Fraser Ritson and Claire Wainwright from Addleshaw Goddard provided a summary of some of the key liabilities facing parties when the contract expires and the project company reaches the end of its life.

They explained that the SPV will most likely be terminated through a members voluntary liquidation (MVL), which requires members to make a statutory declaration that the company will be able to pay all its remaining debts within 12 months.

They warned that there can be a risk of personal liability on those directors should the project company become insolvent and it is found that the directors did not prepare sufficient contingency for the liabilities it was likely to face.

Overall, the message was clear that parties need to be thinking about such potential liabilities, and what happens to the project company, from some time before handback.

Sarah Wilson, managing associate in Addleshaw Goddard’s construction disputes team, then gave a presentation on the recently enacted Building Safety Act, which may have a significant impact on asset management.

While the focus of the Act covers anything containing a ‘dwelling’ (meaning housing PFIs are within its scope), the Secretary of State also has the power to extend that to other areas - and has already done so in the case of care homes, for example. Hospitals are also likely to be impacted by the Act.

Although a lot of provisions relate to new projects, where a contractor is undertaking significant works (perhaps, in a PFI contract, as part of major reconfigurations related to handback) on buildings over 30 metres, then those provisions will also apply.

Perhaps the most significant requirement in the Act as it relates to the handback of PFI contracts is the designation of the ‘accountable person’ and ‘principal accountable person’. If these individuals are found to have failed in their duties, it is considered a criminal offence. In most PFI scenarios, the public sector and all private sector parties, with the likely exception of the funders, would be considered ‘accountable persons’ for the purposes of the Act.

Meanwhile, it has also opened up two new routes in which a claim can be brought for issues going as far as 30 years back. One of these relates to defective or incorrectly marketed cladding products, while the other is where a dwelling becomes unfit for habitation. Both of these could provide new routes for claims to be made as projects head towards expiry and authorities work with partners to consider whether their project meets the standards set in the original contract.