Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Insolvency definition

What does Insolvency mean? In practice, insolvency describes a financial state where a debtor cannot meet liabilities when due, triggering remedies such as administration, liquidation or bankruptcy and informing directors’ duties and avoidance claims. For companies in England & Wales, Scotland and Northern Ireland, the Insolvency Act 1986, s 123 sets two alternative tests: - Cash‑flow insolvency: an inability to pay debts as they fall due. The inquiry is practical and forward‑looking, not confined to today’s bills (Re Patrick & Lyon Ltd [1933] Ch 786; BNY Corporate Trustee Services Ltd v Eurosail [2013] UKSC 28). - Balance‑sheet insolvency: liabilities (including contingent and prospective liabilities) exceed assets on...

Construction insolvency: practical guidance on contractual protections, payment and termination, CIGA 2020 restrictions, adjudication (Bresco), collateral warranties, step-in rights, and Building Safety Act obligations

Published by a LexisNexis Restructuring & Insolvency expert

Practice notes

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This Practice Note explores frequent challenges arising from Insolvency within the construction sector. It examines the implications and usefulness of adjudication as a route to recovery where insolvency may be looming, and offers practical pointers on actions to take if a party becomes insolvent. The guidance is general in nature and will not suit every construction insolvency scenario, and it should be weighed carefully against the specific facts of each case. Accordingly, this Note should be read in context and not as a one-size-fits-all solution.

Introduction to the construction industry and construction Procurement

Construction schemes typically involve numerous contributors performing distinct functions across procurement and delivery. A non-exhaustive set of participants includes:

employer—the person or organisation seeking delivery of the project and engaging professionals to perform the works. The employer may be from the public or private sector and is often referred to as ‘the client’
architect—generally undertakes the design role, acting on the employer’s brief
structural engineers—serve as advisers to the architect on structural aspects across the project
service engineers—contribute to the design process in respect of...

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Gurbinder Grewal

Dentons

Gurbinder is a partner at Dentons UKMEA LLP, focusing on resolving contentious construction and engineering disputes through arbitration, adjudication, litigation or alternative dispute resolution. He typically acts for housebuilders, employers, main contractors and subcontractors in a wide range of sectors in construction and engineering disputes relating to payment, defects, claims for variations, extensions of time, loss and expense, and professional negligence. Gurbinder is also experienced in acting as a 'project counsel' on live construction and engineering projects either domestically or internationally, assisting clients or contractors in managing claims and avoiding disputes....

Ian Fox

Dentons

Ian is a partner in the Restructuring, Insolvency and Bankruptcy practice, specialising in all areas of contentious insolvency work (including major commercial litigation). He also has significant experience in restructuring and non-contentious insolvency work and has advised insolvency practitioners, lenders, corporates and directors in relation to insolvency issues in sectors including energy, real estate, leisure, retail, media and sport. He has undertaken secondments with the restructuring teams of two of our major banking clients, gaining experience in all areas of their businesses....

Michael Wright

Dentons

Michael specialises in the resolution and management of construction-based disputes. He has experience of formal litigation in the Technology and Construction Court, as well as various forms of alternative dispute resolution, including adjudication, mediation and international arbitration. Examples of Michael's experience include those set out below.Advising a joint venture main contractor in a US$142 million ICC arbitration relating to variations, delay and breach of contract in respect of the construction of a major new transport link in Doha. Advising a joint venture main contractor in a £300 million arbitration regarding the design and construction of a major airport in the Middle East.Advising a well-known national housebuilder on a high-profile dispute with one of its customers, where the total value of the dispute exceeded £1 million.Advising a well-known national housebuilder in respect of a TCC dispute with more than 40...

Web page updated on 21/05/2026

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