翰宇国际律师事务所-建筑与工程事务（英国）-2026年春季-Construction and Engineering Matters UK – Spring 2026

LocalConnections.GlobalInfluence.

ConstructionandEngineeringMatters

UK–Spring2026

WelcometothespringeditionofConstructionandEngineeringMatters,whereweprovideyouwithbite-sizedupdatesonUKconstructionandengineeringissues.

Thisspringeditionincludes:

IsLessReallyMore–CanalatePaymentNoticeBeaPayLessNotice

(andOtherCreativeDefences)?VisionConstructLtdvGypcraft

DryliningContractorsLtd 1

HighCourtProvidesGuidanceonWhenaPartyinanUnincorporated

JointVentureCanAdjudicate 4

Adjudication’sExpandingEmpire? 6

Non‑partyCostsOrdersandConstructionLitigationFunding:

LessonsfromThomasBarnes&SonsPLC(inadministration)v

BlackburnwithDarwenBoroughCouncil 8

TheLesserofTwoEvils:FinalityonTerminationProvisions–

ProvidenceBuildingServicesLimited(Respondent)v.Hexagon

HousingAssociationLimited(Appellant) 12

ExpertCorner:TheDarkArtsofDelayAnalysis:Insightsfrom

anIndustryExpert 15

Pleasefeelfreetosharewithyourcontacts–wewelcomefeedbackand

suggestionsforothertopicsthatyouwouldliketoseecoveredinfutureeditions.

Theopinionsexpressedinthisupdatearethoseoftheauthor(s)anddonotreflecttheviewsofthefirm,itsclients,oranyofitsortheirrespectiveaffiliates.Thearticlesinthisupdateareforgeneralinformationpurposesandarenotintendedtobeandshouldnotbetakenaslegaladvice.

©SquirePattonBoggs.AllRightsReserved2026

1

IsLessReallyMore–CanalatePaymentNoticeBeaPayLessNotice(andOtherCreativeDefences)?

VisionConstructLtdvGypcraftDryliningContractorsLtd

TherecentcaseofVisionConstruct

LtdvGypcraftDryliningContractors

Ltd[

2025

]EWHC2707(TCC)isyet

anothercasedealingwithcontracts

thathavepaymentschedulesthatare

laterextendedoutbyoneoftheparties,howdatesaremissedandthelengthsapayingpartywillgotoinordertoavoidmakingpayment.

FactsoftheCase

VisionConstructLtd(VCL)andGypcraftDryliningContractorsLtd(Gypcraft)enteredintoasubcontractdated12November2020.Thiswasonthe2016standardformjointcontractstribunaldesignandbuildsub-contractconditions(JCTDBSub/C),anditalsoincorporatedabespokeschedulethatcoveredtheinterimpaymentdatesandwasdesignedtogiveeffectto

clause4oftheJCT.However,theschedulecoveredtheperiodApril2020-February2021,whileGypcraft’sworkswere

agreedtobebetweenDecember2020-January2021,meaningthattheschedulewasbroadlyredundantbythedateofthesubcontract.

VCLthereforeissuedGypcraftwithupdatedschedulesoffurtherdates,providedasworksprogressed.ThesewereinsimilarformsandusedlanguagethatdidnotentirelyalignwiththeusualJCTlanguage,whichreferstoInterimValuationDatesanddidnotspecificallymentioninterimpaymentapplications:

(i)Sub-contractorsubmissionvaluationdate

(ii)Duedate(sic)

(iii)Accountstoissuepaymentnoticeby

(iv)Paylessnoticetobeissuedby

(v)Finaldateforpayment

Theschedulesdidhoweverincludeafootnotefourthat“allapplicationsforpaymentsandinvoicesaretobeissuedto

[emailaddress]byendofbusinessonthevaluationdateabove”.TheJCTsetouttheusualspecificrequirementsastohowGypcraftcouldissueinterimpaymentapplications,andhowVCLcouldinturnissuepaymentnoticesandpaylessnotices.

