Set-off after adjudication needs careful sequencing.

Adjudication enforcement is intended to be fast and robust. Where an adjudicator orders payment, the starting point is that the paying party will usually be required to pay, even if wider disputes remain between the parties. The difficulty arises where there are competing adjudication decisions, later claims or alleged set-off rights. In that situation, the question is not simply whether the paying party has another complaint. The question is whether that other claim can properly be used to resist, reduce or delay enforcement.

The dispute in C.N.O. Plant Hire Ltd v Caldwell Construction Ltd concerned the attempted use of set-off in the context of adjudication enforcement. Caldwell sought to resist or withhold enforcement of one adjudication decision by relying on a later adjudication decision. That made the case commercially important because it showed that enforcement, set-off and adjudication sequencing must be treated as connected but distinct issues. A later decision or cross-claim does not automatically neutralise an earlier adjudication award.

Why the case matters

The case matters because parties sometimes assume that once they have obtained a later decision, or have a wider cross-claim, they can simply balance one adjudication outcome against another. That assumption is unsafe. The court’s approach to adjudication enforcement is shaped by the policy that adjudicators’ decisions should be enforced promptly unless there is a recognised basis not to do so.

For contractors, this can be commercially significant. A party that wins an adjudication should not assume that enforcement will be entirely uncomplicated if the other side has commenced, obtained or intends to rely on another adjudication decision. Equally, a party facing enforcement should not assume that a later claim automatically creates a set-off defence. The sequencing of the decisions, the wording of the orders, the contractual set-off rights, the nature of the relief and the relationship between the disputes all matter.

The wider commercial point is that adjudication strategy does not end when the decision is issued. The decision must still be converted into payment. If the other party seeks to rely on competing claims, the dispute may move from entitlement or valuation into enforcement architecture: what has been decided, what is payable now, what can be set off, and what must be dealt with separately.

Enforcement and set-off are not the same analysis

Adjudication produces temporarily binding decisions. Enforcement proceedings ask whether the court should enforce the adjudicator’s decision now. Set-off asks whether one liability can be reduced or extinguished by another. Those questions may interact, but they are not interchangeable.

That distinction matters because a later adjudication decision may be relevant without automatically defeating the normal enforcement approach. The court will be cautious about allowing enforcement proceedings to become a broad accounting exercise. If an adjudicator has ordered payment, the losing party needs a clear and recognised basis for resisting immediate enforcement. It is not enough to say that there are wider disputes, unresolved account issues or a later claim that may reduce the overall balance between the parties.

The practical danger is that set-off arguments can be used to reintroduce the whole project account into what should be a focused enforcement process. That undermines the purpose of adjudication. Contractors should therefore understand the difference between a claim that may be pursued separately and a set-off that can properly affect enforcement of an existing adjudication decision.

Sequencing affects leverage

The sequence in which adjudications are commenced and decided can materially affect leverage. A party may obtain an early payment decision and seek prompt enforcement. The other party may then pursue a later adjudication on defects, contra charges, overvaluation or final account issues. Alternatively, competing adjudications may run close together, creating tactical pressure around payment, enforcement and settlement.

Without a clear strategy, this can become procedurally unstable. The parties may spend time arguing about whether one decision can be set against another, whether enforcement should be stayed or reduced, whether the later decision changes the payment obligation, or whether the alleged cross-claim is outside the enforcement exercise altogether. That increases cost, delays recovery and can distract from the underlying commercial account.

For contractors, the lesson is not simply to adjudicate quickly. It is to adjudicate with enforcement in mind. The referring party should consider what decision it is seeking, how the relief should be framed, whether there are known cross-claims, and whether the decision will be capable of straightforward enforcement. The responding party should consider whether any cross-claim or set-off right is properly available, whether it has already been decided, and whether it can realistically affect enforcement.

Practical message for contractors

Contractors should plan adjudication sequencing before the first referral is served. If a party is pursuing payment, it should consider whether there are likely defects claims, contra charges, final account disputes or competing valuations that may later be used to resist enforcement. The relief sought should be framed clearly so that the payment obligation is as precise as possible.

If a party expects to rely on set-off, it should identify the contractual basis for doing so. The question should not be left until enforcement. The party should understand whether the contract permits set-off in the circumstances, whether the adjudication decision itself addresses or excludes set-off, whether the competing claim has been adjudicated, and whether the timing of the later decision affects the enforcement position.

This discipline is particularly important on distressed projects where payment, defects, contra charges and final account adjudications may be running in close succession. Without a coherent roadmap, the parties can end up fighting about enforcement mechanics rather than resolving the underlying commercial account. A contractor with a clear sequencing strategy is better placed to preserve leverage, pursue payment and respond to competing claims without allowing enforcement to become a procedural emergency.

Legalbuild’s view

For Legalbuild, CNO v Caldwell reinforces that adjudication strategy must be managed as a recovery sequence, not as a series of isolated disputes. Payment decisions, set-off rights, later adjudications and enforcement steps all interact. The party that understands the order in which decisions, payment obligations and cross-claims arise will usually be better placed to protect its commercial position.

Set-off should not be treated as an automatic answer to adjudication enforcement. Contractors need to know whether they are seeking payment, resisting payment, preserving a cross-claim or managing competing adjudication outcomes. Each step should be deliberate. Each referral should be framed with the likely enforcement position in mind.

Adjudication does not end with the decision. The decision must be capable of enforcement, and any competing claims must be sequenced properly. Where enforcement, set-off and later adjudications are not controlled together, a party may lose the benefit of a successful decision through avoidable procedural uncertainty. Where the sequence is planned, adjudication can remain what it is intended to be: a fast, commercially effective route to interim recovery.

Case reference: C.N.O. Plant Hire Ltd v Caldwell Construction Ltd [2024] EWHC 2188 (TCC).