A client that accused a defunct specialist contractor of considering lying about personnel working on a “defective” job has agreed to pay a settlement to the firm.
FEL Group, which made and installed infrastructure for data centres, went into administration in June 2022.
A month before, it had issued a High Court claim against broadband infrastructure developer CityFibre for non-payment of £2.4m out of a total bill of £3.7m.
A £1.25m settlement paid by CityFibre to administrators of the FEL Group was agreed late last year, just before the case was due to go to trial, a newly released report from insolvency specialist RSM says.
The dispute centred around installation of eight fibre-optic exchange containers FEL was installing for the client from December 2020. CityFibre terminated the contract in December 2021.
RSM continued the claim, arguing that CityFibre was wrong to terminate the contract.
Legal submissions have been made to the High Court over the past three years, with the client arguing it was owed £2.1m by FEL Group due to defects in work delivered during the period, which forced it to terminate the contract.
Papers lodged in March 2025 alleged that representatives of both companies discussed issues on a Microsoft Teams call in late November 2021.
After they finished speaking, FEL representatives – who thought they were alone on the call – carried on speaking and gave “serious consideration to lying about the identity of the person who worked on one of the containers”, the court papers said.
They also gave “serious consideration” to procuring a certified electrician “who would (or who [their] representatives believed would) ‘fudge’ the testing of the electrical systems in the containers so that [FEL Group] could ‘cheat’ in relation to the works”, the papers alleged.
In April 2025, FEL’s legal representatives denied the allegations and said there was no transcript of the Microsoft Teams call and that the staff on it were not company directors in charge of planning how to rectify issues on the job.
FEL’s lawyers said the containers were being fixed and denied they were so defective that they would not be able to be remediated by their delivery dates.
CityFibre wasted money because of its own decision to “wrongly repudiate” the contract, they argued.
An earlier submission by CityFibre, submitted in 2022, claimed that FEL Group “had deliberately and dishonestly withheld important information, and concealed it from [CityFibre] in respect of the credentials and accreditation of certain employees/persons undertaking work to the containers”.
However, its amended claim dropped this allegation and FEL lawyers did not respond to it in their filings.
RSM’s new report shows that FEL spent just under £5,000 on a solicitor for the legal work in the case, with £12,000 paid to a consultancy for expert witness evidence and £10,000 on data processing and hosting during the legal disclosure process.
Scunthorpe-headquartered FEL Group turned over £5.5m in its accounts for the year ending 31 December 2020. In the year ending 31 December 2017 its revenue was £27m.
At the time of its administration, RSM blamed “protracted negotiations” over the CityFibre contract for causing it significant financial pressure.
A spokesperson added: “After trying to source additional investment and then a sale of the business, the directors recognised the company was unable to avoid insolvency.”
CityFibre declined to comment on the case.
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Ian Weinfass