Gypcraftissuedaninterimapplicationforpayment#23(IA23)inthesumof£342,385.52,andVCLrespondedafterthepaymentnoticedeadlinewithadocumententitled“PaymentNotice”tosaythattheyinsteadconsideredthesumduetobe£125,437.77,whichwaswhatVCLthenpaid.Theydidnotserveaseparatepaylessnotice.

Thepartieswenttoadjudicationoverthepayment,wheretheadjudicatorfoundinfavourofGypcraftonthebasisthat:

•GypcrafthadservedavalidIA23

•VCLhadfailedtoserveeitheravalidpaymentnoticeorapaylessnoticeasrequired

•IA23waspayableintheamountappliedfor,inaccordancewiths.110B(4)oftheHousingGrants,RegenerationandConstructionAct1996(theConstructionAct1996)

TheClaim

VCLissuedaPart8claimintheTCC,and

submittedthefollowing(asitturnedout,ratherhopefulifnotingenious)cascadingarguments:

•Argumentone–Thesubcontractfailedto

identifyarelevant“interimvaluationdate”forthispaymentcycle(number23),whichmeantthattheSchemeforConstructionContracts1998appliedtomodifyclausefouroftheJCTtofixtherelevantvaluationperiods.Thatin

turnmeantthatGypcraftthereforehadno

righttosubmitanyinterimapplicationatall,

sos.110B(4)oftheConstructionAct1996

couldnot“bite”,andtherewasessentiallynonotifiedsumpayable,oralternativelythattheapplicationhadtobesubmittedontheinterimvaluationdateandnotfourdaysinadvance.

•Argumenttwo–AconventionhadarisenbycourseofconductwhereGypcrafthadacceptedlatepaymentnoticesfromVCL,meaningGypcraftwere“estoppedby

convention”fromacceptingthevalidityofVCL’slatePaymentNotice.

•Argumentthree–EvenifVCL’sresponsetoIA23wasoutoftimeasaPaymentNotice,itwas“neverthelessintimetoserveasaPayLessNotice”.

ThecourtfirstlyheldthataPart8claimwas

usuallyonlyappropriatewherethequestionbeingdecidedonis“unlikelytoinvolveasubstantial

disputeoffact”,andcitedINGBankvRosRocaSA[

2012

]1WLR472,whichheldthatPart8

proceedings“arewhollyunsuitableforthetrialofanissueofestoppel”.Nevertheless,thecourtallowedtheargumentnotingthatitwas“an

unusual(albeitnotimpossible)argumenttoraiseintheevidencefreezoneofPart8”.

HavingregardtotheClaimassetoutintheleft.handcolumn,thecourtdealtwiththevariousargumentsasfollows.

ArgumentOne–TheInterimValuationDatesArgument

Thecourtinitiallyobservedthatthiswasaverytechnicalargumentthatwouldhavehadthepracticaleffectof

preventingthepaymentregimeworkingasboththeConstructionAct1996andthesubcontractitselfhadintended;thiswasnotinlinewithCoulsonLJ’sobservationinBennettConstructionLtd.vCIMCMBSLtd.[

2019

]BLR587that,“theparties[should]adoptbusinesscommonsenseastothearrangementforinvoicingandpayment”.

VCLwereattemptingtorelyonthefactthatthescheduleoutliningtheinterimpaymentdatesusedtheterm“sub-

contractorsubmissionvaluationdate”ratherthan“interimvaluationdate”,butthecourtgavethisshortshriftandheldthatitwouldbe“perverseanduncommercial”toholdthatthepaymentregimecouldnotworkasintendedsimplyonthisbasiswhenitwasclearfromelsewhereinthesubcontractwhatwasmeant(particularlyatfootnotefourofthe

paymentschedule).1

Thecourtfurtherheld,onVCL’sargumentthatthiswouldhaveinturnpreventedGypcraftfromsubmittinganinterimpaymentapplicationbeforethenewdatespecified,thatfootnotefouronitswording,didnotactuallyrequirethisatallgivenitusedthewords“bytheendoftheValuationdateabove”.

Argumentone,inallitslayering,wasthereforerejected.

