Welcome clarification on Building Liability Orders – Analysis of Crest Nicholson Regeneration Limited v Ardmore Construction Ltd & Ors

On the 1 April 2026 the Technology and Construction Court (TCC) handed down judgment in the second case where a Building Liability Order (BLO) has been made, the first being Southwark Park Road RTM Co Ltd v Click St Andrews Ltd [2024].

As a reminder a BLO is an order:

• Made against an ‘associate’ (as defined under section 130 of the Building Safety Act) of a defendant.
• Requiring the associates to pay a sum of money to the claimant in respect of a ‘relevant liability’ being either a liability of the defendant under the Defective Premises Act 1972 or a liability as a result of a building safety risk which is a risk to the safety of people in or about the building arising from the spread of fire or structural failure.

The judgment marks a significant development in our understanding of how the TCC will decide Building Liability Order claims.  While Click St Andrews laid much of the conceptual groundwork, Crest Nicholson provides more detailed guidance on how the jurisdiction will be exercised in practice, and in particular how the Court will approach:

• What are described in the Crest Nicholson case as “anticipatory” BLOs ie the making of a BLO before liability of the defendant has been determined
• The interaction between adjudication decisions and the requirement for a ‘relevant liability’ when making a BLO
• The “just and equitable” test (ie is it just and equitable to make a BLO)

This article considers some of the key takeaways from the judgment, and explores the wider implications, including from an insurance perspective.

Facts

The claimants, four entities of Crest Nicholson group companies brought a claim against Ardmore Construction Ltd, who had been the design and build contractor under a JCT 1998 Standard Form of Building Contract with contractor’s design, in respect of alleged fire safety and other defects at Admiralty Quarter; a large residential development in Portsmouth, constructed between 2007 and 2009.

Following post Grenfell investigations, Crest identified fire safety defects. Crest commenced adjudication proceedings against Ardmore in May 2025. The adjudicator awarded Crest approximately £14.9 million; Ardmore entered administration the day before the adjudicator’s decision was issued.

Crest applied to the TCC for BLOs against companies within the wider Ardmore group (Ardmore Group Companies), who met the definition of being ‘associated’ with Ardmore for the purpose of obtaining a BLO and sought anticipatory joint and several BLOs in respect of any relevant liability of Ardmore based on the adjudicator’s decision being a relevant liability.

Anticipatory BLOs

The Court decided it could make ‘anticipatory’ BLOs and set out some useful considerations in determining whether or not to do so.
The practical effect of an anticipatory BLO is that a contingent and as yet unquantified liability against an original defendant can be placed upon an ‘associate(s)’. The contingency in respect of the liability for the associate(s) is a finding that the original defendant has a “relevant liability”.

This is likely to be a useful development for employers pursuing contractors in circumstances where it is unclear whether the associates of the original defendant, in the event of any finding of liability against the original body and where that original body is unlikely to be able to meet the liability, would have a BLO made against them. Employers will be able to ascertain early on, prior to incurring the costs of a full court process, their realistic chances of being paid by the associated entities.

Just and equitable

Perhaps the most universally applicable insight from Crest comes in respect of how the Court will assess just the “just and equitable” test which is a condition of awarding a BLO. Of particular note, is the restatement of the purpose of BLOs when considering the just and equitable test.

Not a SPV

The TCC determined that BLOs are created to deal with a mischief wider than simply Special Purpose Vehicle (SPV) or shell company creations shielding wider group companies from liability. The policy objective being to “allow those directly responsible for defective work to be pursued, with the BLO being a tool introduced by the BSA to further that policy.” There had been a suggestion that BLOs were intended to prevent companies using clever corporate structuring and SPVs, or thinly capitalised companies, to avoid the financial impact of adverse judgment. This part of the decision makes clear that the Courts will apply BLOs in wider circumstances, with the principal aim being to allow those ‘associated’ companies to be pursued in circumstances where the original body, ie, the company which was directly responsible for the works, is unable, or unwilling to pay through insolvency or otherwise. Therefore, the key question is not whether the corporate structuring was abusive, but whether it is just and equitable, to extend liability to associated entities who had no contractual responsibility for the defective works.

