In the recent case of Paragon Group Ltd v FK Facades Ltd [2026] EWHC 78 (TCC), the Technology and Construction Court (TCC) in Manchester held that a party assigned the benefit of a construction contract had the legal right to refer disputes to adjudication, as if they were an original party to the contract.
FK Facades Ltd (FK) was the contractor under a JCT Minor Works Building Contract 2016 (as amended) in relation to remedial roofing works at a commercial premises in Manchester. The employer was Office Depot International (UK) Ltd (ODI).
ODI assigned the benefit of its contract with FK to a third party, namely, OT Group Ltd. Subsequently, OT Group Ltd assigned the benefit to another third party, Paragon Group Ltd (Paragon).
The dispute
Paragon alleged FK had delayed in completing the works and referred the dispute to adjudication. The adjudicator ordered FK to pay liquidated damages and the adjudicator's fees.
Paragon commenced proceedings to enforce the adjudications decision against FK when the latter failed to comply with the adjudicator's order.
During the enforcement proceedings, FK argued that the adjudicator did not have jurisdiction to make the award against it, as Paragon did not have the right to refer the dispute to adjudication as it was not an original party to the contract.
The contract allowed the parties to it to refer any disputes to adjudication, in which case the Scheme for Construction Contracts (England and Wales) Regulations 1998 was to apply to any such adjudication. The contract also allowed the employer to assign the benefit of the contract at any time without requiring the contractor's consent.
FK argued that being assigned the benefit of the contract did not make Paragon a party to the contract and non-parties, did not fall within the scope of the Scheme.
On FK's case, it followed that Paragon had no right to refer the dispute to adjudication and the adjudicator did not therefore have jurisdiction.
Paragon, on the other hand, argued that it had the right to do so as the assignee of 'all of [the employer's] rights, title, interest and benefit in and to' a building contract.
The TCC therefore needed to determine whether or not Paragon, as an assignee, was legally entitled to refer its claim against FK to adjudication.
The TCC noted there was very little in terms of previous decisions on this point, despite assignments being rather commonplace within the industry.
The decision and its effect
The TCC found that references to 'party' in the scheme 'did not have a conscious intention to differentiate between the position of an original contracting party and that of an assignee when referring to a "party to a construction contract".'
The TCC therefore ultimately found in Paragon's favour, deciding that the right to adjudicate passed to Paragon as an assignee of the benefits of the contract, notwithstanding the fact that this did not mean Paragon was a party to the contract.
Despite the commonality of assignments of contracts in the construction industry, there has been very little in the way of case law as to whether or not an assignee can refer a dispute to adjudication as an original contracting party may have done.
This case has therefore provided useful clarity on this point for any party assigned the benefit of a construction contract.
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