Impact of Building Liability Orders on Corporate Safety Responsibility

Recent decisions in the Technology and Construction Court (TCC) have clarified the growing reach of Building Liability Orders (BLOs). Introduced under the Building Safety Act 2022, these orders allow courts to 'pierce the corporate veil', ensuring that parent or associated companies can be held responsible for safety defects even if the original subsidiary is insolvent or lacked sufficient capital.

Key cases such as Crest v Ardmore and Click Group demonstrate that the courts are taking a purposive approach to safety legislation. The rulings show that liability is no longer strictly limited to the specific legal entity that carried out the work, particularly where special purpose vehicles (SPVs) were used to ringfence assets or manage risk.

For procurement and safety managers, this shift highlights the importance of robust due diligence throughout the supply chain. Companies associated with development or contracting firms may now find themselves financially liable for remediation costs and safety failures they were not directly involved in, often without adequate insurance coverage.

As the courts continue to test the boundaries of these orders, the construction and industrial sectors must prepare for heightened scrutiny regarding corporate structures and long-term safety accountability. Staying informed on these legal precedents is essential for managing corporate risk and ensuring compliance with modern building safety standards.

Source: Construction News