Crest had deeper pockets

Another line of argument was that it was not just and equitable to grant a BLO, because Crest had deeper pockets than the Ardmore Group Companies. In addressing that argument, the Court determined that in circumstances where both parties to the claim were substantial, sophisticated corporate entities, the respective wealth of the parties was to be given little weight. The Court however note that “There may, of course, be other situations where amongst other factors, a significant disparity in financial heft between applicant and respondent could be a matter which weighs in the balance…”. This suggests that the respective wealth of the parties may be a relevant factor when considering the just and equitable test, in circumstances where those defending BLO proceedings are insubstantial and/or unsophisticated. However, that argument will likely be enough on its own to persuade the Court that it is not just and equitable to grant a BLO.

Insurance

Some of the other factors considered when weighing the just and equitable test largely speak for themselves but are worth noting for their wider importance. The first being that, and this is likely to be welcome news for insurers, the claimant’s insurance position should be given little or no weight when considering the just and equitable test.

Contribution to the remediation of building safety related defects

Perhaps unsurprisingly, that Ardmore’s overall contribution to the remediation of building safety related defects was to be given no weight when considering Crest’s BLO applications.

Adjudicator’s decisions as ‘relevant liabilities’ for the purpose of a BLO
The third key aspect of BLOs which the Court considered in this case was the status of adjudication decisions and their ability to constitute a “relevant liability” for the purposes of section130 of the Building Safety Act 2022.

In the present case, the judge held that “an adjudicator’s decision is in principle, capable of being a relevant liability”. This has the potential to massively shorten the time frame (and the cost) of obtaining a BLO.  

The practical implications are significant:

• A claimant may rely on an adjudicator’s decision finding defective work as the foundation for a BLO application.
• This creates a procedural shortcut: rather than a full trial on liability, an applicant may use adjudication as a relatively rapid mechanism to establish a prima facie relevant liability for the purposes of obtaining a BLO (anticipatory or otherwise).
• Once that threshold is crossed, associated entities of the party required to make payment as a result of an adjudicator’s decision may face a BLO (anticipatory or otherwise) on a joint and several basis.  

That said, this is not without risk. Adjudication decisions are temporarily binding and can be overturned in subsequent proceedings and are often reached on a limited evidential basis. Respondents to BLO applications are therefore likely to scrutinise adjudication outcomes closely.

Other points to note

The Court confirmed the decision in BDW Trading Ltd v Ardmore Construction Ltd [2025] 1.W.L.R. 3101 that an adjudicator can decide a claim brought under the Defective Premises Act 1972 (where limitation can be extended by the Building Safety Act for up to 30 years).

The Court made it clear that there is no need for enforcement proceedings to have been brought in relation to any adjudication before making a BLO.

Implications on the insurance market

Although the present case was not a coverage dispute, the decision has clear relevance for the construction professional indemnity market.
A central theme of the judgment is the Court’s willingness to look beyond the contracting entity and focus on those associated with the contracting entity with funds. From an insurance perspective, this may give rise to complexity:

• The entity targeted by the BLO will not the contracting party
• The insured entity did not itself carry out the works
• Insurance programmes were historically structured on an SPV by SPV basis

In such circumstances, arguments around whether liabilities imposed via BLOs fall within existing cover and whether the risk was intended to be captured by the policy as underwritten will likely be brought into question.

Further, the Court considered Crest’s insurance position, and Ardmore Group Companies’ argument that Crest might have the benefit of insurance in respect of the defects claim and that, “in the context of a ‘hierarchy of liability’, a claim for recovery against an insurer should come above a claim which depends on a BLO…”.  The Court held that Crest’s insurance position “should be given no or little weight in the exercise of discretion”. This indicates that the presence of insurance available to the applicant will generally carry little weight when the Court determines whether it is just and equitable to grant a BLO.  It provides some reassurance to insurers and other applicants that the status of an applicant’s insurance position is unlikely, of itself, to drive the Court’s discretion when deciding whether to grant a BLO.

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