Expert Witness Journal Issue 67 June/July 2026 - Flipbook - Page 109
court also noted that while the rights and bene昀椀ts
under a contract can be assigned, the assignee does
not become a party to the contract (and therefore
become subject to the obligations of the original
party) which would instead require novation.
Key takeaways
While the decision in each case will, to an extent,
rely on its own particular facts and circumstances,
the contract used in this case is of a standard type
within the construction industry and the wording
of the assignment was similarly common. The main
questions in this case turned upon the interpretation
of the wording of the Scheme which is also in
common use as the default adjudication procedure
for referring disputes. Therefore, this decision has
potentially wide application across the construction
industry where a construction contract has been
assigned by an original party to an assignee.
However, the judge commented that while, “in
strict legal analysis” an assignee does not become
a “party” to the original contract, the legal rights
and other remedies are transferred to the assignee
as if they had been theirs from the beginning “and
which would thus in my judgment – absent express
provision to the contrary – include the right to
adjudicate” unless such rights were expressly
excluded.
Under this decision, an assignee of a construction
contract has the right to refer a dispute to
adjudication, whether such right is speci昀椀ed in the
contract and/or is implied by the Construction Act
and/or the Scheme.
FK also raised some practical objections to the
assignee being given the right to adjudicate, along
the lines that 1) FK could not bring a counterclaim
against Paragon as the assignee, as Paragon has
none of the obligations or burden of the contract 2)
there would be an issue over whether the 昀椀ndings
made between Paragon and FK would be binding
against a future adjudicator if FK then were to bring
its ‘counterclaim’ adjudication against the original
employer party and 3) adjudication is con昀椀dential so
there would be a di昀케culty in sharing the outcome
with the original contracting party and/or using
that against the original contracting party in a
future adjudication by FK.
If a party wishes to avoid this result, then it would
need to insert into the underlying construction
contract either the right to object to an assignment
or to agree the wording of an assignment (e.g. an
assignment can only be made with prior consent)
or to specify that the right to refer a dispute to
adjudication does not form part of any assignment
and is expressly excluded.
However, we understand that the court has granted
FK permission to appeal the judgement to the
Court of Appeal, on the basis that the arguments
were 昀椀nely balanced and there is no existing direct
authority on this point. So, while the TCC’s decision
stands for the time being, this could be subject to
change on appeal. Ultimately, if a party is really
concerned by this issue, the most practical action
would be to expressly exclude the right to adjudicate
from any future assignment (if the construction
contract allows them to do so).
In response, the judge pointed out that adjudication
does not usually a昀昀ord the right to bring a
counterclaim anyway, but in any event, FK could
rely in defence upon all equities which it could have
relied if the claim had been brought by the original
party and the con昀椀dentiality argument was not
a compelling reason not to allow an assignee to
adjudicate. In practical terms, the court suggested
that any contracting party concerned by this risk
could stipulate for any assignment to require
consent and/or speci昀椀cally exclude the assignment
of adjudication rights.
Balanced against FK’s practical objections, the judge
also noted the practical di昀케culties and delay that
would arise if an assignee were forced to attempt to
persuade the assignor (as the original contracting
party) to lend its name to an adjudication by the
assignee against the other party.
Ultimately, the judge confessed that the point was
昀椀nely balanced but was ultimately satis昀椀ed that on
the basis of objective contractual interpretation, an
assignee can adjudicate against the other original
party to the construction contract. Therefore,
the court found that the adjudicator in this case
had jurisdiction to decide the dispute and the
adjudication award was enforced by way of summary
judgement.
EXPERT WITNESS JOURNAL
107
JUNE 2026
