Financial innovator initiates groundbreaking legal battle against the British Government
In the construction sector, concerns have been raised about the widespread misuse of insolvency laws and intent to defraud subcontractors. Louise Stewart, the founder of ProjectPay, has accused governments of failing to protect subcontractors, as funds due to them have been transferred to insolvency administrators rather than the supply chain.
Stewart founded London-based ProjectPay after both the UK and Australian governments abandoned plans to adopt US-style laws that prevent insolvency administrators from seizing subcontractor payments. The platform, already being used on public projects in the UK, Australia, and the US, is backed by Innovate UK funding and major banks.
ProjectBank Accounts (PBAs) were promised to protect subcontractors, but Stewart claims that money intended for them has been diverted into insolvency estates. In some cases, she alleges that the funds are being used for unrelated purposes or personal enrichment.
Iain McIlwee, CEO of the Finishes and Interiors Sector, has spoken out about the failings of the governments in protecting subcontractors. McIlwee stated that subcontractors have been shouldering more than their share of the burden when contractors collapse. He believes that reforms are urgently needed to provide genuine protection for subcontractors.
Subcontractors in the UK and Australia are preparing class actions against their governments for being misled about payment protections. The current legal actions against the UK and Australian governments could expand to cover all subcontractors, not just those on Ministry of Justice or government projects.
Louise Stewart founded the organization "Fair Payment for Subcontractors," which announced reforms to improve payment protection for subcontractors. The reforms include enhanced transparency in payment processes, stricter enforcement of timely payments, and establishment of dispute resolution mechanisms to ensure subcontractors receive due payments promptly.
The collapse of ISG in the UK (2024) and Pindan in Western Australia (2021) left over £1.1 billion and unpaid debts, respectively. These incidents highlight the urgent need for change in the construction sector's payment practices.
In an unrelated development, Pets at Home CEO has stepped down, and the company has issued a profit warning.
Read also:
- International powers, including France, Germany, and the UK, advocate for the reinstatement of sanctions against Iran.
- Companies urged to combat employee resignation crisis, as per findings from the Addeco Group
- Republicans advocate Trump's domestic policy plans in Iowa, though some business owners remain skeptic
- Procedure for Granting the Contract Has Been Instigated by the Commission
