The First Building Liability Order – A Turning Point in Post-Grenfell Building Safety Law

This was possible because of section 130 of the Act, which allows the courts to impose liability beyond the direct contractual party. This power is designed to overcome the challenge of developers dissolving or distancing themselves through SPVs. The judge clarified that the test for a BLO hinges not on the solvency of the parent company, but on the financial viability of the original entity at the heart of the liability.

Information Orders: Enabling Full Transparency

Alongside the BLO, the claimants were granted Information Orders under section 132. These compel disclosure from related parties about asset transfers, shareholder benefits, and financial dealings—tools aimed at exposing evasive structuring and facilitating further BLOs. Notably, the Court joined a third-party subsidiary, Click Herschel Ltd, to the proceedings to examine whether assets were transferred at undervalue—a development that could widen the scope of liability.

The information disclosed through this order may support additional claims and deepen scrutiny of corporate group structures in residential property development.

Legal Questions with Sector-Wide Relevance

The trial raised questions that stretch beyond the realm of construction law:

• Contractual escape clauses: Can a party in breach rely on contract termination rights to avoid liability?

• RTM and leaseholder cost-sharing: How should losses and remedial costs be apportioned between an RTM company and individual leaseholders?

• Post-judgment enforcement: Under what conditions can claimants retain a freezing injunction while also being released from providing a cross-undertaking in damages?
  

Answers to these questions will inform best practice in drafting leases, managing litigation risk, and allocating responsibility in multi-owned buildings.

Implications: A Legal and Regulatory Crossroads

This judgment is more than a procedural first—it is an indication that the courts are prepared to give full force to the Building Safety Act’s enforcement tools. It affirms Parliament’s commitment to addressing systemic issues exposed by Grenfell and signals that corporate group structures can no longer be used to shield liability from those with the means to remedy harm.

In practice, BLOs and Information Orders are likely to become core components of legal strategy for leaseholders, RTM companies, and managing agents navigating post-works defects—particularly where developers have become insolvent or unreachable.

As this area of law evolves, further cases will clarify thresholds for association, evidentiary standards, and the outer limits of “just and equitable” enforcement. The message is already clear: financial and legal responsibility for unsafe or defective buildings can now reach far higher up the corporate ladder than ever before.

Adam Creasey, Managing Director, Adam Benedict