Recent case update: Paragon Group Ltd v FK Facades Ltd [2026] EWHC 78 (TCC)
A recent Technology and Construction Court decision has provided helpful guidance on an issue that can arise in development, asset and project structures where contractual rights change hands, which is whether the assignee of a construction contract refer a dispute to adjudication?
In Paragon Group v FK Facades, the Court confirmed that the assignee of the benefit of a construction contract could do so. The case concerned an adjudicator’s award obtained by Paragon, which FK Facades challenged on jurisdictional grounds. The Court rejected that challenge and granted summary judgment enforcing the adjudicator’s decision.
Background
The dispute arose under an amended JCT Minor Works Building Contract 2016 relating to remedial works at a commercial property in Greater Manchester. The contract allowed the employer to assign the benefit of the contract without the contractor’s consent. Following two assignments, Paragon became the assignee of the employer’s rights under the contract.
Paragon later terminated the contract, referred a dispute to adjudication and obtained an award in its favour for £80,500 plus the adjudicator’s fees. It then sought to enforce that decision. FK Facades resisted enforcement, arguing that the adjudicator lacked jurisdiction because only an original party to the contract could refer a dispute to adjudication under the Housing Grants, Construction and Regeneration Act 1996 (“the Construction Act”) and the applicable Scheme for Construction Contracts (“the Scheme).
The issue before the Court
The central question was whether the right to adjudicate passed to an assignee together with the assigned contractual benefit.
FK Facades argued that adjudication under the Construction Act and the Scheme was limited to the original contracting parties. Paragon, by contrast, argued that a valid legal assignment transfers not only the benefit of contractual rights but also the legal remedies available to enforce those rights, including adjudication.
What the Court decided
The Court found in Paragon’s favour. It held that the assignee of the benefit of the construction contract was entitled to refer the dispute to adjudication and to enforce the adjudicator’s decision. In reaching that conclusion, the Court considered the specific contract terms which had been amended from the standard wording, the Scheme and the general principles of assignment under section 136 of the Law of Property Act 1925.
The judgment recognised that an assignee does not become an original contracting party in the same way as it would under a novation. However, the Court held that the transfer of the benefit of the contract included the relevant legal remedies, and that the right to adjudicate was capable of passing to the assignee with those rights unless excluded.
The Court was also not persuaded by arguments that allowing an assignee to adjudicate would create practical difficulties. It held that such concerns did not justify reading the adjudication provisions narrowly, and it enforced the adjudicator’s award.
Why this matters
This decision is significant because assignments are common in certain construction and development projects. Rights under building contracts may be transferred as part of sales, refinancing arrangements, development structures or internal group reorganisations. The judgment gives useful support and some certainty to the view that adjudication rights can be passed on with those assigned contractual benefits.
That has real commercial importance. A party taking an assignment may expect not only to inherit claims relating to delay, defects or loss, but also to inherit the ability to pursue those claims quickly through adjudication. Equally, contractors should be aware that the party bringing an adjudication may not always be the original employer named in the contract.
Practical points for parties
There are several practical lessons arising from the decision.
First, parties should review assignment clauses carefully. If the parties want to limit or exclude an assignee from adjudicating, the drafting should say so expressly to provide clarity. If the intention is for such rights to apply, the wording should also be made clear.
Secondly, the distinction between assignment and novation remains important. Assignment may transfer the benefit of rights and remedies, but it does not of itself transfer obligations in the same way as novation.
Thirdly, where an adjudication is commenced by an assignee, the responding party should look closely at the contract wording, the assignment documents and the scope of the rights said to have transferred before taking a jurisdiction point.
Finally, dispute resolution wording should be considered early in projects where a later sale, transfer or restructuring is possible. This is not simply a technical drafting issue. It can affect who is able to use adjudication when a dispute arises.
Conclusion
Paragon v FK Facades is an important recent decision on the relationship between assignment and adjudication. It confirms that, in the absence of contrary wording, the assignee of the benefit of a construction contract may be able to refer a dispute to adjudication and enforce the resulting decision. For employers, contractors, developers and purchasers alike, it is a reminder that assignment provisions and dispute resolution clauses should be read together and considered carefully from the outset.
How CCC can help
CCC supports contractors, subcontractors and employers with the commercial issues that commonly arise on live projects, including payment and valuation, programme, change control and dispute strategy. We focus on clear, practical advice on how contracts operate in practice, helping our clients make informed decisions and manage risk as issues develop.
Where matters progress into dispute, we assist with negotiation, adjudication and other resolution routes, with an emphasis on proportionate outcomes and protecting commercial position.
