Lawyers acting for six ISG subcontractors have threatened the Ministry of Justice (MoJ) with legal action over unpaid money they say is owed on former ISG prison projects.<\/p>\n
Hill Dickinson is representing a group of subcontractors who say they were left out of pocket on three project bank accounts (PBAs) in operation at HMP Birmingham, HMP Liverpool and HMP Guys Marsh.<\/p>\n
On 11 August, the law firm sent a pre-action letter to the department on behalf of six firms, demanding payment of unpaid money that was expected in August last year \u2013 the month before ISG\u2019s collapse.<\/p>\n
Hill Dickinson partner Kate Kenneally, who is working on the case, said: \u201cAs the ultimate client and a party to the PBA Trust Deed, the MoJ is contractually obliged to ensure these payments are made. The failure to do so constitutes a breach of both the PBA and the associated contractual framework.\u201d<\/p>\n
A PBA is a ringfenced bank account from which payments are made directly and simultaneously to a lead contractor and members of the supply chain.<\/p>\n
A 2012 guide to PBAs by the Cabinet Office \u2013 in place at the time that the contracts were signed, but since withdrawn \u2013 is clear: PBAs are \u201cintended to allow payment to named suppliers to continue in the event of the insolvency of the contractor\u201d.<\/p>\n
The firms say they had expected to receive money for work \u2013 signed off by quantity surveyors \u2013 that was carried out in the months running up to ISG\u2019s collapse.<\/p>\n