ArgumentTwo–TheEstoppelbyConventionArgument

Indeterminingthispoint,thecourtreliedontheingredientsofanestoppelbyconventionassetoutinMearsLimitedvShorelineHousingPartnershipLimited[

2015

]EWHC1396(TCC),160ConLR157.Onthis,thecourtheldthattheonlyrepresentationwasthatpreviousnetpaymentswereassetoutintheapplicationitself;thatwasmerelyastatementoffact.Gypcraftdidnotimpliedlyrepresentthattherewerenoothernotified,butinvoicedsumsthathadtobetakenintoaccountwhenassessingmovementinthemonth.TheissueherepresumablybeingthatGypcrafthadnotinvoicedtheamountitappliedforattherelevanttime,soitwaseffectivelytetheredtothisamountgoingforwardsontheir

applications.Thecourtcommentedthatthisseemedtobean“ingeniouslawyer’sglossuponthefacts,ratherthanasharedassumption”.

Itwasalsoheldthattherewasnoevidencethatthepartieshadenteredintoaconventionwherebypaymentnoticeswouldbeacceptedifissuedlatejustbecausethethreeprioroneshadbeen–this,onitsown,“doesnotgiverisetoaconventionwithoutmore”andthat“itisequallyconsistentwithconfusion,inefficiencyoranumberofotherpossibleexplanations”.

Next,thecourtheldthattherewasnoevidenceofreliance(i.e.thatVCLhad“[fallen]intothehabitofissuingtheirPaymentNoticeslatebecausetheyweresubjecttosomesortofconvention”).

ThecourtthereforerejectedVCL’ssecondargument,notingagainthattogointoitfurtherwouldrequireafullinvestigationofthefacts,whichwouldbe“inherentlyunsuitableforaPart8claim”.

2

1that“allapplicationsforpaymentsandinvoicesaretobeissuedto[emailaddress]byendofbusinessontheValuationdateabove”

ArgumentThree–

The“ButItWasReallyaPayLessNotice”Argument

Thecourtnoteditsviewherethatthiswas“anambitioussubmission”.TheevidenceshowedthatVCL’spayment

noticewasreferredtomultipletimes,inboththedocumentitselfandthecoveringemail,asapaymentnotice,and

that“anyotherreadingofthedocumentwouldbeentirelyartificial”,citingthesummaryoftheapproachtocontractualnoticesinAdvanceJVvEniscaLtd[

2022

]EWHC1152(TCC).

ThecourtalsocitedGroveDevelopmentsLimitedvS&T(UK)Limited[

2018

]BLR173inconfirmingthatitwould

“entirelyundermine”theConstructionAct1996,andthesubcontractifadocumentthatwasclearlyintendedtobeapaymentnoticewasretrospectivelyconvertedintoapaylessnotice.

Argumentthreewasthereforealsorejected.

ĸeyTakeaways

Takingthecourt’sviewoneachofVCL’sargumentsinturn,thereareprobablythreekeytakeawaysfromthedecisioninthiscase:

•Firstly,thetimingofnoticesiscrucial,everyoneknowsthisofcoursebut,whiletheseargumentsmightbe

applaudedinonesenseintheircreativity,theywerecalledoutassuchagainstthebackdropofthecontractwordingandtheschedulesgivenbyVCLand,notably,givenshortshriftbythecourt.

•Secondly,thereisahighbartoestablishaconventionbyestoppelevenifitispossibletogetthisthroughthe“Part8”gateway,merelyrelyingonsomerecentpastconduct/acquiescenceisnotenough.

•Finally,beclearwiththelabellingandcontentofyournotices.Onenoticecannotreallyoperateasbothandbecarefulhowyoulabelandpresentit.Thecourtwillnotallowonetoberetrospectivelyconvertedintotheother.

Whenyoustandback,thereisnotalotthatwouldsurprisereadersbythisjudgment,butitisafurthercasethatyetagainunderlinesthecourt’sattitudetochallengesofanadjudicator’sdecision,andtheimportanceofgettingyourdatesand

noticesrightorfacethesmashandgrabconsequences.Paynow,litigatelater(butdon’trelyonPart8forfactsensitivedefences)istheorderoftheday,butweallknewthatalreadyright?

