The story of a provisional liquidator being appointed over well known M&E subcontractor Haughton & Young today will send shivers down the spine of the construction industry - if it could happen to Haughton & Young sure it could happen to anyone.

How can specialist subcontractors be going under in the middle of a construction boom? The answer is in the article below: not getting paid, not getting paid on time and not pricing right.

It’s time for subcontractors to rock the boat and use the powers given to them under the Construction Contracts Act 2013. That means suspending work, referring payment claims to adjudication promptly and not tolerating ‘pay when paid’ illegal terms. Too often I hear that “the industry is too small” and “I don’t want to be upsetting relationships” and “they got fierce cross when I threatened to go legal”. I’m sure they did. The shareholders and employees of Haughton & Young probably wished they rocked the boat more and earlier.

Notably the company applied for the appointment of a provisional liquidator. Why didn’t they consider examinership? Examinership is a process where the Court grants a 100 days protection against creditors applying to wind up a company so a ‘scheme of arrangement’ can be put in place by the examiner. It’s there to protect jobs. Haughton & Young would surely have qualified for examinership, employing 200 people.

For the creditors who were trying to get a hold of their plant, materials and vehicles, they are probably in line for less than 5c in the Euro for their troubles. Much better that creditors include in their terms and conditions a ‘Retention of Title’ clause. Retention of Title allows a business that is owed money to retain title to the supplied materials until its paid for. That means you can go in and legitimately remove your materials from the debtor’s premises or site as long as the materials are not fixed to or incorporated into the building.

Leman Solicitors specialise in construction law.