ISG subcontractor loses £486k project bank account claim
Summary
The High Court has dismissed a subcontractor’s claim for nearly £500,000 against Vale of Glamorgan Council arising from payments on a school extension project that was supposed to use a project bank account (PBA). The judge found the subcontractor had never become a named supplier under the PBA arrangements, and that the council was not in breach by paying ISG directly when no PBA had been established.
Why it matters
The case highlights the limits of PBA protection where the account is not properly set up and subcontractors are not formally added as named suppliers. For surveyors involved in contract administration, payment certification or project oversight, it underlines the importance of checking that payment mechanisms are actually in place and documented.
Key points
- E&TL Jones sought £486,017.67 from the council after ISG failed to pass on certified payment.
- The court held E&TL had no enforceable rights under the PBA because it was never a named supplier.
- ISG had not established the PBA with Santander before entering administration.
- The judge said the council was not in breach by making direct payments to ISG in the absence of a PBA.
- The ruling turns on contractual status, third-party rights and the practical failure to implement the payment structure.
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