RayO’Connor

Partner,Birmingham

T+441212223129

Eray.oconnor@

ThankstoAlexBradbury,solicitorapprenticeintheConstruction&EngineeringteaminourBirminghamoffice,forhiscontributiontothisarticle.

3

HighCourtProvidesGuidanceon

WhenaPartyinanUnincorporatedJointVentureCanAdjudicate

IntherecentcaseofDarchemEngineeringLimitedvBouyguesTravauxPublics&Anor[

2026

]EWHC220(TCC),theHigh

Courtaddressedacriticalquestionforlarge-scaleinfrastructureprojects:whetherasinglememberofanunincorporated

jointventure(JV)canindependentlycommenceandenforceadjudicationproceedings.

CaseBackground

ThecaseconcernsadisputethataroseinconnectionwithaNewEngineeringContract(NEC)formsubcontractattheHinkleyPointCnuclearpowerstationproject.

TheclaimantwasDarchemEngineeringLimited(Darchem),whichwaspartofan

unincorporatedJVwithFramatomeLimitedformerlyknownasEfinorLimited(Efinor).

Darchemsoughttoenforceanadjudicationdecisionintheamountof£23,944,012(the

“Decision”)againstthemaincontractor,whichwasalsoanunincorporatedJVconsistingofBouyguesTravauxPublicsandLaingO’RourkeDeliveryLimitedformerlyLaingO’RourkeConstructionLimited.

Darchembroughtthreesetsofadjudicationproceedingsonthebasisthatitwas“actingjointlyandseverallyasthesubcontractor,inaccordancewiththeagreementandclause12.6ofthesubcontract”.Thethirdadjudicationwasthesubjectoftheenforcement

proceedingsinquestion.

Ineachadjudication,therespondentsraisedjurisdictionalobjectionsonthebasisthat

Darchemwasnotapartytothesubcontractandwasnotentitledtobringanadjudicationpursuanttotherelevantprovisionsofthesubcontract.

Whilethejurisdictionobjectionwasrejectedbytheadjudicator,theobjectionwas

maintainedduringtheenforcementproceedingsandthequestiontobeconsideredbythecourtwaswhetheroneentityinanunincorporatedJVwasentitledtobringadjudicationproceedingsinitsownname,ratherthantogetherwiththeothercompanyintheJV.

4

5

HighCourtJudgment

ConstableJrefusedtoenforcetheDecisionbecausehedidnotconsiderDarchemtoconstitutea“Party”forthepurposesofclause2.2ofOptionWofthesubcontract,andthereforeitdidnothaveacontractualrighttoadjudicate.

Thereasonsforhisdecisionwerethat:

1.ThevariousargumentsmadebyMr.PaulBuckinghamKCdidnotassistDarchembecause:

a.Thesubcontractreadasawholeindicatedthattheagreementwasintendedtobebilateralasopposedtomultilateral[

17

]

b.Unlikeinclause91.1and91.2ofthesubcontract,whichcontainedadeeming

provision,theword“Party”inclause2.2ofOptionWwasnotareferencetooneoftheconstituentpartsoftheJV,buttotheJVitself[

18

-

19

]

c.ClauseX4.1Adealtspecificallywiththesituationwhere,inthecontextofaparentcompanyguarantee,aJVpartyismadeupoftwoormorecompanies[

20

]

d.Thereferenceto“Parties”inthedefinitionsofthesubcontract,andintheexecutionblockwasnotsufficientforDarchemtobeconsidereda“Party”forthepurposes

ofthesubcontractwhentakenasawholeandconsideredinlightofthewordingofclause11.2(11),whichprovidedthat“[t]hePartiesarethecontractorandthesubcontractor”[21to27]

e.Clause12.6ofthesubcontractdidnotpermitDarchemtoactjointlyandseverallyonbehalfoftheJVandinitiateadjudicationproceedingsunderOptionW,andinsteadthecorrectreadingwasthateach“Party”oftheJVwastobetakenasactingwiththeotherandtheirliabilitywasjointandseveral[28to33]

f.Thereferenceto“pre-constructionsubcontracts”intheagreementdidnotaltertheviewthatitmadesensefortheJVstobeviewedas“Parties”,andthefailureinthedraftingtorefertoDarchemandEfinoras“Parties”indicatedtheywerenot[

