Mr C Benson and others (see attached schedule) v Carillion Services Limited (In Compulsory Liquidation) & Others — 2021

This was a preliminary hearing in the consolidated protective award claims. The Tribunal unanimously held that the duty to consult under section 188 TULRCA arose on 14 January 2018 and that the respondents had not established special circumstances within section 188(7) that made compliance not reasonably practicable.

The Tribunal rejected the claimants’ arguments that the trigger point was 6 December 2017 or, alternatively, 31 December 2017. It accepted that Carillion’s financial position had been deteriorating for months and that the board materials showed serious liquidity pressure, but found that on 6 December the board was still considering restructuring options, including a debt-for-equity swap, a sale of parts of the group, or a turnaround plan, rather than having formed a settled intention to place the company into compulsory liquidation. The Tribunal also noted gaps in the board record and the absence of evidence from board members, but held that the claimants had not proved an earlier proposal to dismiss within the meaning of section 188.

For 31 December 2017, the Tribunal treated the urgent request to HM Government as evidence of a very serious position, but concluded that it still did not show a sufficiently clear intention to go into compulsory liquidation. The request and related documents described the need for further funding, the risks of failure, and contingency planning, but did not exclude administration as an alternative insolvent outcome. The Tribunal therefore found that the duty to consult had not yet been triggered by that date.

The Tribunal held that the trigger point came on 14 January 2018, when HM Government refused the requested support, the lenders withdrew backing, and the board resolved to petition for compulsory winding up. It found that compulsory liquidation would inevitably dismiss the workforce, so the section 188 duty was engaged on that date. Applying Clarks of Hove and the later authorities cited, the Tribunal rejected the special circumstances defence because the weekend events were the culmination of a deterioration from July 2017 rather than sudden intervening events out of the ordinary. Since the first limb of section 188(7) failed, the Tribunal did not need to decide what further steps, if any, would have been reasonably practicable.