Further Delay in outlawing bans on assignment
As long ago as December 2014 the Government announced its intention to bring forward legislation outlawing bans on assignment in commercial contracts.
The draft Business Contract Terms (Restrictions on Assignment of Receivables) Regulations 2015 included significant caveats for both supply chain financiers and for “terms giving rise to a duty of confidence.” An extensive consultation process followed involving both ABFA and groups of businesses from various industry sectors, including energy, retail and construction. As a result it is understood that BEIS has dropped any special protection for supply chain financiers and has taken on board at least some of ABFA’s concerns that an unrestricted definition of “duty of confidence” could significantly dilute the intended effect of the legislation.
There has been no visible progress publicly announced since August 2015, and BEIS indications that the legislation would be enacted in 2016 have proved to be over-optimistic, no doubt partly as a result of the enormous workload imposed on the civil service by Brexit.
However, it is understood that ABFA remains involved in the process and that the Government remains committed to legislate, though a further delay may be likely as a result of the forthcoming General Election.