34

]

g.AsDarchemandEfinorwerenotparties,thereferenceto“any”before“Party”inclause2.2ofOptionWdidnotassistnordidthesuggestionthatasamatterofcontractualandcommonlawrights,anypartytoacontractisentitledtopursueaclaimonitsownbehalf[35to37]

2.AllowingeachpartytoanunincorporatedJVtostartadjudicationproceedingscould

resultin“chaos”aseachmembertotheJVmayeach,separately,commencean

adjudicationagainstanothercontractingparty,nominatingadifferentadjudicatorfor

eachinrelationtoanidenticalissueleadingtoanundesirablesituationwhereyoumayhavemultipleconflictingdecisionsdealingwiththesamepoint[

39

]

PracticalTakeaways

Whilethejudgmentisspecifictotheparticularcontractanddraftinginquestion,it

doesraisesomewiderprinciplesthatstakeholderstoconstructioncontractsshould

ensuretheyconsiderattheoutsetoftheirprojects,orwhenseekingtoexerciserightsundertheircontractframework:

1.Precisionofdrafting–Stakeholdersshouldensurethattheircontractsareclearonkeyissuessuchasdisputeresolution,payment,liabilityandtermination,aswellashowtheseissuesaremanagedinthecontextofunincorporatedJVs.

2.Determinescopeofcontractualrightsandobligations–Beforeseekingtoexercisearightunderacontract,partiesshouldensurethattheyarecertainthecontractconfersthatright.Afailuretodosomayresultinwastedcosts,ortheunintentionalrepudiationofacontractwithapotentialexposuretodamagesandotherunintendedconsequences.

3.Earlyconversations–JVsarecommoninlargeinfrastructureprojectsasameansofstakeholdersspreadingpotentialliabilityandmitigatingrisk.Earlyconversationsregardingtheallocationofriskandthepotentialneedtoexercisecontractualrightsareessentialtoensurethatallpartiesarealignedfromtheoutset.

Ourexpertconstructionandengineeringlawyersregularlyadviseonthedraftingof

complexcontractsalongsideprovidingcomprehensiveprojectsupport,andarewell-versedinadvisingonmattersofcontractinterpretationanddisputeresolution.

JamesLewis

Associate,Manchester

T+441618305314

Ejames.lewis@

Pleasecontactusifyouwouldliketodiscussanythingraisedinthisarticle.

6

Adjudication’sExpandingEmpire?

Thecourtshavebeenactiveasoflateinhandingdownjudgmentsconcerningwhenstakeholdersinconstructionprojectsmayhavearighttoadjudicate.

Fromwhetherabeneficiarycanadjudicateunderacollateralwarranty(theanswerbeingnointheabsenceofanexpressprovisionpermittingthis)

1

,towhetheroneentityinan

unincorporatedjointventure(JV)isentitledtobringadjudicationproceedingsinitsown

name,ratherthantogetherwiththeothercompanyintheJV(againtheanswerbeingno).

2

Furthermore,IntherecentjudgmentofParagonGroupLimited(Paragon)vFKFacades

Limited(FK)[

2026

]EWCH78(TCC)[

2026

]1WLUK208,HisHonourJudge(HHJ)StephenDaviesgrappledwiththe“finelybalanced”pointofwhetheranassigneeofaconstructioncontractenjoystherighttoreferdisputestoadjudication.

Indoingso,hesetlegalprecedentinestablishingthatsubjecttoanexpressprovisiontothecontrary,anassigneecouldhavearighttoreferdisputestoadjudication.PermissiontoappealtotheCourtofAppealhasbeengrantedinfavourofFK,however,givenits

insolvency,itisunclearwhethertheappealwillnowbeheard.

Background

On17October2018,OfficeDepotInternational(UK)Limited(ODI)engagedFKunderanamendedstandardformJCTMinorWorksBuildingContract2016forthecompletionofroofremedialworksatacommercialpropertyinGreaterManchester(the“Contract”).In2021,ODIassigneditsbenefitsundertheContracttoOTGroupLtd,whointurnmadeafurtherassignmentin2024toParagon.

