Court confirms an assignee’s right to adjudicate a dispute under a construction contract: Paragon Group v FK Facades

The Technology and Construction Court (TCC) in Paragon Group Ltd v FK Facades Ltd [2026] EWHC 78 (TCC) has determined that an assignee under an amended JCT Minor Works Contract can bring adjudication proceedings against an original contractual counterparty.

Assignments of construction contracts are commonplace. However, before this decision, there was no authority confirming that an assignee could refer a dispute to adjudication. The judgment therefore brings some welcome clarity to assignees of contracts. You can read the full judgment here.

The defendant, FK Facades Ltd (FK), has since been granted permission to appeal. It will be interesting to see whether the Court of Appeal upholds the TCC’s decision, as HHJ Stephen Davies – the TCC Judge – noted the point was “finely balanced”.

However, if a party (subject to the terms of the construction contract) was unable to refer a dispute to adjudication, this would undermine the value of an assignment and the swift operation of adjudication to resolve disputes on an interim but enforceable basis.

Background

The original Employer under the building contract, Office Depot International (UK) Ltd (ODI), engaged FK to complete remedial roofing works at a commercial property in Greater Manchester. The contract was an amended JCT Minor Works Building Contract 2016 dated 17 October 2018 (Contract).

Article 6 and clause 7.2 of the Contract provided that either party could refer a dispute under the Contract to adjudication. The amended clause 3.1 of the Contract permitted the Employer to assign the benefit of the Contract without the Contractor’s consent, but prohibited the Contractor from doing so without the Employer’s prior written consent.

In 2021, ODI assigned the benefit of the Contract to OT Group Ltd, which assigned it to Paragon Group Ltd (Paragon), in 2024. Both assignments were notified to FK. Paragon terminated the Contract in April 2025 and subsequently commenced an adjudication concerning FK’s alleged delays in completing the works and liability for liquidated damages.

FK took various jurisdictional points in the adjudication, one of which was that the adjudicator did not have jurisdiction to determine the dispute because Paragon was not entitled to refer the dispute to adjudication as an assignee.

The adjudicator determined that he had jurisdiction. Further, he:

• awarded Paragon £80,500; and
• directed that FK should pay his fees of £17,787.

FK refused to abide by the adjudicator’s decision. Paragon therefore commenced a claim for summary enforcement of it. FK resisted enforcement, submitting that Paragon, as assignee, could not have referred the dispute to adjudication and, as such, the adjudicator had no jurisdiction to determine the dispute.

What did the Court consider in allowing the assignee to refer the dispute to adjudication?

The Judge noted that section 108 of the Housing Grants, Construction and Regeneration Act 1996 (Act) and paragraph 1(1) of the Scheme for Construction Contracts (Scheme) gives a “party” to a construction contract the right to refer a dispute arising under the contract to adjudication. Both counsel accepted that previous cases addressing the assignment issue were “of marginal assistance”. As such, the Judge approached the issue as one of interpreting the Contract and the Scheme.

In determining that Paragon could, as assignee, refer the dispute to adjudication, HHJ Stephen Davies considered:

• The references to a “party” or “parties” in the Scheme were “essentially neutral” and did not limit the right to adjudication to the original parties to the construction contract. It was not “immediately obvious” that the references to “parties” and “parties to the dispute” were intended to refer solely to a “party to the construction contract”. The Scheme’s various references to “party” could be read as including assignees “without doing violence to the wording of the Scheme”.
•  The right to adjudicate under Article 6 of the Contract must be considered in the context of clause 3.1, which allowed either party to assign the benefit of the Contract.
• Whilst there were “practical complications which would arise if an assignee could adjudicate against an original party”, for example, where the findings made in one adjudication may not bind an assignor, the Judge considered that these complications were “more apparent than real”.
• The confidentiality of the adjudication process was “not … a compelling reason in itself” to not allow an assignee to adjudicate; noting that the Judge did not investigate whether there may be exceptions to adjudication confidentiality between assignors and assignees under other contracts.
• The alternative of finding that an assignee could only adjudicate in the name of the original party would be “potentially fraught with difficulty and delay”. It was unlikely that the parties envisaged an assignee’s rights would be subject to such a significant limitation because of an “unintended drafting consequence” of the Scheme. These difficulties can operate impartially against both the Employer and the Contractor as either could have assigned its interest in the Contract, with the assignee wanting to adjudicate a dispute. Commercial common sense therefore favoured assignees being able to refer a dispute arising under the contract to adjudication.

The adjudicator therefore had jurisdiction to determine the dispute and Paragon was entitled to summary judgment.

Will this decision have broad application to the right of assignees under a construction contract to refer disputes to adjudication?

The terms of the assignment provisions in the Contract were relevant factors in the Court’s determination.

Whilst not featured in the JCT Minor Works Contract, other JCT contracts typically include an optional name borrowing provision (Clause 7.2 – Rights of Enforcement). This gives the employer the right to allow a party who has acquired the freehold interest or taken a leasehold interest in the whole of the premises to commence proceedings in the name of the employer after practical completion. However, interestingly, the optional clause only refers to arbitration or litigation proceedings. This raises the question of whether the Court would reach a different view on interpretation, had the Contract featured this optional clause 7.2. 

The amended assignment provisions seen in this case are more typical of the terms adopted by employers in many construction contracts; with the application of clause 7.2 being less common, so perhaps the decision will still be of broad application. This may lead to the JCT revisiting the drafting of clause 7.2 in subsequent editions.

Should parties to a construction contract amend the terms in light of this decision?

Whilst Paragon succeeded, given the pending appeal, employers may wish to consider expressly providing for whether the right to refer a dispute to adjudication is intended to travel with an assignment. Equally, contractors and subcontractors may wish to consider limiting assignment rights to prevent an assignee being able to refer a dispute to adjudication.