TCC grants Building Liability Order to enforce adjudication decision

A TCC decision last week has granted a Building Liability Order under the Building Safety Act 2022 in relation to amounts required to be paid by an adjudication decision. This is a significant development which is likely to change the way in which historic building safety claims are pursued by claimants. It is also likely to allow Building Liability Information Orders to be obtained more readily. The court also approved the giving of anticipatory BLOs ahead of trial in TCC proceedings where the circumstances of the case allow the court to have sufficient confidence (subject to matters of quantum) that a BLO will be made at trial. 

Building Liability Orders: an overview

Section 130 of the Building Safety Act 2022 (the “BSA”) permits liability for construction work to be extended to associated entities such as parent or sibling companies. Ordered at the court’s discretion if it is considered “just and equitable to do so”, a Building Liability Order (“BLO”) can be made in relation to any liability arising under the Defective Premises Act 1972 (as amended), section 38 of the Building Act 1984 or any other claim arising from a “building safety risk” (a “Relevant Liability”). 

The concept of an associated entity under the BSA (an “Associate”) is broad and includes companies which have been parents or siblings of the company primarily liable (the “Principal Defendant”) “at any time” since the works in question were commenced. BLOs could therefore be made in relation to projects or companies which have long since been sold or which have only been recently purchased long after construction has been completed.

Section 132 of the BSA also provides a right for certain persons to apply for information orders (a “BLIO”) requiring the disclosure of information for the purpose of enabling an applicant to consider whether to make an application for a BLO. Such orders are intended to allow claimants to obtain the information necessary to piece together any complex ownership structures and to evaluate the merits of seeking a BLO. 

Crest Nicholson Regeneration Ltd v Ardmore Construction Ltd

Crest engaged Ardmore as the design and build contractor for a large development in Portsmouth, comprising 18 separate buildings and completed in March 2009. Following the Grenfell fire disaster, fire safety defects were discovered in the external wall systems of the buildings. In 2022, proceedings were commenced against Crest by the owners of the development and Crest commenced proceedings against Ardmore. These proceedings were stayed to allow further pre-action correspondence in relation to the claims. 

In 2025, Crest successfully obtained an adjudication decision against Ardmore for the payment of £14.9 million in remediation costs. Whilst the adjudicator found that Crest’s claims under the design and build contract were time-barred under the Limitation Act, its claim under the Defective Premises Act 1972 (the “DPA”) was upheld. 

The adjudication decision was not paid and Crest sought two separate BLOs from the TCC against various companies in the broader Ardmore group (referred to as the “BLO Defendants”): 

• The first was a BLO declaring that, in relation to the development, any liability that Ardmore may have to Crest “under section 1 of the Defective Premises Act 1972 or as a result of a building safety risk is also the joint and several liability of each of the” BLO Defendants. This order was sought in anticipation of the outcome of the TCC proceedings brought by Crest against Ardmore.
   
• In addition, Crest sought an order making the BLO Defendants jointly and severally liable for the amount of the adjudication decision.

There was no dispute that each of the BLO Defendants was an Associate within the meaning of section 130 of the BSA. Broadly speaking, the primary objection made in relation to both BLOs was that it was premature to order them ahead of a final determination of liability in Crest’s TCC proceedings against Ardmore. The court disagreed and made both BLOs against all of the BLO Defendants. 

Anticipatory BLOs

Two previous cases have considered the making of anticipatory BLOs. In BDW Trading Ltd v Ardmore Construction Ltd, the TCC had found (albeit obiter) that there was nothing in section 130 which required a party to have already established a Relevant Liability in order to obtain a BLO. The section therefore contemplated that a BLO could be made on an indemnity basis i.e. an order that any Relevant Liability subsequently established against a party would also be a liability held by an Associate of that party. For our article on that case, please click here.

In the Click St Andrews case, the first case in which a BLO had been granted by the TCC, a BLO was ordered despite the fact that the liability in question could not be quantified at that point in time, although its existence had been finally determined. For our article on that case, please click here.

Adopting the reasoning in both of those cases and, in the absence of any dispute over the identity of Associates, the court turned to consider whether it would be “just and equitable” to make a BLO in advance of a final judgment on liability. Ardmore’s primary argument was that the broad range of factors to be considered under the just and equitable test meant that a decision could only be made after a full trial on liability. The court rejected any general rule to this effect, but accepted it was relevant to consider, on the basis of the evidence then before it, the likelihood of whether disclosure, witness evidence and expert evidence at trial might alter its assessment of the just and equitable test. This was something to be considered separately in relation to each factor said to be relevant, “considering not just the relevance and weight to be given to any particular factor, but the extent to which the Court considers, in relation to that factor, that it is in a position to determine the matter now, or whether the picture may be materially different at the end of the liability trial.”

