3PB predicts Bresco v Lonsdale construction case to prompt an adjudication upsurge

3PB construction and commercial/insolvency barrister John Jessup predicted on Tuesday June 9 at the 3PB construction law webinar that the Supreme Court may push open the door left slightly ajar by Lord Justice Coulson at the Court of Appeal in the case of Bresco v Lonsdale [2019] EWCA Civ 27.  Today, the Supreme Court  has done rather more than that, and their decision will result inevitably in more liquidators attempting to adjudicate disputes with creditors, particularly if they can receive third-party litigation funding to do so.  Builders, contractors, developers and other businesses in the construction industry will need to keep a close eye on any insolvent partners, even long after they have become insolvent, and be ready to respond to an adjudication.

Lord Justice Coulson’s judgment included the proposition that an insolvent company could only adjudicate a dispute with a creditor in circumstances of mutual debts in “exceptional circumstances”.  Subsequent case law has explored the extent of these “exceptional circumstances”. Today the Supreme Court has provided a robust defence of adjudication by insolvent Companies in circumstances of mutual debt.

The Court’s judgment and its implications are the subject of this article by 3PB barrister John Jessup here.