One Hyde Park Limited v Laing O’Rourke Construction South Limited [2026] – is a BLO a realistic route for One Hyde Park?

Introduction – Commercial prudence or amorality?

The recent technology and construction court case One Hyde Park Limited v Laing O’Rourke Construction South Limited [2026] made a lot of legal headlines; not so much for the court’s decision that the contractor was responsible for extensive pipework and other defects at the luxury London development, but for the defendant parent company’s decision to abruptly stop funding its subsidiary’s defence at the eleventh hour and instead place the defendant into liquidation.

Perhaps seeing the writing on the wall, Laing O’Rourke Plc (LOR) allegedly ‘pulled the plug’ on the defendant, its wholly owned subsidiary Laing O’Rourke Construction South (LORCS), to distance itself from imminent liability. This move was understandably met with ‘dismay’ by both the claimant and the court, jointly condemning the move as ‘commercially amoral’ on account of LOR’s apparent use of its corporate structure to frustrate a legitimate claim despite having taken the benefit of the contract - and leaving the claimant, One Hyde Park Limited (OHP), as just one of many unsecured creditors of its insolvent subsidiary. 

A practical concern for any claimant is whether the defendant will be able to pay the damages and costs awarded. Knowing that LORCS had relatively few assets and was dependent on LOR for funding, this must have been on the mind of the OHP team, especially given the costs required to pursue such a claim over many years. 

Some confidence would have been placed on LOR/LORCS’ conduct in the lead up to the trial which had indicated that a payment would be forthcoming if parties could come to an agreement on quantum; but since this is not how matters unfolded the claimant decided to continue with the trial (incurring further costs) in order to obtain judgement. It would seem that OHP is not yet willing to give up on achieving a recovery.  

This begs the question of where next for team OHP?

Given the introduction of the Building Liability Order (BLO) under the Building Safety Act 2022 (BSA) was intended to prevent construction businesses avoiding liability by winding up expendable group entities, could OHP step over LORCS and pursue its parent company through a BLO? 

Case summary

• LORCS withdrew unexpectedly from proceedings and entered creditors’ voluntary liquidation (CVL) shortly before trial.
• The claimant applied for the defence to be struck out and to have judgment in default.
• The court agreed to the former but not the latter. The claimant accepted the judge’s point that the claimant still had a duty of fair presentation and to set out its case.
• None of the defence evidence submitted prior to the CVL was admitted. OHP’s expert evidence on causation, scope of remedial works and quantum was admitted and went unchallenged.
• The court accepted OHP’s experts’ findings that the severe corrosion to chilled water pipework, the butterfly valve failures, the soldered joint failures and faulty pantograph cradle were caused by LORCS’s poor workmanship and design failures.
• Jefford J held LORCS had breached the contract and awarded damages totalling £35,146,225.04.

What the liquidation means for the claimant’s ability to recover

Ordinarily, OHP could now expect and/or enforce payment of the sum awarded to it. As LORCS was placed into liquidation, however, OHP becomes one of a long list of unsecured creditors who will share in the remaining assets of the company.

The judgment, however sympathetic, confers no priority on OHP above other unsecured creditors. Unless the liquidators uncover and successfully challenge major past transactions or directors’ misfeasance, OHP will ultimately receive only a negligible sum from LORCS’s liquidation. 

If OHP is to recover a meaningful amount of the sum it has been awarded, it would likely need to explore other options. 

Can the claimant recover from the parent company through a building liability order?

The Building Liability Order (BLO), under section 130-131 of the BSA, was designed to prevent construction companies absolving themselves of long-term liability for serious safety defects by winding up the group entity (often a special purpose vehicle incorporated specifically for that project) that did the work and owed the contractual obligations to residents. If granted, the order makes associated companies jointly and severally liable for ‘relevant liabilities’, allowing claimants to sue parent companies for liabilities incurred by their subsidiaries. A BLO would therefore allow OHP to side-step LORCS and sue LOR instead for the £35.1m judgment debt. 

