Rescue Act? Insolvency legislation & the construction industry

In brief

• Whether new insolvency procedures introduced by the Corporate Insolvency and Governance Act 2020 (CIGA 2020) on the construction industry fetter a company’s statutory right to adjudicate under s 108 of the Housing Grants, Construction and Regeneration Act 1996.
• The impact of CIGA 2020 on termination rights within construction contracts.

Significant changes to corporate insolvency law were introduced on 26 June 2020 when the Corporate Insolvency and Governance Act 2020 (CIGA 2020) was enacted. It represents the government’s latest attempt to assist companies affected by the financial repercussions of COVID-19.

In this article, we focus on the two new restructuring and insolvency procedures introduced by CIGA 2020, and their impact on the construction industry and rights to commence adjudication, in particular. The new procedures are the ‘new company moratorium’ and the ‘new restructuring plan’.

CIGA 2020 has also introduced prohibitions on supplier companies’ rights to terminate