Part 1

Defence procurement

Defence procurement arrangements

Financial claims against contractors or former contractors
3
1
If a financial claim is brought in a court in the United Kingdom or elsewhere against a company which is, or has been, a contractor, any liability of the company resulting from the claim is transferred to the Ministry of Defence.
2
The Secretary of State may make payments for the purpose of settling any liability of the Ministry of Defence that may arise, or has arisen, under this section.
3
A company which is, or has been, a contractor must provide the Secretary of State with any assistance that the Secretary of State reasonably requires in connection with a financial claim that may be, or has been, brought against the company (including in connection with any appeal or further appeal in relation to the claim).
4
The assistance that a company may be required to provide includes in particular—
a
providing documents, other information or explanations;
b
providing access to evidence;
c
making employees available for the purposes of court proceedings.
5
An obligation imposed on a company under subsection (3) is enforceable as if contained in a contract between the company and the Secretary of State.
6
For the purposes of this section, a claim is a “financial claim” to the extent that—
a
it is a claim for damages or any other claim for a sum of money,
b
it is brought by a person other than an excluded person, and
c
it is not an excluded claim.
7
In this section—
- “excluded person”, in relation to a claim against a company, means—
  1. another company which is, or has been, a contractor, or
  2. a Minister of the Crown or Government department;
- “excluded claim”, in relation to a claim against a company, means a claim which relates to—
  1. services provided by the company otherwise than to the Secretary of State for Defence,
  2. a contract of employment to which the company is party,
  3. any contract (other than a contract of employment) entered into by the company for the purpose of enabling it to provide services,
  4. any health and safety obligation of the company, or
  5. anything done or omitted to be done by the company before it became, or after it ceased to be, a contractor;
- “health and safety obligation”, in relation to a company, means an obligation (whether or not imposed by legislation)—
  1. relating to the health, safety or welfare at work of the company's employees, or
  2. relating to risks to the health or safety of other persons arising out of or in connection with the company's activities.
8
Nothing in this section affects any arrangements between the Secretary of State and a company which is, or has been, a contractor under which the company is to compensate the Secretary of State in respect of—
a
any liability under subsection (1), or
b
any payment made under subsection (2).