Applying this approach, the court found that there was a “high degree of confidence” that the development contained building safety risks and that Ardmore would be found liable for those risks. It was just and equitable to make a BLO at the present time and that assessment was unlikely to change after a full trial on liability. A number of specific arguments made by Ardmore were rejected as follows:

• The purpose of the BLO provisions was not restricted to enabling domestic property owners to fund remedial works. Rather, even where owners had access to existing funding, the purpose of the provisions was to ensure that those who caused historical building safety defects should pay for their remediation.
   
• There was a good reason for making a BLO in anticipation of trial, as this would allow Crest to better judge whether the costs of a trial against an insolvent company would be worth incurring. Likewise, clarity over the making of a BLO would allow the BLO Defendants to know whether it was worth funding the defence of a trial on liability.
   
• The fact that Crest was a large commercial developer who had profited from the development, whilst Ardmore had made a net loss, was of little weight. Whilst a significant commercial imbalance may sometimes be of relevance, both Crest and Ardmore were substantial and sophisticated corporations. To find otherwise would lead to an unsatisfactory outcome where commercially unsuccessful builders were able to avoid the application of the BSA, whilst commercially successful ones could not. This conclusion is also supported by the Supreme Court’s comments in URS v BDW that a central purpose of the BSA was to “hold those responsible for building safety defects accountable” – a purpose achieved by ensuring that liability flows down from owners and developers through to contractors and consultants as appropriate.
   
• The fact that the outcome of a trial may significantly change the quantum of Ardmore’s liability was not something weighing against an anticipatory BLO. As in the Click St Andrews decision, a BLO could be granted subject to quantum being determined.
   
• The fact that a trial would also explore whether there were reasons why the full extent of Ardmore’s liability (when established) should not be transmitted to the BLO Defendants in a BLO was also not something weighing against an anticipatory BLO. For example, the fact that Crest was insured for the cost of the remedial works, or any elements of culpability on Crest’s part, might result in a reduction of the proportion of Ardmore’s liability (if established) which was properly to be transmitted by a BLO. Whilst the value of such a reduction would be subject to the just and equitable test and could only be determined at trial, this was akin to a quantum issue which did not militate against the making of an anticipatory BLO in general terms. 

BLOs to enforce an adjudication decision

Ardmore contended that a BLO should not be made to enforce an adjudication decision both as a matter of jurisdiction and on “just and equitable” grounds. 

As to jurisdiction, Ardmore claimed that the temporarily binding nature of an adjudication decision meant that it could not be a Relevant Liability under section 130. It argued that Parliament could not have intended that the extraordinary powers to pierce the corporate veil by making a BLO could be exercised in relation to an adjudication decision which could only achieve “rough justice” and was only temporarily binding. The court disagreed with this analysis, noting that an adjudication decision remains binding until any final determination to the contrary and therefore creates a “liability” in the ordinary sense of that word. Given the adjudication regime is well known and “central to the very industry most closely associated with the BSA”, one could assume Parliament would have spelt out any intention to exclude adjudication decisions from section 130. 

For similar reasons, there was no “just and equitable” reason why a BLO should not be made to enforce an adjudicator’s decision. The result of Ardmore’s submission would be to deprive many claimants of adjudication as an effective tool for the resolution of building safety disputes – as the only route to a BLO would be through a full-blown trial in the TCC. As the court noted: 

“It is well known to all practitioners that building safety matters, in the wake of Grenfell Tower, have given rise to what is probably the single largest area of construction disputes in recent history, if not ever. There is no principled justification to limit or significantly de-incentivise the use of such an effective tool for resolving such disputes from the industry, which would be the practical effect of [Ardmore’s] submission.”

A number of more specific arguments made by Ardmore were also rejected as follows:

• Following previous cases on the application of the “just and equitable” test (such as Triathlon), the financial position of the BLO Defendants was of little relevance, as was the lack of any immediate need of funds by Crest to carry out remedial works.
   
• Whilst the BSA does not provide for the repayment of money paid under a BLO if the liability in respect of which it was made is subsequently reduced or eliminated, it would be surprising if there were no mechanism for the BLO Defendants to recover any overpayment shown to have been made after a full liability trial in the TCC. The court suggested that the general power under the CPR to vary or revoke an order in materially changed circumstances might be used for this purpose. 
   
• The fact that Ardmore complained that it had been ambushed by Crest’s adjudication was of little weight. This had been partially of Ardmore’s own making by reducing engagement with the claim to save legal costs, but even if Ardmore was not able to defend the adjudication as fully as it might in different circumstances have wished, that did not “make it unjust or inequitable to permit Crest to exercise its statutory ability to require the BLO Defendants to stand by the liability created by the Adjudicator’s Decision.”
   
• Various criticisms made as to the adjudicator’s reasoning, but which did not affect the enforceability of the adjudicator’s decision, were of little weight. The adjudication decision had resulted in a Relevant Liability and the question was whether that liability, as decided, should be the subject of a BLO. 

