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continuity of supply of essential services to insolvent businesses

11 July 2014

The Government has opened a consultation to consider the powers contained in the Enterprise and Regulatory Reform Act 2013 which may be exercised in order to ensure the continuity of the supply of utilities and IT goods or services to insolvent businesses.

Whilst there are provisions in the Insolvency Act 1986 which already seek to restrict the extent to which suppliers can demand ransom payments for the continuation of supplies to insolvent businesses, there is a strong argument to extend the scope of the current provisions to specifically apply to ‘on-sellers’ of utility and telecoms services in light of deregulation in these sectors and changes in commercial practice and supplier behaviour since these provisions were enacted.

The consultation is open until 8 October 2014 (12:00am) and can be viewed in full here.

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