Payments Pro Ltd & Ors v Freelancer and Contractor Services Association Ltd
| Court | High Court of Justice, Chancery Division, Business and Property Courts of England and Wales, Business List |
| Judge | Deputy Master Valentine |
| Judgment | 24 September 2026 |
| Hearing | 13 August 2026 |
| Jurisdiction | England and Wales |
| Claimants | Payments Pro Ltd, Numbermill Ltd, Clarity Umbrella Ltd and I4 Pay Partners Ltd, umbrella employers under common ownership and members of the defendant |
| Defendant | Freelancer and Contractor Services Association Ltd, a company limited by guarantee operating as a trade association and voluntary accreditation body for the professional resourcing sector |
| Application | Claimants' application of 8 April 2026 for summary judgment on the membership issue, alternatively strike out of the defence |
| Case reference | BL-2025-001538 |
Summary
Four umbrella employers held accreditation with a trade association. On their evidence, 70 to 75 per cent of their clients will contract only with member companies. In November 2025 the association terminated all four memberships. The companies applied for summary judgment on whether it had the power.
The application was dismissed on every ground. The court decided nothing about whether the terminations were valid, refused the association's invitation to strike out the claim, and recorded that no concluded view has been reached either way.
Background and facts
The association is a company limited by guarantee, incorporated on 17 June 2008, with articles adopted by special resolution on 20 September 2023. The four claimant companies are under common ownership and joined between 2017 and 2023.
A member's obligations sit across a stack of documents: the articles, a charter, a code of compliance made up of eight documents, annual terms and conditions, additional terms for members using a special purpose vehicle model, a disciplinary process, and a complaints procedure.
In 2023 and 2024 the first claimant moved to a structure in which one company contracts with the client and the worker while a subsidiary is registered with the revenue as the employer. The association investigated whether that breached its code, then negotiated separate terms for the model, signed by three of the claimants in January 2025.
On 1 August 2025 the association alleged breaches of those terms by two of the companies and allowed 21 business days to rectify. On 27 November 2025 it terminated all four memberships: two under section 12.3 of the additional terms, which permits withdrawal at the association's sole discretion if a notified breach is not rectified, and two under a clause reaching other companies in the same group.
The issue
The companies said the association had no power to terminate on that basis at all, or none without following its disciplinary procedure or complying with a duty of the kind described in Braganza v BP Shipping Ltd. They put it four ways: the power must live in the registered articles and does not; the contractual stack required the disciplinary procedure; the discretion carried a Braganza duty which was not discharged; and the January 2025 emails founded rectification or estoppel by convention.
The association answered that its power is contractual, that section 12.3 displaces any general disciplinary process, and that these questions need a trial.
The decision
The companies had to show the association had no real prospect of defending. They did not.
Article 2.5 provides that membership ceases on termination as per the terms and conditions of membership. The companies argued that a termination right must be set out wholly in the registered articles and cannot incorporate outside material. The court found the argument reasonable but unsupported by the authorities cited.
The Companies Act does not say in terms that any power of termination of membership of a company limited by guarantee must be set out in the Articles.Deputy Master Valentine, paragraph 27
It is not for me to decide these questions.Deputy Master Valentine, paragraph 32
On construction of the stack, the court had the contracts and heard both sides, and still declined to decide. The drafting lacks clarity in places, the same documents raise interpretation questions heading for trial, and the interaction between the procedures was not fully argued.
On Braganza, the application failed on the material, not on the doctrine. The court had very little information about how the decision to terminate was reached, and refused to draw an adverse inference from the absence of internal documents, because the association's position is that it owes no duty to explain its reasoning.
I cannot infer anything further from the absence of internal documentation.Deputy Master Valentine, paragraph 45
That disposed of the ground by itself. Separately, the court said it could not hold either way whether the duty arises, the law on when such a term is implied being still in motion, and the disputed question of whether the association is a quasi regulator of its members not being ripe for decision.
I should emphasise that nothing in the foregoing analysis amounts to a determination that a Braganza duty does or does not apply in the present case.Deputy Master Valentine, paragraph 51
The January 2025 exchange that produced the clause tying the two sets of terms together was read differently by each side.
The email correspondence is capable of bearing more than one interpretation and the parties advance materially different accounts of what was understood by the language used.Deputy Master Valentine, paragraph 59
The application was dismissed. The association had made no cross application and asked the court to strike out the membership claim of its own motion. That was refused: losing summarily does not make a claim hopeless.
Practical implications
Accreditation is trading oxygen in parts of the construction supply chain. Approved lists, framework places and payroll kitemarks work the same way, with a private body holding a power that can switch off most of a business overnight. The claimants say their revenue fell at once, and still could not get the point decided without a trial.
The reason is the drafting. Rights were spread across seven kinds of document written at different times, and a specific clause with its own cure period sat awkwardly beside a general disciplinary process. A court asked to untangle that sends it to trial.
The Braganza point is left open for anyone relying on, or attacking, an unqualified right to terminate. The older line that such a right escapes the duty is now doubted.
Practice points
- Read the whole stack before relying on one document. Here the rights sat across articles, a charter, an eight document code, annual terms and conditions, additional terms, a disciplinary process and a complaints procedure.
- The association's case that a specific clause with its own cure period displaces a general disciplinary process was described as submitted with some force, and was not decided. If the disciplinary process is meant to apply, write that into the specific clause.
- Do not assume a membership body must put its termination power in its registered articles. A cross reference to terms and conditions was at least arguable here, and the point remains open.
- Check the group provision before restructuring. A clause reaching other companies in the same group ended the membership of two companies terminated on that basis alone.
- The court drew no inference from the association's silence, because its case is that it owes no duty to explain its reasoning. A body without that position, faced with the same silence, is exposed.
- Do not expect a court to decide a construction point summarily when it is entangled with issues heading for trial, however short the clause looks.
- On a challenge to a discretionary decision, put in evidence about how the decision was made. An application built on what the other side has not disclosed did not carry the burden.