IN Brief:
- The Technology and Construction Court has issued a significant judgment on Building Liability Orders.
- The case concerned alleged fire safety defects at Admiralty Quarter in Portsmouth and an unpaid adjudication award.
- The ruling confirms that BLOs can apply before final liability is determined and can be linked to adjudication decisions.
Crest Nicholson has secured a Technology and Construction Court ruling clarifying the use of Building Liability Orders in building safety defect disputes.
The case concerned Admiralty Quarter, a large residential development in Portsmouth constructed between 2007 and 2009 by Ardmore Construction Ltd under a design and build contract with Crest Nicholson Regeneration Ltd. Following post-Grenfell investigations, serious fire safety and other defects were identified across the development.
Crest Nicholson commenced adjudication against Ardmore, alleging breaches of the Defective Premises Act 1972 and Building Regulations. The adjudicator awarded Crest Nicholson around £14.9m, but Ardmore entered administration, leaving the award unpaid and effectively unenforceable against the original contracting entity.
Crest Nicholson then applied to the TCC for Building Liability Orders against associated companies in the Ardmore group. The application sought to extend liability beyond the original contracting party, using powers introduced through the Building Safety Act 2022.
The court considered whether an anticipatory Building Liability Order could be made before final liability had been determined at trial. It also considered whether an adjudicator’s decision could amount to a relevant liability under the Building Safety Act.
The court concluded that it was just and equitable to grant both applications. It held that an anticipatory BLO can be made before final liability is established and that an adjudicator’s decision can constitute a relevant liability. The decision means an unpaid adjudication award may provide a basis for extending liability to associated companies, unless and until that adjudication decision is overturned.
Building safety claims often involve historic developments, special purpose vehicles, corporate restructuring, insolvency, and complex group arrangements. Where the original contracting entity no longer has sufficient assets, claimants have faced difficulty converting liability into actual recovery. Building Liability Orders were introduced to address that risk, but contested use of the mechanism has been closely watched by lawyers, developers, contractors, and funders.
The judgment strengthens the practical force of adjudication in building safety disputes. Adjudication has long provided a fast route to decisions in construction claims, but its effect can be limited if the losing party is insolvent or asset-light. By confirming that an adjudication award can form the basis for a BLO, the court has increased the commercial weight of adjudication in post-Grenfell defect litigation.
The ruling also changes risk analysis across corporate groups. Associated companies may face greater scrutiny where liability sits within a group structure, particularly if the original contractor or developer entity is no longer able to meet the claim. Group structure is not automatically displaced, because the statutory “just and equitable” test remains central, but asset-light arrangements will be examined more closely where building safety liabilities are involved.
As building safety disputes continue to move through adjudication, litigation, remediation schemes, and settlement negotiations, the decision is likely to influence claim strategy and corporate risk management. Historic residential schemes now carry exposure that may extend beyond the entity named in the original contract, particularly where defects, insolvency, and group arrangements intersect.
