Crest Nicholson v Ardmore has expanded the reach of Building Liability Orders

The Building Safety Act 2022 (or BSA) significantly changed the UK’s buildings safety regime. One of its many innovations was the introduction of Building Liability Orders (BLOs), which allow courts, in some circumstances, to extend liability for safety defects from one company to another associated one.

BLOs have only been the subject of litigation twice since they were introduced. The most recent of the two cases (Crest Nicholson v Ardmore [2026] EWHC 789 TCC) provided, for the first time, detailed judicial analysis of the “just and equitable” test in the context of section 130 of the BSA. The Technology & Construction Court has published its decision.

The judgment confirms that courts may impose BLOs before liability is finally established, and that adjudicators’ decisions can constitute “relevant liabilities” for the purposes of the Act. This widens the reach of the BSA and has important implications for corporate groups in the construction sector.

The background

Crest Nicholson (Crest) was the developer and long leaseholder of 19 residential buildings at the Admiralty Quarter development in Portsmouth. All were constructed between 2007 and 2009 under a design and build contract with Ardmore Construction Ltd (ACL).

Following the Grenfell tragedy, the external walls of the Admiralty Quarter development were investigated. Extensive fire safety defects were found, including: widespread use of combustible insulation; missing or defective cavity and fire barriers; and a missing fire-resistant sheathing board in the brickwork cladding system.

Crest referred its claims under the contract to adjudication and was awarded approximately £14.9 million. ACL challenged the jurisdiction of the adjudicator and alleged that there were breaches of natural justice. Crucially, ACL entered administration the day before the adjudicator’s decision was issued. The administrator’s report pointed to ACL suffering cash flow issues due to its exposure to historic cladding defect claims. These were made possible because while the Defective Premises Act 1973 (DPA) has a limitation period for such claims of 6 years, the BSA extended this to 30 years.

Crest then used its rights under the BSA to pursue companies associated with ACL.

The BLO applications

Crest sought two BLOs against various group entities. An ‘anticipatory’ BLO against the fourth to tenth defenders, regarding any future liability ACL might be found to owe under the DPA or arising from a ‘building safety risk’. And an adjudication BLO, to make the associated companies jointly and severally liable for the unpaid £14.9 million adjudication award.

The Ardmore defendants accepted they were “associates” under Section 131 of the BSA but resisted both orders. They argued three things:

The applications were premature
Adjudication decisions are “interim”, “rough justice”, and not “relevant liabilities”
It was not just and equitable to impose BLOs at this stage

The decision

Three elements of the decision are particularly significant: that anticipatory BLOs are permissible; adjudicators decisions can be “relevant liabilities”; and the just and equitable test was satisfied.

Anticipatory BLOs are permissible

Justice Constable held that the BSA permits anticipatory BLOs, even before liability is finally established. He held that it was appropriate for the court to consider the statutory wording and purpose of the BSA, which supports proactive intervention to prevent companies from evading responsibility through insolvency and restructuring. He reasoned that a BLO should be allowed to function as an indemnity, pending the establishment of a liability. Merely because the BLO was not needed imminently to fund remedial works and that the “just and equitable” reasons for granting it would not change between now and trial, were not good reasons for delaying granting the BLO. This did not provide a windfall, because the execution of the (anticipatory) BLO would be contingent on the establishment of a relevant liability by ACL.

Adjudicators decisions can be “relevant liabilities”

The court confirmed that adjudication decisions can form the basis of a BLO, rejecting Ardmore’s argument that adjudication is temporarily binding only and therefore incompatible with such an “extraordinary” remedy. The court held that an adjudication decision can establish a “relevant liability” for the purposes of a BLO being granted, and an application first to enforce the adjudication decision is unnecessary. The interim status of an adjudication decision does not mean that it does not create a liability. Also, the failure to comply with the decision is also a relevant liability.

This is a major development. It allows claimants to pursue associated companies without waiting for a full trial, strengthening the status of adjudication awards.

The court did accept that the adjudicator’s decision may not qualify as a relevant liability if ACL’s jurisdiction and natural justice challenges to it were good. These challenges included that a claim under the DPA was not a dispute ‘under’ the contract that could be adjudicated. However, the court rejected this and ACL’s other arguments.

The just and equitable test was satisfied

The court found it just and equitable to impose both BLOs, emphasising:

ACL’s insolvency meant it could not comply with the award or any future judgment
Ardmore group companies had undergone restructuring that appeared designed to ringfence potential liabilities
The same director or the director’s family trust controlled the group and were aware of the defects
Without a BLO, Crest would be left without meaningful recourse
The respective profit and loss apparently made on the project by Crest and ACL and a comparison of which entity had ‘deeper pockets’ were not points of any weight

Key implications of the judgment

The judgment underscores that the BSA empowers courts to look beyond corporate structures, and to ensure that the solvent associated companies cannot avoid liability for building safety defects by isolating risk in a single entity.

ACL has indicated that it intends to appeal, noting the “profound implications” for the wider industry. Many contractors with historic projects may now face increased scrutiny and claims across their corporate groups, potentially based on adjudication decisions.

By confirming the availability of anticipatory BLOs and recognising adjudication decisions on DPA claims as ‘relevant liabilities’, the TCC has significantly expanded the tools available to claimants seeking redress for building safety defects.

The decision reinforces the BSA’s core purpose: ensuring that those responsible for unsafe buildings (whether directly or through association) cannot escape liability though insolvency or corporate structuring. Subject to any appeal, it sets a precedent that may shape litigation strategy and corporate governance across the construction sector for years to come. If you would like help with this, or have any questions, please contact a member of our Construction, Engineering and Infrastructure Disputes team.

This article was co-authored by Trainee Euan Rennie.

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