Landmark Building Safety Act 2022 Judgment: The First Building Liability Order
381 Southwark Park Road RTM Company Ltd and others v Click St Andrews Ltd and another [2024] EWHC 3179 (TCC): Adam Benedict successful in obtaining the first Building Liability Order and Information Orders under the Building Safety Act 2022
In an earlier article, dated 20 December 2024, we reported that Adam Benedict had made legal history in obtaining the first (and, to date, only) Building Liability Order under s130 of the Building Safety Act 2022.
On 4 March 2025, a transcript of the judgment awarding the Building Liability Order became available and can now be found here.
This historic judgment was given by Jefford J at a consequential hearing on 19 December 2024 following a trial in 381 Southwark Park Road RTM Company Ltd and others v Click St Andrews Ltd and another [2024] EWHC 3179 (TCC). The trial judgment was handed down on 11 December 2024.
Adam Benedict represented the claimant leaseholders and ‘right to manage’ company, who won a decisive victory against the rooftop developer and freeholder, “Click”, for negligently causing severe flood damage (as well as other significant damage) throughout their block of flats.
The trial took place over three weeks in the TCC in early 2024 and turned on extensive expert evidence, including fire safety compliance and structural engineering.
Building Liability Order
As we have previously reported in our article dated 12 December 2024, although the claimants had sought a Building Liability Order as part of their pleaded claim, the trial judgment only went so far as to make a finding of ‘relevant liability’ for the purposes of section 130(3)(b) of the Building Safety Act 2022.
It was not until the consequential hearing that a Building Liability Order was actually made against the second defendant, Click Group Holdings Ltd, the holding company for the first defendant and special purpose vehicle responsible for the development, Click St Andrews Ltd.
Interestingly, the judgment awarding the Building Liability Order makes clear that the two companies were associates even though the holding company was one removed from the SPV (i.e., it was a ‘grandparent’ company, with Click Above Ltd being the ‘operating company’ sitting ‘between’ the two entities).
Also noteworthy was the judge’s analysis that it was the original body corporate’s solvency which was relevant to satisfying the ‘just and equitable’ requirement under section 130(1) (rather than the (grand)parent company’s solvency).
Information Orders
At the consequential hearing, Jefford J also awarded the claimants the first (and to date, only) Information Orders under section 132 of the Building Safety Act 2022.
The Information Orders were made against the first and second defendants at trial, in addition to a third-party subsidiary, Click Herschel Ltd, suspected of receiving assets at an undervalue.
A far-reaching order was granted, including a requirement that full details of the consideration given in respect of share ownership in the subsidiary be provided, as well as details of the personal benefits received by the holding company’s shareholders and directors and full details of the subsidiary’s current asset and liability position.
The claimants were granted liberty to apply for a further Building Liability Order against the third-party subsidiary (which the Court joined to the proceedings on its own motion) following the deadline for compliance with the Information Orders.
Other legal issues arising within the trial judgment
While the first Building Liability Order and Information Orders to be awarded will be of natural interest to construction practitioners, the trial judgment raised a number of other interesting legal issues likely to arise in general commercial and property cases. These included:
whether a defaulting party may rely on a contractual clause permitting its rescission of the contract to avoid liability; and
the apportionment of loss and recoverability of remedial costs between a right to manage company and individual leaseholders.
The case also provides valuable guidance as to the circumstances in which a cross-undertaking may be released back to successful claimants (while they continue to benefit from a freezing injunction, even post-judgment) and the award of indemnity costs.
Future implications
Building Liability Orders (and the Information Orders aimed at facilitating them) are a centrepiece of the Building Safety Act 2022 and its far-reaching efforts to hold contractors and developers liable for fire safety and other building-related risks. Their ability to “pierce the corporate veil” of wealthier parent or sister companies upends the widespread reliance on thinly-capitalised special purpose vehicles which are often wound up at the first sign of legal trouble.
As such, Building Liability Orders are likely to signify not only a radical reform throughout the construction industry, but also a major milestone in the development of company law.
A further transcript relating to the information orders is expected to be released shortly.
Photo by Matthew Foulds on Unsplash.
