A West Midlands insolvency and litigation lawyer is advising companies caught up in the MG Rover collapse to check that they retain title to their goods and to take immediate action to recover them.
Mark Elder, an associate at Black Country law- firm George Green, has been contacted by a number of businesses who supply MG Rover, MG Rover Sport and Racing and Powertrain, all of which are in administration, seeking urgent advice.
He said: "In the early days of an insolvency, urgent advice to worried suppliers centres upon rights concerning retention of title.
"Indeed, this case is certainly no different, although certain suppliers who are solely or very heavily dependent upon contracts with MG Rover have also sought advice concerning their own financial situation.
"The first thing that suppliers need to check is that they retain title to their goods.
Normally this is achieved by ensuring that a retention of title (ROT) clause is included in their terms and conditions of sale."
According to Mr Elder to ensure that a supplier has the best chance of arguing that their terms and conditions are incorporated into a contract, they should always ask the buyer to sign an acknowledgement that these will apply in respect of the contract.
"However, this is not always practical or possible. As a consequence, suppliers should therefore ensure that their terms and conditions of sale are included on all price lists, brochures, quotations and order acknowledgements."
According to Mr Elder, once suppliers have successfully checked that they retain title to goods, they need to take immediate action.
"They must contact the administrators to arrange an urgent visit to the premises to identify stock held. At the present moment, given the proximity of the administrators' appointment, the administrators are still believed to be denying access to the premises.
"It is equally important to get an inventory of stock signed by the administrators (or authorised member of their staff) to verify the stock held before taking steps to assert the claim to have retained title further. "Completing a successful inventory of stock will be much easier for those suppliers who have marked their goods permanently by etching on packaging or the goods themselves or by robust labelling, as suppliers must still prove which goods belong to them to the satisfaction of the administrators."