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Trading through the pandemic: insolvency issues, risk and contractual performance

12 November 2020

As England endures its second lockdown, it remains unclear how long we will continue to live under coronavirus restrictions. The economic fallout is staggering and the pressure many businesses are facing is unprecedented.

According to Bank of England data, UK Gross Domestic Product (“GDP”) fell by 22% over quarters one and two this year, the biggest fall on record. Against this background, job vacancies are down by 55% year-on-year. Last month, Government support was estimated to have cost £192bn (equivalent to 9% of annual GDP) and support is expected to be reduced markedly next year.

In response to the COVID-19 pandemic, the Government passed the Corporate Insolvency and Governance Act 2020 (“CIGA”), which made substantial changes to insolvency and rescue laws. We are also seeing a real desire to tighten up Government subsidies. A reduction in fiscal support alongside a second lock down will undoubtedly have a serious impact on businesses in the coming months as things get a lot tougher. Click ‘download files’ to read the full summary.


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