The Building Safety Act 2022 introduced sweeping changes to address this country’s building safety failures exposed by Grenfell. One of its most significant and arguably most revolutionary remedies introduced by the Act is the Building Liability Order, or BLO, designed to prevent relevant building safety liabilities being left behind in undercapitalised project companies while associated companies remain beyond reach.

In broad terms, a BLO allows the High Court to make one company jointly and severally liable for certain building safety liabilities of another company in the same corporate group or association structure where it is “just and equitable” to do so. That matters because development and construction projects are routinely carried out through special purpose vehicles or specialist operating companies with limited covenant strength. The BLO regime is intended to prevent relevant building safety liabilities from being stranded in those entities where associated companies remain within reach.

The decision in Crest Nicholson Regeneration Ltd & Ors v Ardmore Construction Ltd (In Administration) & Ors [2026] EWHC 789 (TCC) is therefore important. It is only the second case to consider the “just and equitable” test for a BLO and it does so in the context of a contractor in administration. Crest sought both an anticipatory BLO and an adjudication BLO following an adjudication award of around £14.9 million against Ardmore Construction Ltd.

The judgment confirms several points of practical importance.

  • First, insolvency of the original body does not prevent a BLO claim. The fact that the primary contracting entity has entered administration will not, of itself, stop the court considering whether associated entities should be brought within the liability chain.  For corporates facing distress, or those advising, this is an important consideration.   Liabilities may not be ringfenced in the insolvent company, they can extend well beyond, impacting what might otherwise be a profitable and solvent group.  The possibility of a BLO claim must therefore be factored into whether a wider group restructuring is appropriate.
  • Second, whilst strictly an interim award an adjudication decision may provide the relevant liability for BLO purposes. That is significant because adjudication is relatively cheap and quick and often used in construction disputes before final determination by the court. 
  • Third, the court accepted that a BLO may be sought in anticipation of the underlying liability being established. That gives the remedy a forward looking quality. It may be used not only after judgment but as part of the wider claims strategy.

These last two points are important in a restructuring context because they increase the likelihood and ease with which a BLO liability can be established and so increase the risk to the wider group.

The “just and equitable” test remains fact sensitive.  But earlier cases have already confirmed that the that the court’s discretion is broad and the definition wide. Relevant matters are likely to include the corporate structure, the purpose of the relevant entities, the nature of the defects, the route by which liability was established and whether it would be fair to impose liability on associated companies.

Extending liability to associated companies through BLO’s s is not limited to the classic high rise residential cladding claim. A BLO can attach to liabilities incurred as a result of a “building safety risk”, including risk to safety from the spread of fire or structural failure. That means the remedy may have relevance beyond higher risk residential buildings and may, in appropriate cases, extend to commercial or non-residential buildings. That wider point is considered in more detail in our Insight on BLOs and building safety risk.

The insurance position is also becoming much more difficult. Professional indemnity insurance is written on a claims made basis. Historic work may now give rise to current claims under extended limitation periods, while many major insurers are restricting policy terms for legacy BSA exposure, including cladding, fire safety and aggregate claim limits. The result is a mismatch between long tail statutory liability and annual insurance cover – which in the context of a restructuring means that a corporate may not have sufficient protection in place to cover these risks, creating challenges for those businesses that are looking to restructure.  The prospect of solvently rescuing a business with significant exposure to BSA claims will, it seems, be much more difficult.

Crest Nicholson v Ardmore shows that BLOs are likely to become a serious feature of building safety disputes. They affect not only litigation strategy but also, as noted, group structuring, acquisitions, refinancing, disposals and distressed situations involving construction or development businesses and those servicing the sector.

The practical point is that legacy building safety exposure now needs to be assessed across the corporate group, not simply against the company that signed the consultancy appointment or building contract. That is the reality of the new BLO regime.