Assignment and adjudication: The TCC closes the gap

The Technology and Construction Court ("TCC") held that Paragon did have the right to adjudicate. In effect, the TCC treated assignment not as administrative convenience but as a mechanism that carries full enforcement capability. The result is that assignment in construction now looks a lot closer, in substance, to a quasi‑novation of remedies.

Background

The dispute arose out of an amended JCT Minor Works Contract 2016 (the "contract”) for remedial works to the roof installation at a commercial property in Greater Manchester. Under the contract, Office Depot International (UK) Ltd (“ODI”) was defined as the employer, with FK Facades defined as the contractor. These defined terms, together with “party” and “parties”, were used consistently throughout the contract. In 2021, ODI assigned the benefit of the contract to OT Group Ltd (“OTG”), and in 2024 OTG assigned the benefit of the contract to Paragon. Both assignments were properly notified to FK Facades.

Relevant contractual terms that were considered by the TCC were:

• Article 6 of the contract:“[I]f any dispute or difference arises under this Contract either Party may refer it to adjudication in accordance with clause 7.2”
• Clause 7.2 then provided that the scheme shall apply to any such adjudication
• Clause 3.1 of the contract, as amended, allowed the employer to assign the benefit of the contract at any time without the contractor’s consent

Following a dispute between Paragon and FK Facades, Paragon terminated the contract and commenced an adjudication seeking liquidated damages for delay together with interest. The adjudicator subsequently issued a decision in Paragon’s favour but FK Facades refused to pay. FK Facades asserted that the adjudicator lacked the jurisdiction required to make a decision as Paragon, an assignee and not a "party" to the contract, had no standing to adjudicate under the contract or the scheme.

Decision

The TCC disagreed with FK Facades position and held that an assignee can refer a dispute to adjudication under a construction contract where the benefit of that contract has been validly assigned under s.136 Law of Property Act 1925 (e.g. in writing, absolute and notice given). The adjudicator therefore did have jurisdiction to determine the dispute referred by Paragon and summary judgment was granted enforcing the adjudicator's award.

Some of the key reasons for the TCC's decision were as follows:

1. Effect of statutory assignment. A valid statutory assignment under section 136 of the Law of Property Act 1925 transfers the legal right to the claim, and all legal and other remedies associated with that claim which would include enforcement rights (absent express provision to the contrary). The assignee is treated as if the assigned rights “had been theirs from the beginning.”
2. Assignment vs novation. Assignment does not make the assignee a “party” to the contract in the full sense (that requires novation), but assignment does give the assignee the right to enforce all assigned benefits, including the contractual right to adjudicate a dispute concerning those benefits. There was no express clause in the contract prohibiting an assignee from adjudicating.
3. Interpretation of “party". Although the scheme uses the term “party to a construction contract,” the TCC held this can reasonably be interpreted as including "a party or any legal assignee of such party, where applicable.” The drafting of the scheme also uses “party,” “party to the contract,” and “party to the dispute” interchangeably.
4. Commercial reality. Preventing an assignee from adjudicating would create significant practical difficulties. Allowing adjudication by assignees aligns with commercial realities, especially where contracts allow assignment.

Impact

First and foremost, this decision by the TCC filled a doctrinal gap as before this case there was no direct authority on whether adjudication rights pass to an assignee, a surprising omission given the sheer volume of adjudication case law.

The TCC’s interpretation is practical in its approach, because it treats “party” in the scheme not as a fixed label tied to whoever originally signed the contract, but as a practical term that should be understood in light of how the contract operates and the commercial realities of assignment. The TCC made clear that a statutory assignment transfers both the legal right to the underlying claim and the legal remedies needed to enforce that claim, which includes the right to adjudicate, even though the assignee does not become a party to the original contract like they effectively would had the contract been novated. Where the right goes, the remedy goes too, and the TCC was prepared to interpret the scheme flexibly to reach a commercially sensible result.

Even though novation looks like the “cleaner” way to transfer a construction contract, it requires consent from all parties, including the contractor, and on a live programme this can delay critical path activities, cause procurement gaps, freeze payment flow until documents are signed, risk jeopardising funding drawdowns etc. Assignment avoids this by allowing the employer to transfer its benefit under the contract immediately without pausing the project or involving the contractor. This is why JCT contracts (including the one in Paragon) expressly allow free assignment by the employer.

Crucially, this judgment provides the commercial certainty the market needs (even if it did not realise it). Funders, purchasers, and incoming project SPVs must be able to rely on the assumption that adjudication rights travel with the assigned contract. The alternative, having to debate every time a contract is assigned, whether the right to adjudicate has also passed, would be unworkable.

Had adjudication rights not passed with assignments, assignees would have been trapped in enforcement dead‑ends, with their only recourse being litigation, notoriously slower and more expensive than adjudication. On a live project, waiting a year or more for cashflow decisions simply is not workable. Adjudication keeps the project moving; litigation can freeze it. The Paragon case avoids that outcome and confirms that assignees retain adjudication speed and tactical leverage.

While the TCC was clear on what has long been known, that assignment is not novation, by enabling assignees to use the same dispute‑resolution machinery as with a novation, it effectively aligns their enforcement position with that of an original employer. That convergence is new. It elevates assignment from a paperwork step to a strategic tool in risk and recovery.

Final word

Paragon doesn’t just resolve who can adjudicate, it reframes the very role of assignment in construction disputes. Recognising the issue’s significance and the finely balanced arguments on both sides, the Judge granted FK Facades permission to appeal to the Court of Appeal. With no prior authority on the point, the next chapter is likely to be decisive. Watch this space.