The H&V News retentions survey has been launched for readers to reveal the impact of retention clauses in contracts.
The online survey consists of six multiple choice questions and follows Professor Rudi Klein’s article (H&V News 13 Feb, p42), highlighting the issue of how many subcontractors had lost thousands of pounds in retention monies when the main contractor had gone into liquidation.
Specialist Engineering Contractors’ Group chief executive officer Professor Klein referred to the recent Patton Group collapse, where many businesses lost retentions.
Tier two and tier three contractors are particularly vulnerable to main contractor and subcontractor insolvency, he said.
While retentions are used by other countries, these are either held in trust or by an independent stakeholder.
There is a complete lack of security for UK companies’ retentions, Professor Klein said, who is proposing a parliamentary bill to address the issue.
This will place a statutory obligation for retention monies to be held in a separate account, with the procuring party acting as trustee.
The result will see the money ring-fenced and excluded from insolvency actions.
The results of the survey will be published in a future issue of H&V News and shared with Professor Klein to support action to address the issue.
A previous H&V News survey on the issue of retentions showed that 57 per cent of respondents had lost retentions on up to 10 contracts.
Professor Klein is also appealing for details of MPs expressing an interest to help with this issue and can be contacted by email at email@example.com.
“There cannot be anything more galling than seeing your £50,000 retention disappear as your payer falls prey to insolvency,” Professor Klein said.
The H&V News Retentions Survey will remain open for responses until 14 March.