Commercial litigation faced by private sector suppliers

Published on 25 Aug 2010 under category: legal

More firms in the private sector could face commercial litigation because of government spending cuts, according to a new report.
Accountancy firm Wilkins Kennedy has revealed that in the first six months of 2010 it has seen the collapse of 168 businesses that provide to key government sectors.
Commenting on the research, director of the firm Anthony Cork said: "So far the impact of the government's austerity drive has been most visible in the slew of profit warnings from listed companies.
"However, for an increasing number of companies the situation is even worse and they are being forced into insolvency."
Firms that have come to depend on public sector business could find themselves struggling with higher fixed costs once contracts are delayed or stripped down.
Some of the private sector companies that are already facing difficulties this year include Connaught, Southern Cross Healthcare, Mouchels and Cable & Wireless Worldwide.
Companies could be in for even tougher times when further spending cuts are announced in the autumn, Mr Cork warned.

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