Vol 17 (2020) - Issue 6

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Bresco Electrical Services Limited (in liquidation) v Michael J Lonsdale (Electrical) Limited [2020] UKSC 25

Synopsis
The Supreme Court has endorsed the use of construction adjudication by insolvent companies in the muchanticipated case of Bresco Electrical Services Limited (in liquidation) v Michael J Lonsdale (Electrical) Limited.
1 The decision overturns Coulson LJ's decision in the Court of Appeal.
The Supreme Court was asked to consider the compatibility of two statutory regimes:
– the right to adjudication of disputes arising out of a construction contract under s.108 of the Housing Grants, Construction and Regeneration Act 1996 (the '1996 Act'); and
– the operation of insolvency set off under Rule 14.25 of the Insolvency (England and Wales) Rules 2016 (the 'Insolvency Rules').
The Supreme Court did not grant an injunction to restrain the adjudication, but instead held (i) that an adjudicator has jurisdiction to decide a claim in circumstances where insolvency set off applies, and (ii) the insolvency of the referring party was not relevant to the utility of the adjudication.