Case Law Commentary

When a construction contract changes hands, does the right to adjudicate go with it? Nobody had asked an English court that question before. Now they have, and the answer is yes.

The commercial scene

Assignment happens constantly in construction. A developer sells a plot. A funder takes security over a contract. A corporate restructure moves the employer entity. The works go on and nobody thinks twice. Then a payment dispute surfaces, the new party reaches for the adjudication button, and the contractor says: not so fast, you are not the person who signed this contract. That is exactly what happened here.

The facts

The underlying contract was a JCT Minor Works Building Contract 2016 between FK Facades Ltd and Office Depot International (UK) Limited. The contract was assigned, and then assigned again, eventually landing with Paragon Group Ltd. Paragon referred a dispute about culpable delay to adjudication. The adjudicator awarded Paragon approximately £80,500. FK Facades resisted enforcement, arguing that only an original contracting party could invoke the statutory right to adjudicate under the Housing Grants, Construction and Regeneration Act 1996, and that the right had not passed through the assignment chain.

A point worth noting for practitioners: clause 7.1 of the JCT Minor Works form requires the contractor's consent before assignment by the employer. The judgment does not address whether such consent was obtained at each stage of the assignment chain from Office Depot through to Paragon. If assignment was made without consent, the validity of the entire chain, and therefore the adjudication right, would be open to challenge. Parties relying on assigned contracts should verify that any consent requirements have been satisfied at every link in the chain.

The legal argument

FK Facades had a point, at least on the face of it. The 1996 Act gives the right to adjudicate to "a party to a construction contract." An assignee is not a party in the original sense. The argument ran that the statute is personal to the contracting parties and cannot be inherited. Paragon said the opposite: that a legal assignment under section 136 of the Law of Property Act 1925 transfers all rights, including procedural ones like adjudication, to the assignee as fully as if those rights had always belonged to them.

The judge's reasoning

The judge acknowledged the point was "finely balanced." But working through the JCT contract and the Scheme for Construction Contracts, he concluded that the phrase "a party to a construction contract" is capable of including a legal assignee where assignment has been lawfully made. The statutory right follows the benefit of the contract. It cannot sensibly be read as severing a procedural remedy from the substantive claim it is designed to resolve.

What this means for the industry

Contractors take note. If your employer assigns the contract, your exposure to adjudication referrals does not end. The new party steps into precisely the same position as the original employer, including the right to trigger adjudication at short notice. If you want to restrict this, you need to say so in the contract, either by prohibiting assignment in the first place or by carving adjudication rights out of any permitted assignment. Silence means the right travels with the contract.

A word of caution on the "carve-out" option. Section 108 of the HGCRA 1996 confers a mandatory right to adjudicate that the parties cannot contract out of. Any clause that purports to strip an assignee of the right to adjudicate entirely, rather than restricting the scope of what can be assigned, risks falling foul of that mandatory provision. Drafting an effective restriction requires care: the safer route is to control whether assignment is permitted at all, rather than attempting to sever specific statutory rights from the benefit that passes on assignment.

For assignees and funders taking the benefit of construction contracts, this judgment is reassuring. The payment machinery of the 1996 Act is available to you. You are not left chasing remedies through ordinary litigation while a contractor sits on your money.

An adjudicator's award of £2.1 million has been refused enforcement. The reason was not procedural error or a breach of natural justice. The reason was simpler and more troubling: the employer says the contract never existed.

The commercial scene

The adjudication regime operates on the principle of pay now, argue later. It is fast, it is cheap by litigation standards, and it is meant to be difficult to resist. Courts enforce awards in the vast majority of cases. But that principle assumes there is a contract. Pull that thread, and the whole structure unravels.

The facts

High Tech Construction Ltd carried out works on a residential development in North West London. It claimed monies owed and referred the dispute to adjudication under a JCT Design and Build Sub-Contract allegedly signed in January 2023. The adjudicator found in its favour to the tune of £2.1 million. WLP Trading and Marketing Ltd refused to pay and resisted enforcement on two grounds. First, that the contract relied upon by the adjudicator had never in fact been agreed. Second, that the award had been procured by fraud.