To be granted a BLO against the parent, OHP would need to prove the following:  

1. Existence of a ‘relevant liability’

A ‘relevant liability’ is defined either: 

1. Under the Defective Premises Act 1972 (DPA): “the dwelling will be fit for habitation when completed.” or;
2. Under the BSA: “risk to the safety of people in or about the building arising from the spread of fire or structural failure”.  

The second definition does not appear to apply to this case as the defects in question have not been shown to relate to fire spread or structural failure. 

Pursuing a BLO under the first definition however could prove more promising for OHP. ‘Fit for habitation’ is not defined in the DPA but the common law test is whether the dwelling can be occupied for a reasonable time:

• without risk to the health and safety of the occupants, and;
• without undue inconvenience or discomfort to the occupants.

It is not clear from the judgment alone whether an argument can be made that some or all of the apartments are unfit for habitation. One Hyde Park has been occupied for years, the defects have been known about since 2014 and the judgment makes no mention of any real day-to-day impact on residents. 

However, the analysis in the judgment only applies to the present state of the property. In Mr and Mrs Vainker v (1) Marbank Construction Ltd; (2) Mercer & Miller (a firm); and (3) SCD Architects Ltd [2024], Jefford J (coincidentally the same judge as in this case) held: 

• “There may be a breach of the duty in respect of a defect which means that the condition of the dwelling is likely to deteriorate over time and render the dwelling unfit for habitation when it does so.  In that case the dwelling can be said to be unfit for habitation at the time of completion.”  

Therefore, if OHP can prove that the defects will risk the health and safety and/or cause inconvenience or discomfort to the occupants when further deterioration occurs, it can establish a relevant liability as the development will be considered unfit for habitation. 

Whilst this will be a matter of fact for the court, it seems plausible OHP could make an argument based on the expert evidence it submitted in this case. The experts stressed that there is a requirement that the pipework, butterfly valves and soldered joints be removed and replaced. That the pipework would leak was “inevitable”, and there had already been 46 leaks attributable to the soldered joints between 2017 and 2022. Significant water ingress would probably satisfy at least one of the two limbs of the ‘fit for habitation’ test; indeed water-related defects and leaks satisfied this standard in Rendlesham Estates (2014). 

2. They are associated companies

This is the most straightforward criteria and OHP should have no issue proving this: LOR holds 100% of the issued share capital of LORCS. LOR’s conduct in relationship to LORCS, the development of One Hyde Park or the claim is immaterial. 

3. Whether it’s just and equitable 

It is hard to imagine a situation where the court would not consider it just and equitable to grant a BLO in these circumstances, assuming the claimant has proven the existence of a relevant liability. Some likely factors in the court’s decision: 

• The BLO was introduced as a tool to remedy exactly this kind of situation.
• The works are recent. During the BSA’s assent through the Lords there was a concern that extending the limitation period for claims by decades would lead to unfair trials with developers relying on documents that were no longer in existence or on faded witness testimony from many years prior – this is not the case here.
• LOR’s conduct will likely be viewed unfavourably: negotiating remedial options for years, funding the defence and preparing for trial only to withdraw right before trial.
• A fair trial has taken place with ample expert evidence submitted and judgment handed down in favour of the claimant. The defendant and parent had the opportunity to contest liability and refused to do so.
• The claimant now has no real recourse against the subsidiary given the CVL and lack of assets.
• The nature of the remedial work will be highly detrimental on the residents’ quality of life, requiring many to move out of their homes entirely whilst the work is done floor by floor over 10 years. 

Key takeaways

At first glance, One Hyde Park v Laing O’Rourke case looks like a straightforward workmanship and defects claim, found in the favour of the claimant. The big question from here and what makes the case interesting is: will LOR’s gamble to retreat behind the corporate veil, rather than stand fast in open court, ultimately pay off?

The judge’s dim view of LOR’s eleventh‑hour withdrawal offers scant consolation for residents staring down the barrel of funding repairs for defects that aren’t their fault. But whether the BLO can come to their rescue will hinge on whether the court is prepared to treat these defects, and their subsequent deterioration, as falling within the scope of a BLO - even though they do not, at least currently, present as safety issues. Given existing case law, and the parent company’s conduct, it’s entirely possible that the court may be persuaded to do just that.