InApril2025,ParagonterminatedtheContractafterallegingthatFKwasculpablefordelay,andinitiatedanadjudicationagainstFKinconnectionwithFK’sdelay,aswellasParagon’sconsequentialentitlementtoliquidateddamagesundertheContract.

Duringtheadjudication,FKraisedjurisdictionalchallengesgiven,amongotherthings,

ParagonhadnorighttoadjudicateundertheContractinlightofitsstatusasassignee.

TheadjudicatormadeanonbindingrulingthathehadjurisdictionandproceededtoawardParagon£80,500,anddirectedthatFKshouldpayorreimbursehisfeesof£17,787(the“Decision”).

FKrefusedtomakethepaymentoftheawardtoParagonortheadjudicator’sfees.ParagonthereforesoughttoenforcetheDecision.

DecisionoftheHighCourt

Paragon’spositionissummarisedasfollows:

i.AproperinterpretationoftheContract,andwhenreadwithanunderstandingof

thegenerallawinrelationtoassignments,showedclearlythatapartyincludedanystatutoryassigneeoftheoriginalemployerorcontractorwho,thus,alsohadtherighttoreferdisputestoadjudication

ii.Italsofollowedthatadisputearisingunderthecontractwasplainlyapttoincludeaclaimarisingunderthecontractevenwherereferredbyanassignee

iii.Thepositioninarbitrationsupportedthisposition

3

FK’spositionissummarisedasfollows:

i.Itisplainfromtheliteralwordingofthecontract,ofwhichthemostimportant

partwastheincorporatedprovisionsofPart1oftheSchemeforConstruction

Contracts(Scheme),thatonlyapartytotheconstructioncontractcanreferadisputetoadjudication

ii.ItisplainfromtheclearwordsusedintheSchemethatanassigneedoesnotbecomeapartytotheconstructioncontract.

iii.Evenifthatwaswrong,sincetherighttoadjudicateonlyextendstodisputesordifferencesarising“underthecontract”,adisputebyanassigneeisnotadisputearisingunderthecontract,sinceitarisesundertheassignment

iv.Insofarasisrelevant,commercialcommonsensesupportsthisconclusion,whenoneconsidersthedifficultiesandcomplicationsthatmayarisefromallowinganassigneetoreferadisputetoadjudication

4

HHJDaviesfavouredParagon’sanalysisanddecidedthematterinitsfavour.Hisreasoningissummarisedbelow:

i.Therewasnothingprecludingthereferenceto“party”underthetermsoftheContractortheScheme(asincorporatedbytheContract)toextendtoincludeanassigneein

thecontextofarighttoadjudicate[55to63]

ii.Theargumentthatthedisputeisnotarisingunderthecontractlackedmeritifan

assigneeisdeemedtobeapartytotheContract,andtheythenbringaclaimunderthecontract[

79

]

1AbbeyHealthcare(MillHill)Ltd(Respondent)vAugusta2008LLP(formerlySimplyConstruct(UK)LLP)(Appellant)[2024]UKSC23.

2DarchemEngineeringLimitedvBouyguesTravauxPublics&Anor[2026]EWHC220(TCC).PleaserefertoourpreviousarticlediscussingthisJudgment.

3Refertoparagraphs41and42oftheJudgment.

4Refertoparagraph40oftheJudgment.

PracticalTakeaways

Whilethejudgmentisspecifictotheparticularcontractanddraftinginquestion,it

doesraisesomewiderprinciplesthatstakeholderstoconstructioncontractsshould

ensuretheyconsiderattheoutsetoftheirprojects,orwhenseekingtoexerciserightsundertheircontractframework:

1.Controlofentitieswithadjudicationrights–Inlightoftheincreasinguseofadjudicationproceedings(andassociatedsatellitelitigation)byawiderpoolof

stakeholders,partiesshouldensurethattheircontractsadequatelyanticipateandproactivelydealwiththequestionofwhatclassofentitiescanbringclaimsvia

adjudicationunderorconnectionwiththeircontracts.