The legal argument

WLP's primary case was existential: the adjudicator derived his jurisdiction from a document that WLP said it had not signed and did not recognise as binding. High Tech said the contract was genuine and the award should be enforced in the usual way. On fraud, WLP said the circumstances in which the alleged contract came into existence, and in which the adjudication was conducted, were suspicious enough to warrant the court's refusal to lend its authority to enforcement.

The judge's reasoning

The court drew the line that matters here: there is a difference between a dispute about what a contract means and a dispute about whether a contract exists at all. Where an employer has a real prospect at trial of showing that the foundational contract never existed, the adjudicator's jurisdiction is in genuine doubt. The judge applied Pegram Shopfitters v Tally Weijl (UK) Ltd and held that summary enforcement is not appropriate where that genuine doubt exists. On fraud, the court said clear and unambiguous evidence is required; suspicion, even strong suspicion, is not enough.

What this means for the industry

This case is a warning against informal contracting. If your contract is not properly executed, signed, and confirmed in writing before works start, you are exposed. Not just to disputes about its terms, but to disputes about whether it exists at all. An adjudicator appointed under a contested document is building on sand. Their award may follow suit. Get your contracts signed. Do it before work starts. Keep the executed copy somewhere you can find it.

A developer and 75 of its associated companies have been held jointly and severally liable for fire safety remediation costs of £13.2 million. The Upper Tribunal found no reason why the corporate structure should stand between the group and the bill.

The commercial scene

Since the Building Safety Act 2022 came into force, a question has hung over the industry: can a developer use a corporate group structure to dilute or deflect a Remediation Contribution Order? The answer, for the first time at Upper Tribunal level, is no.

The facts

Vista Towers in Stevenage was acquired in 2018 by Grey GR Limited Partnership. After the purchase, Grey discovered significant fire safety defects in the building. The original developer was Edgewater (Stevenage) Ltd. The First-tier Tribunal made a Remediation Contribution Order of over £13.2 million jointly and severally against Edgewater and 75 related group entities under section 124 of the Building Safety Act 2022. The group appealed on four grounds.

The legal argument

Edgewater argued that a joint and several order against multiple respondents exceeded the tribunal's jurisdiction. It argued that the just and equitable test in section 124 required consideration of whether each entity had actually participated in or profited from the original development. It challenged the risk standard applied, contending that the threshold should be "intolerable" under PAS 9980 rather than any risk of harm. It also argued that the cost of full wall replacement was disproportionate.

The judge's reasoning

The Upper Tribunal rejected all four grounds. On jurisdiction, it confirmed that nothing in section 124 prevents a joint and several order against multiple respondents. On just and equitable, it held that the question is not whether a respondent personally built the defects or profited from them, but whether, having regard to all the circumstances, it is fair to require that party to contribute. On risk, it read section 120 of the Act as requiring only that a risk to occupant safety exists. There is no minimum threshold. On costs, urgency and expediency can justify a remediation approach that experts might consider disproportionate in other circumstances.

What this means for the industry

Developers, investors, and group holding entities need to take this judgment seriously. The Building Safety Act does not require the tribunal to trace liability back to the specific entity that poured the concrete. Any associated company within a group can be captured by an RCO if the tribunal considers it just and equitable to do so. The absence of a minimum risk threshold makes the scope for orders wide. Entities that thought they were insulated by their position in a group structure should take legal advice now.

The Privy Council has reversed a £1.5 million award and reminded the construction industry that the 28-day notice requirement under FIDIC clause 20.1 is not a recommendation. It is a condition precedent. Miss it and the claim is gone.

The commercial scene

FIDIC contracts are used across the world, and on virtually every project that uses them, contractors push the boundaries of what constitutes a variation. The temptation is understandable. Works turn out to be more difficult than expected, the contract price is fixed, and someone has to carry the loss. The question is always who. In this case, the Privy Council's answer was: the contractor.

The facts

Uniform Building Contractors Ltd (UBC) was appointed under an amended FIDIC Yellow Book 1999 to install approximately 28 kilometres of pipeline across two work packages for a combined lump sum of around £3 million. Four categories of work became disputed: pipe relocation, backfill removal and importation, additional backfill, and night working. UBC said these were variations instructed by the Engineer. The Water and Sewerage Authority said they fell within the contract price. The Court of Appeal of Trinidad and Tobago had sided with UBC. The Privy Council disagreed.

