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RETENTIONS UPDATE FEATURES


A fight


By Professor Rudi Klein Barrister and SELECT Consultant


s readers of CABLEtalk will know, SELECT has been active on the battleground of retentions for many years, fi ghting tirelessly on Members’


behalf for improved payment practices. Unfortunately, change in contractual practices seem to recur at a snail’s pace and this is particularly true with retentions, which have been embedded in contracts for about 200 years. However, things started to look up last


year. For starters, we had the Pye Tait report which had been commissioned by Scottish Government and which revealed some interesting statistics: ●81% of clients in Scotland rely on retentions, compared to 65% in England ●Compared to England, almost twice the proportion of clients in Scotland use retention monies as part of their working capital ●82% of Tier 1 contractors use retentions as part of their working capital – no surprise there!


●Some Tier 1 contractors actually invited clients to deduct retentions to make it easier for them to withhold retentions downstream, although they don’t usually need an excuse to do this. Summing up, Pye Tait concluded: “There is a strong reason to accept that the system of retentions is not working to the advantage of the Scottish construction sector.” Pye Tait recommended that the fairest outcome would be for cash retentions to be protected in an independent ring- fenced account. This was echoed by the


“T ere is a strong reason to accept that the system of retentions is not working to the advantage of the Scottish construction sector” 34 CABLEtalk JUNE/JULY 2021


Keeping up the


Our in-house specialist responds to a recent Member inquiry about retentions by advising on the latest developments and asking: Will the Scottish Government act?


majority of respondents to the Scottish Government consultation which closed in May last year.


Scottish Government Retentions Working Group At the beginning of this year, the Scottish Government set up a working group to consider how best to take the matter forward, having regard to the outcome of the consultation and the Pye Tait report. We are represented on this group


by the excellent Gordon Matheson, Past President of the Scottish and Northern Ireland Plumbing Employers’ Federation (SNIPEF). While its deliberations have been kept under wraps, it is to be hoped that we might see some positive developments during this (new) session of the Scottish Parliament. Watch this space!


An example from England A recent legal case in England has, yet again, emphasised that retentions are


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