Published: September 18, 2025 at 4:18 pm
Subcontractors in the UK and Australia are preparing landmark class actions against their governments, claiming they were misled by protections that failed to safeguard payments when major contractors collapsed.
The actions are being brought with litigation funders and law firms after the 2024 collapse of ISG in the UK, which left over £1.1 billion in unpaid debts, and the 2021 collapse of Pindan in Western Australia.
These left subcontractors unpaid for completed work, despite assurances that Project Bank Accounts (PBAs) would provide protection.
In both cases, money intended for subcontractors was diverted into insolvency estates.
Louise Stewart, founder of construction FinTech ProjectPay, said: “Subcontractors were promised protection that simply did not exist. PBAs only protect money already in the account. They fail to stop subcontractor payments being captured by insolvency administrators. Small businesses, families and taxpayers have all been let down and misled.”