Financial Statements

Notes to the Company Financial Statementsfor the year to 31 December 2008

17. Contingent liabilities

The Company has, in the normal course of business, given guarantees and entered into counter-indemnities in respect of bonds relating to the Group's own contracts.

Provision is made for the Directors' best estimate of known legal claims and legal actions in progress. The Group takes legal advice as to the likelihood of success of claims and actions and no provision is made where the Directors consider, based on that advice that the action is unlikely to succeed or a sufficiently reliable estimate of the potential obligation cannot be made.

During the year, the Company issued a guarantee in respect of the Taylor Woodrow Group Pension and Life Assurance Fund (TWGP&LAF), a defined benefit pension scheme in which a number of its subsidiary companies participate, and which had a deficit under IAS 19 of £112.6m at 31 December 2008. The guarantee commits the Company to ensure that the participating subsidiaries make deficit repair contributions in accordance with a schedule agreed with the Trustees during the year of £25m per annum for 10 years.