Assignment of construction contracts: who has the right to adjudicate?

Adjudication remains one of the construction industry's most effective dispute‑resolution mechanisms. Under section 108(1) of the Housing Grants, Construction and Regeneration Act 1996 (as amended) (“the Construction Act”), any party to a construction contract has the statutory right to refer a dispute to adjudication at any time.

But what happens when rights under a construction contract are assigned? Does the right to adjudicate automatically transfer to the assignee? Until recently, there was no direct authority on this point. The Technology and Construction Court (TCC) addressed the issue for the first time in Paragon Group Ltd v FK Facades [2026] EWHC 78 (TCC).

Background

The dispute arose under an amended JCT Minor Works Building Contract (2016 edition) between FK Facades Ltd (the Contractor) ("FK Facades") and the original Employer. The Employer later assigned its rights under the contract to Paragon Group Ltd ("Paragon").

After delays to the works, Paragon sought to recover liquidated damages and referred a dispute to adjudication. The adjudicator awarded Paragon approximately £80,000 and ordered FK Facades to pay his fees of £18,000.

FK Facades raised a jurisdictional argument within enforcement proceedings asserting that Paragon had no right to refer the dispute to adjudication as it was not an original party to the contract.

The legal issue

The key question for the TCC was:

Does an assignee of contractual rights qualify as a 'party' with the right to adjudicate under section 108 of the Construction Act?

FK Facades argued that:

1. Only the original contracting parties can rely on section 108.

2. Assignment transfers substantive rights (e.g., to claim damages), but not procedural rights (e.g., adjudication), unless expressly provided.

3. Without a novation, the assignee does not become a “party” to the construction contract.

Paragon argued that:

1. A valid statutory assignment transfers the benefit of the entire contract.

2. The right to adjudicate is a remedy linked to enforcing contractual rights.

3. Nothing in the contract or the legislation prevents an assignee from using adjudication.

The decision

The Court was satisfied that on an objective interpretation of the contract in question; an assignee can adjudicate an assigned claim against the original other party. HHJ Davies found that the adjudicator had jurisdiction to decide the dispute which was referred to him by Paragon and FK Facades was entitled to summary judgement as claimed.

This decision provides clarity in circumstances where contractual rights are assigned. If adjudication rights did not automatically transfer, assignees would be left with contractual rights that could only be enforced by litigation or arbitration. That would undermine the 'pay now argue later' philosophy that underpins the Construction Act.

Key Takeaways

• Section 108(1) gives a party the right to refer a dispute to adjudication at any time.

• A valid assignment of contractual rights will generally include the right to adjudicate.

• Novation is not required for an assignee to exercise adjudication rights.

• If parties intend to limit or restrict the right to adjudicate following assignment, this must be expressly drafted.

Need advice?

Our specialist construction disputes and dispute‑avoidance team can assist with all aspects of adjudication. For more information, please contact Dickon Court, Lee Ward, or Chloe Wood.