The legal argument

UBC argued the disputed items fell outside the scope of the original works and should therefore attract additional payment. It said the Engineer had instructed the variation works through oral communications and on-site conduct. Where notice had not been given within 28 days as clause 20.1 required, UBC argued this had been waived by the Engineer's conduct, or that estoppel prevented the Authority from relying on the time bar.

The judge's reasoning

The Privy Council was not persuaded on any of these grounds. It read the contract as a whole, including the Employer's Requirements and Bills of Quantities, and found that a contractor tendering on a lump sum design-and-build basis must be taken to have priced all foreseeable risks. Each disputed item fell within that scope. On clause 20.1, the Board reaffirmed that the 28-day notice is a condition precedent to entitlement. Non-compliance extinguishes the right to additional time and money, not merely the right to late payment. On waiver and estoppel: the Engineer has no authority to waive the employer's contractual rights. Any effective waiver must come directly from the employer. Arguments raised for the first time on appeal were rejected entirely.

What this means for the industry

Four principles apply to every FIDIC project from this judgment forward. Read the whole contract before forming a view on scope. Do not assume a disputed item is a variation until the contract documents, taken together, confirm it is not priced in. Serve your clause 20.1 notice within 28 days of the event giving rise to the claim, every time, without exception. The Engineer cannot let you off. And do not raise new legal arguments on appeal. The court will not be interested.

Prospective and retrospective delay: the Akenhead analysis

The question of when the 28-day clock starts running was considered by Akenhead J in Obrascon Huarte Lain SA v Her Majesty's Attorney General for Gibraltar [2014] EWHC 1028 (TCC). Akenhead held that an extension of time can be claimed either when it is clear that there will be delay (a prospective claim) or when the delay has already begun to be incurred (a retrospective claim). The wording of clause 20.1, he noted, does not require the contractor to identify the delay at the earliest possible moment. The clause is "not to be construed strictly against the Contractor" given its serious effect on what could otherwise be good claims.

Akenhead placed the burden on the employer to establish that notice was not given in time. That approach gave contractors some comfort: a broadly construed notice window, with the benefit of the doubt falling on the side of the party giving notice rather than the party relying on the time bar.

The Panther case: a stricter view from the DIFC

A different approach emerged from the DIFC Court of Appeal in Panther Real Estate Development LLC v Modern Executive Systems Contracting LLC [2022] DIFC CA 016 (decided 12 May 2023). In that case, the employer was responsible for 304 of the 325 days of delay. The contractor had failed to submit timely notices under clause 20.1. The Court of Appeal held that the 28-day notice requirement was a strict condition precedent. The contractor lost its entitlement to an extension of time, and became liable for liquidated damages, despite the employer causing the overwhelming majority of the delay.

The Panther decision does not represent the law of England and Wales. It was decided under DIFC law and is not binding on the English courts. But it is frequently cited in international arbitrations, and it signals a harder line on notice compliance than the Akenhead approach would suggest. Contractors working under FIDIC on international projects should not assume that the English courts' more generous construction of clause 20.1 will apply in every jurisdiction. The safest course is the one the Privy Council confirmed in the present case: serve your notice within 28 days, every time, without exception.

A subcontractor tried to pick apart an adjudicator's valuation by pointing to the word "arbitrary" in the award. The court was not impressed. It pointed out that an adjudicator working to tight time limits is not required to produce a forensic audit. They are required to produce a decision.

The commercial scene

True-value adjudications require an adjudicator to work out, in 28 days, what the correct value of interim works actually is. That is a lot to ask. The adjudicator will not have the time or the information to price every line in fine detail. Some approximation is inevitable. Losing parties have repeatedly tried to use that approximation as a hook to defeat enforcement. Courts have repeatedly declined the invitation.

The facts

Project One London Ltd obtained an adjudicator's award in a true-value determination and sought enforcement. VMA Services resisted enforcement on three grounds: that the adjudicator had inappropriately reduced the value of air conditioning works; that he had ignored undisputed evidence relating to cold water tanks; and that his reductions to three items (sanitaryware, domestic water services, and heating pipework) were wholly arbitrary.

