is the contractor a sensible (i.e. financially strong) contracting party for me? Do I need bonds or guarantees to protect me? How can insurance protect me? What termination rights do I have in the event of insolvency?

At works stage

If the works are incomplete at insolvency stage, what rights do I have over those works and unused materials? Can and how quickly can I bring in a replacement contractor? What about liability for defects in works that were carried out by an insolvent contractor?

At dispute stage

What value to me is an insolvent defendant: none? Can an insolvent claimant continue with proceedings against me? If I lose an adjudication and have to pay out, will the successful contractor still be trading by the time I hopefully get a Decision in a second dispute going back the other way and allow me to recover my money? If not, can I resist payment in the first adjudication?

Wrongful trading under the Insolvency Act is another area that we get asked about: i.e. have Directors continued to trade when there was no reasonable prospect of the company avoiding insolvency?

Construction law and insolvency law are often bedfellows and we have great experience in this area.

Get in touch

Get in touch using the contact form below, calling us on 0204 579 8686 or emailing us at

Why Ridgemont?
  • Senior, highly experienced solicitors with excellent track record
  • Expert understanding of construction law
  • Commercially focused, pragmatic advice
  • Attentive and responsive to client needs
  • Open, ethical and transparent approach to fees
  • Charge only for work done (not receiving email correspondence etc)
  • Solutions-focused approach to delivering results for clients
Who we act for?

We act for developers, contractors, sub-contractors, professionals and investors across a range of sectors from residential to retail.

Your journey with us
  1. Get in touch using the contact form below, calling us on 0203 909 9590 or emailing us at
  2. We guarantee that we will be in touch with you the same day to listen to your needs and to explain how we can help and the likely cost.
  3. Assuming you wish to engage us, we will then onboard you as a client, which normally takes a matter of hours.
  4. From there, you will be assigned an experienced solicitor who will have conduct of your matter from cradle to grave and be available to speak to you and responsive to emails at every juncture.

You can learn more about our journey by watching these videos.

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Head of Construction


Head of Construction

Head Office

24 Greville Street,
London, EC1N 8SS

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St Nicholas House, 31-34 High St, Bristol, BS1 2AW
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