between the parties in contract. There is no current requirement for retention monies to be ring-fenced (kept separately to general company funds and preserved from spending) and they are usually held in a client's or contractor's main bank account. This can cause problems in cases of insolvency, where the money can be lost and payments owed to the supply chain put at risk. The use of retentions (which are considered a form of stage payments) can also render construction companies unsuitable for factoring (the sale of accounts receivable). UK History The practice of retentions has its origins in the British Railway Mania of the 1840s. This period saw a rapid increase in the number of contractors, often with little experience of the industry. There was a rise in the number of insolvencies and a drop in workmanship standards. Railway companies therefore began withholding a minimum of 20% of payments to contractors as a security against incomplete and defective works. This practice had spread across the industry by the mid-19th century. The 1994 Latham Report recommended that legislation be introduced to protect retention monies held by a party, which would prevent it being lost during a liquidation. Despite all of Latham's other payment recommendations being incorporated into the Construction Act 1998 this one was omitted. The practice was reformed somewhat by the Construction Act 2011. This made it illegal for the release of retention under one contract to be linked to that of a second. This ended the practice whereby contractors would refuse to release retention to sub-contractors until they had been paid it themselves by the client, over which the sub-contractor had no influence. The 2018 collapse of contractor Carillion had a dramatic effect on the industry. Many of its sub-contractors lost large sums of money as £250 million in unpaid retention was lost when the business went into liquidation. Proposed replacement There is limited use of alternatives to retention in the British construction industry. However, there have been recent movements to try to effect change. The Department for Business, Energy and Industrial Strategy (DBEIS) commissioned research into the matter to determine the extent of the use of the practice and its effects on the industry and economy. This was published in 2017 and also identified a number of alternatives to the practice. A DBEIS public consultation was subsequently launched; this closed on 19 January 2018 but no recommendations were