2.Additionaloptionsforstakeholders–Giventhat,intheabsenceofanexpress

clause,thereisnorighttoadjudicateundercollateralwarranties,beneficiaries

includingfunders,tenantsandlandlordsshouldconsiderincludingunconditional

assignmentprovisionsinconstructioncontractsontheprojectstheyhavean

interestin.Thismayproveausefultooltoenforcerightsinatimeandcost-effectivemanner.

3.Consideryourcontractsandassesyourriskprofile–Undertakeanauditofyourcurrentcontractstounderstandanypotentialexposuretoapotentiallyincreasedpoolofclaimants.Thisisessentialfromariskandgovernance

perspective.

Ourexpertconstructionandengineeringlawyersregularlyadviseonthedraftingof

complexcontracts,alongsideprovidingcomprehensiveprojectsupportandarewell-versedinadvisingonmattersofcontractinterpretationanddisputeresolution.

Pleasecontactusifyouwouldliketodiscussanythingraisedinthisarticle.

JamesLewis

Associate,Manchester

T+441618305314

Ejames.lewis@

PaulO’Kane

Partner,Manchester

T+441618305239

Epaul.okane@

7

8

Non-partyCostsOrders

andConstructionLitigationFunding

LessonsfromThomasBarnes&SonsPLC(inadministration)vBlackburnwith

DarwenBoroughCouncil

ThejudgementinThomasBarnes&SonsPlcv

BlackburnwithDarwenBoroughCouncil[

2022

]

EWHC2598(TechnologyandConstructionCourt

(TCC))willbefamiliartomanyintheconstruction

industry.Thatcaseconcernedtheconstruction

ofBlackburnBusStation,andThomasBarnes&

SonsPLC’s(Barnes)claimfordamages(initially

inexcessof£3million)againstBlackburnwith

DarwenBoroughCouncil(BBC)forallegedwrongfulterminationbyBBCoftheconstructioncontract.

IndismissingBarnes’claimfollowingan11-day

trialin2022,HHJStephenDavies,amongotherthings,consideredissuesrelatingtothetreatmentofconcurrentdelays,whichhasbeenthesubjectofextensivecommentaryfromsolicitorsand

contractingpartiesalike.

9

BackgroundtotheRecentDecision

In2025,BBCmadeanapplicationforanon-partycostsorder(NPCO)againstthe

respondentspursuanttoSection51oftheSeniorCourtsActs1981,inrelationto

unsecuredcostsofthesubstantivedisputeonthebasisthattherespondentshadadirectfinancialinterestinthecase,controlledthecase(tosomeextent)andinsubstanceweretherealpartiestothelitigation.TherespondentsintheinstantapplicationwereThomasBarnes,thefirstrespondent(Thomas)andBrianBarnes(Brian).Briandiedin2015andissurvivedbyhiswife,thesecondrespondent(Pamela)andtheirtwosons,thethirdand

fourthrespondents(CraigandScott),whoaretheexecutorsofhisestate(andwerejoinedasrespondentssolelyonthatbasis).

In1997,BarneshadgivenadebenturetoThomas,PamelaandBrianassecurityforlendingprovidedbythefamilythroughafamilybankaccount.TherewasaninformalunderstandingbetweenThomasandBrianthatBarnesshouldbesupportedthroughitsownresources,

andprofitsandlosseswouldbedivided.

AtthetimeoftheterminationofthecontractbyBBC,Barneswasinseverefinancial

difficulty,and,inNovember2015,administratorswereappointedbythedebentureholders.

ThomasbelievedthatBBCanditsadviserswereresponsiblefortheproblems,which

ledtoterminationofthebuildingcontract.Asaresult,Thomaswasdeterminedtoseek

financialrecoveryagainstBBCandpersuadedPamela,CraigandScotttoinstructasolicitortoadviseonaclaimagainstBBC.

In2016,MrDeanWatsonreplacedoneofthepreviousadministratorsandbecamethe

mainadministratorinvolvedinthelitigation.MrWatsoninstructedaconsultancytomakeaclaimagainstBBCforrecoveryofmoniesduetoBarnes.InDecember2016,BBC’s

solicitorswrotetotheconsultan