The legal argument

VMA's case was that the adjudicator's acknowledgment of arbitrariness in his reductions was an admission of procedural failure, and that his failure to address the cold water tanks evidence amounted to a breach of natural justice going to the heart of the decision. Project One said none of this reached the threshold required to resist enforcement, and that the court should enforce in the ordinary way.

The judge's reasoning

The court applied the well-established tests from Roe Brickwork v Wates Construction and Carillion Construction v Devonport Royal Dockyard. A breach of natural justice will only defeat enforcement if it is material and goes to the heart of the dispute. The word "arbitrary" in the adjudicator's reasoning did not mean capricious or without basis. It meant he was making a best estimate under time pressure with imperfect information. That is exactly what the regime requires. The judge described VMA's challenge as "a classic case of a losing party combing through the adjudicator's reasons."

What this means for the industry

Resisting enforcement on natural justice grounds is difficult for good reason. The adjudication regime would be meaningless if every losing party could buy themselves a stay of payment by finding fault with the adjudicator's arithmetic. Courts will look for the substance of the challenge. Approximation in a valuation is not substance. Neither is a word choice in the award. To defeat enforcement, you need to show that the breach materially affected the outcome of the core dispute. Minor errors in evaluation will not do it.

The building industry has held its unwanted record. For the fourth consecutive year, construction accounted for more corporate insolvencies than any other UK sector. The Insolvency Service figures for January 2026 put the industry at 17 per cent of all corporate failures in 2025.

In absolute terms, 3,728 construction businesses failed in 2025. That is down from 4,032 in 2024, which suggests some improvement at the margins. But the industry's share of total insolvencies has not shifted. It sits, year after year, at the top of the table. Retail follows at 16 per cent. Hospitality at 14 per cent. Construction leads them both.

The reasons are not difficult to identify. Many contracts signed before the inflationary surge of 2022 and 2023 were fixed-price arrangements. The contractor absorbed the cost increases that followed. Materials costs have remained elevated. Labour is expensive and, in some specialisms, hard to source. On top of all of this, the Building Safety Act 2022 has introduced remediation obligations that neither the contracting parties nor their insurers fully priced in at tender stage.

Smaller contractors and specialist subcontractors sit at the sharpest edge of this. They have the least capacity to absorb late payment, the least leverage to renegotiate mid-contract, and the most exposure when a main contractor upstream runs into trouble. The insolvency of one tier propagates quickly through the chain below it.

The statutory adjudication regime under the Housing Grants, Construction and Regeneration Act 1996 was designed in part to address exactly this: get the money moving, keep the chain solvent, resolve payment disputes before they become terminal. It remains the fastest and cheapest mechanism available. Whether contractors use it early enough is a different question.

From 1 April 2026, contracting authorities across the public sector must publish details of every payment above £30,000 made under a public contract. Section 70 of the Procurement Act 2023 comes into force on that date and there are no extensions on offer.

The Government Commercial Function has published its guidance. The draft Procurement (Amendment) Regulations 2026 are making their way through Parliament. The practical question for anyone working on public sector construction contracts is: what changes and how quickly?

Every qualifying payment must be uploaded to a central digital platform with prescribed information about the transaction. Redaction of supplier details is permitted only in limited circumstances. National security is the primary qualifying ground. Commercial sensitivity is not. The guidance also sets out how payments are to be valued for reporting purposes and what happens when a single payment spans more than one contract.

For contractors on public frameworks, the transparency element cuts both ways. It creates visible pressure on contracting authorities to process payments promptly, because delays will appear in the published data. But it also puts a spotlight on contractors in receipt of public money. Disputed payments and set-off decisions will be visible. That changes the negotiating dynamic.

The Procurement Act 2023 represents the most substantial overhaul of public procurement law since the UK departed the EU. Section 70 is one of its more practical consequences. It does not require contractors to do anything directly, but it creates an environment in which the payment record of a public contract is no longer a private matter between the parties. That has implications for commercial strategy, for dispute management, and for the reputational stakes of getting payment decisions wrong.