We have recently encountered a number of situations where academies have found themselves liable to large sums of money after their commercial contracts with catering providers have exposed them to reimburse payments.
We have recently encountered a number of situations where academies have found themselves liable to large sums of money (sometimes as much as £50,000-£100,000) after their commercial contracts with catering providers have exposed them to reimburse payments - which were never contemplated on when entering the contracts years ago.
Cases experienced have often followed a similar series of events:
The claims often arise under contracts which were signed and agreed a long time ago and, for many, come out of the blue - long after the end of the contract, especially if the LGPS has taken a while to calculate and assess the value.
Such claims can understandably cause significant issues to academy budgets and forward planning. These types of cases often involve the commercial contract provisions which were signed between the contractor and the academy, and can therefore have varying outcomes depending on the precise wording which was used.
If you have a situation which follows a similar pattern to the above, or are concerned about any pension liabilities that have either arisen or may not have been considered at the outset of entering an arrangement, please contact us. We can discuss your individual situation and assess, and provide tailored advice of the precautions or options available to you.
Our experience has shown there are a range of discussions which can be had with contractors and LGPS both before and after an exit payment situation has arisen, which can limit any potential exposure.
It is also important for academies and schools to be aware of the terms of any protection bonds which may have been put in place to cover these types of liabilities. Often these bonds are time-limited and without specific agreement and will not be extended, even if a commercial agreement between an academy or school and the contractor is.
Please do not hesitate to contact us if you are considering using, changing or terminating a contractor, in order to consider if there are any liabilities of which you need to be aware. Our team will be able to review your current documentation or discuss any situations you have encountered with your contractors or LGPS.
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