Could the DPA claim be adjudicated?

In addition to its arguments under section 130, Ardmore also sought to raise a number of jurisdictional arguments as to the enforceability of the adjudication decision. Chief among these was that a claim under the DPA fell outside the scope of the adjudication clause. The clause permitted the referral of disputes “under the contract”. This follows the wording of section 108 of the Housing Grants Construction and Regeneration Act 1996 (as amended). Ardmore argued that this limited the right of adjudication to contractual claims with the result that Crest’s claim under the DPA was beyond the jurisdiction of the adjudicator. 

The same argument had previously been run by Ardmore in a different case (in BDW v Ardmore) and rejected by the TCC. For our article on that case, please click here. The Court of Appeal had granted permission to appeal on this issue, but the case settled before the appeal was heard. It appears for this reason that the issue was raised afresh by Ardmore in the present case. 

Somewhat unsurprisingly, the judge adopted the reasoning of the court in BDW v Ardmore and rejected the challenge to the adjudicator’s jurisdiction to determine the DPA claim. 

Conclusions and implications

This is a highly significant decision which is likely to change the landscape for building safety claims in the years to come. Of particular significance is the ability to obtain BLOs in relation to adjudication decisions. For many historic building safety claims, the original developer or builder is either no longer in existence or is an SPV type company with no significant assets. The ability to obtain a BLO is crucial to the viability of such claims. The doubts that previously existed over the ability to obtain BLOs in relation to adjudication decisions meant that, for all practical purposes, these claims were forced to proceed via full-blown TCC proceedings with all the time and expense that entails. 

The present decision opens the door for such claims to be pursued through adjudication proceedings and subsequently enforced against Associates if needs be. This will considerably reduce the time and cost of progressing such claims to a conclusion and will inevitably result in more building safety adjudications and more applications for BLOs. This, in turn, is likely to result in greater efforts by those subject to such BLOs to challenge the merits of the underlying adjudication decision through TCC proceedings. This will bring into sharp focus the precise mechanism by which overpayments made pursuant to a BLO can be claimed back in the event of an adjudication decision being overturned.

The court’s decision to grant BLOs was supported by the fact that Ardmore was in administration and would be unable to satisfy a judgment against it, as well as the absence of any real doubt that it would be found liable for building safety risks within the development. Given the highly fact-sensitive nature of the “just and equitable” test, the existence of a genuine dispute over these matters may affect how the test is applied in future cases.  

The present decision will also have significant implications for obtaining Building Liability Information Orders. We have previously reported on a TCC case which had narrowed the scope for such orders by concluding that they could only be made against the original party subject to a Relevant Liability and that the Relevant Liability must be sufficiently clear to the court without a detailed merits assessment. For our article on this case, please click here. This had been thought in the majority of cases where the Relevant Liability was disputed to require a judgment or arbitration award establishing liability. However, on the basis of the present decision, this requirement might much more easily be satisfied through an adjudication decision (which might only deal with liability, leaving quantum for a subsequent adjudication). 

The point is well illustrated by the sequence of events in the BDW v Ardmore litigation. An adjudication decision requiring payment by the contractor was received in relation to one of a number of developments in issue between the parties. The adjudication was challenged by the contractor on the basis of the DPA point discussed above. Enforcement proceedings were brought by the developer where the contractor’s challenge was dismissed and the decision enforced. The contractor subsequently paid the decision, but the developer sought BLIOs in relation to alleged Relevant Liabilities in relation to the remaining developments in dispute. BLIOs were rejected on the basis (among other things) that the Relevant Liabilities for these developments were contested and were not sufficiently clear at the hearing of the application for the BLIOs. On the basis of the present decision, the developer could have avoided this fate by immediately applying for BLIOs when the contractor had challenged the initial adjudication decision. The adjudication decision would have provided the clarity as to a Relevant Liability needed to support an application for BLIOs. After the BLIOs were made and the relevant information received, the decision could then have been enforced against the contractor. In other words, reversing the order in which applications were made could well have resulted in the developer having greater success with its BLIO application. 

Finally, we note that the re-running of a Ardmore’s jurisdictional arguments in relation to the ability of adjudicators to consider DPA claims may signal an intention to appeal the present decision. Authoritative guidance on all of these issues from the Court of Appeal may therefore be in prospect. 

References:

BDW Trading Ltd v Ardmore Construction Ltd [2024] EWHC 3235

381 Southwark Park Road RTM Company Ltd v Click St Andrews Ltd [2024] EWHC 3569 (TCC)

BDW Trading Ltd v Ardmore Construction Ltd [2025] EWHC 434 (TCC)

Crest Nicholson Regeneration Ltd v Ardmore Construction Ltd [2026] EWHC 789 (TCC)