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Insolvency in the construction industry

In August 2012 the NSW Government announced an Inquiry into Construction Industry Insolvency in NSW, to be chaired by Bruce Collins QC.  The inquiry has now published its discussion and issues paper.

The discussion paper is very focussed on the interests and rights of subcontractors, being the group perceived to be most directly affected by contractor insolvency.  Although the comments in the introduction to the discussion paper appear to concede that much of the problem is created by cyclical commercial pressures and subcontractor mismanagement, the paper proposes significant changes with a view to reducing the risk to subcontractors of further contractor insolvency.  The underlying premise to the proposals is that, without intervention, subcontractors are not sufficiently able to protect their interests when contracting or during the course of a project. More…