Retention of Title

Advice and strategies for creditors with unrecovered debts


by Mark Hendrick

When your business supplies goods to customers on credit, it is possible that payment won’t be received as agreed. This situation is a considerable risk for you, but more so if your customer experiences an insolvency. If insolvency is the only option for your customer, then you will become an unsecured creditor. Our retention of title specialists can help deal with any issues that may arise as a result.

In order to mitigate this risk, it is possible to include a retention of title clause within a contract of sale, for which professional guidance should be obtained at the point of drafting as retention of title is a complex area, further compounded by the many eventualities that could occur.

In the instance that a client enters liquidation, it is essential that you make the liquidators aware of the existence of the retention of title claim as soon as possible. The office holder may require you to complete a retention of title questionnaire to help them better understand the position, and to ensure that the clause meets the requirements. In addition, you will need to provide documented evidence to support your retention of title claim.

Unless allowed by the administrator, you will be unable to enforce a retention of title clause due to the moratorium period that protects the company from legal action.

Retention of title is a regularly evolving area of case law and it is advised that you regularly review clauses and their potential effectiveness in order to protect your interests.

Our retention of title specialists work with a wide range of businesses, providing advice on a wide range of pre-insolvency strategies for their portfolio of business-to-business clients, maximising their position and recoveries in instances where clients enter into insolvency proceedings.