When a construction company enters administration or liquidation, it is often assumed that outstanding payments are no longer recoverable. In reality, many insolvent businesses retain valuable contractual rights, unpaid invoices, retention monies and adjudication claims that can significantly increase returns to creditors if pursued correctly.
For insolvency practitioners (IPs), administrators and liquidators, the challenge is not simply identifying these assets—it’s having the specialist expertise and funding to recover them efficiently without placing additional financial strain on the insolvent estate.
Understanding the construction insolvency claims process is essential for maximising recoveries and ensuring valuable claims are not overlooked.
Construction Insolvency Requires Specialist Knowledge
Construction disputes differ from standard commercial debt recovery.
Projects often involve multiple contracts, payment schedules, variations, extensions of time, retention monies and complex contractual obligations. Determining what is recoverable requires not only insolvency expertise but also a deep understanding of construction law and the technical issues that underpin many disputes.
This is why construction insolvency claims should be assessed by specialists who understand both disciplines.
Identifying Recoverable Assets
The first step is to review the insolvent company’s available assets and contractual rights.
Recoverable claims may include:
- Outstanding book debts
- Unpaid interim payment applications
- Retention monies
- Final account claims
- Contract variations
- Loss and expense claims
- Disputed payment notices
- Rights to commence adjudication
Each claim is assessed on its legal merits, supporting evidence and commercial viability.
Importantly, reviewing the entire debtor book rather than selecting only high-value matters can uncover additional recoveries that benefit creditors.
Choosing the Right Recovery Strategy
Once viable claims have been identified, the appropriate recovery method can be determined.
Depending on the circumstances, this may involve:
- Negotiated settlement
- Construction adjudication
- Court proceedings
- Enforcement of judgments or adjudication decisions
For many construction disputes, adjudication provides a faster and commercially effective route to recovering money owed under construction contracts.
Selecting the right strategy depends on the nature of the dispute, the available evidence and the likelihood of successful recovery.
Removing the Financial Barrier
One of the biggest obstacles to pursuing construction claims is cost.
Legal fees, expert reports, court fees and enforcement expenses can quickly exhaust the limited funds available within an insolvent estate.
A fully funded litigation model removes this barrier.
Pythagoras Capital funds approved claims on a contingency basis, covering the costs of pursuing recovery without requiring any upfront financial contribution from the insolvency estate. This enables insolvency practitioners to pursue valuable claims while preserving estate assets for distribution to creditors.
The Importance of Construction Adjudication
Adjudication has become one of the most effective tools for resolving construction payment disputes.
Its speed and specialist nature make it particularly valuable where recoveries need to be achieved efficiently.
Pythagoras Capital is uniquely positioned in this area. The firm’s involvement in the landmark Bresco Supreme Court case helped establish that insolvent companies can pursue adjudication, reshaping the legal landscape for construction insolvency claims across England and Wales.
Today, this legal precedent continues to create opportunities for insolvency practitioners to recover sums that may previously have been considered beyond reach.
A Different Approach to Construction Insolvency
Unlike traditional law firms or third-party litigation funders, Pythagoras Capital provides an entirely in-house service that combines insolvency lawyers, construction lawyers and engineering experts.
Working as Agents of the Insolvency Practitioner, the team manages the claims process from initial assessment through to enforcement while ensuring key decisions remain with the officeholder.
Rather than cherry-picking selected claims, Pythagoras Capital reviews and pursues the full debtor book wherever commercially viable, helping maximise recoveries for creditors and reducing the administrative burden on insolvency practitioners.
Maximising Recoveries with Specialist Expertise
Construction insolvency often involves valuable claims that remain unrealised because estates lack the funding or specialist expertise to pursue them.
With fully funded litigation, construction adjudication expertise and an integrated in-house team, Pythagoras Capital helps insolvency practitioners unlock value from debtor books, contractual claims and outstanding construction payments.
Whether acting for administrators, liquidators or other officeholders, the goal remains the same: maximise recoveries, preserve estate funds and deliver better outcomes for creditors.
Contact Pythagoras Capital to discuss how specialist construction insolvency expertise and fully funded litigation can help recover more from insolvent construction businesses.