Guidance for BLOs and Information Orders

Giles Tagg and Thomas Adamson analyse long-awaited guidance for building liability orders and Information Orders.

Overview

As has been widely reported, the Building Safety Act 2022 ("the BSA") has introduced significant new measures to help ensure accountability in respect of fire safety defects following the Grenfell Tower tragedy.

This includes the introduction of a new statutory remedy in the form of Building Liability Orders ("BLO"), governed by Section 130 of the BSA. Provided the court deems it 'just and equitable' to grant an order, BLOs can extend specific liabilities of one 'original' company to another company that is 'associated' with it. In effect, BLOs circumvent the corporate veil and are intended to avoid a scenario whereby a wronged party is left uncompensated when a liable party dissolves and/or has insufficient assets to meet a claim.

To obtain sufficient information to enable a party to determine whether it should apply for a BLO, the BSA also introduced 'Information Orders', governed by Section 132 of the BSA.

Whilst BLOs and Information Orders have been widely reported upon there has, until now, been very little judicial guidance as to how they will be dealt with in practice. The court has now provided much awaited clarity, particularly in relation to Information Orders, within the recent judgment of BDW Trading Limited v Ardmore Construction Limited and Others [2025] EWHC 434 (TCC).

Court guidance

Whilst the case concerned applications for information rather than for BLOs, the court nonetheless confirmed that it is not a precondition to obtaining a BLO that the liability of the 'original' company has first been established. Judge Keyser KC commented:

I can see nothing in section 130 that makes it a precondition to the making of a building liability order that the relevant liability of the original body shall already have been established.

In that regard, Judge Keyser KC noted that BLOs can effectively operate as an indemnity (i.e. “If this original body has any relevant liability… …this associate shall also have that liability”). He made clear that this does not mean that a BLO cannot be made after liability has been established against the 'original' company.

Regarding Information Orders, the court carefully examined the following wording of Section 132 (our emphasis added): 

An information order may be made only if it appears to the court—

(a) that the body corporate is subject to a relevant liability (within the meaning of section 130),and

The court accepted the submission of the Respondents that no order can be made against them because there is "no basis" for supposing that they have any relevant liability within the above meaning. Judge Keyser KC commented:

It is very difficult to see how “it appears to the court” can indicate anything other than a view arrived at by the court.

In other words, it is not sufficient for an Applicant for an Information Order to state that it has relied upon legal or expert advice to demonstrate that a 'relevant liability' exists; the court will only grant an Information Order if it considers that the Respondent to the Application is in fact currently liable to the Applicant in relation to a 'building safety' related claim.

To enable a court to form that view, Judge Keyser KC appears to suggest, in appropriate circumstances, it may be suitable for an applicant to put its evidence before the court and invite a non-binding assessment on the merits. Judge Keyser however confirmed that this exercise should be done outside of an Information Order application, which he noted "…do not impose the court any obligation to become embroiled in assessments of the merits of disputed matters". Judge Keyser concludes that applications for information should be "short and uncomplicated".

Interestingly, the court's decision is contrary to the example given in the Explanatory Notes to the BSA, which do not form part of the statute. The example clearly shows an Information Order being made not against the “original company” but against a company believed to be 'associated' with it.

In that regard, Judge Keyser KC considers the Explanatory Notes are "…impossible to square with the wording of section 132" of the BSA, which governs Information Orders. He refers to established case law principles to note that, although the Explanatory Notes are an admissible guide to the interpretation of a statute, "…what matters is the interpretation of the statute, not that of the Explanatory Notes". 

Provision of information

Separately, the Court gave some commentary as to the scope of information that would have been ordered had the application been successful.

Broadly speaking, when considering whether to order the provision of information, the court will have regard to whether the request for information is, in its view, necessary to enable an Applicant to a) identify whether the particular Respondent is associated, or b) to assess whether it would be worthwhile to apply for a BLO against it. Judge Keyser KC noted:

"These will clearly include information and documents that enable the applicant to identify associates of the respondent. In an appropriate case, they will, in my view, also include matters concerning the financial position of the associate."

However, it is clear from Judge Keyser KC's comments that the court will be reluctant to order the provision of commercially sensitive information that goes beyond what is publicly available, for instance on Companies House.

Comment

The case provides helpful clarity regarding BLOs whilst demonstrating the hurdles that applicants face in order to make successful applications for Information Orders.

That said, in respect of BLOs, further judicial guidance is keenly awaited. In particular, we await an indication as to the approach that the court will take when applying its discretion in considering whether it 'just and equitable' to grant a BLO.

Separately, given the contradictory advice contained within the Explanatory Notes, we anticipate many applicants will have made applications on a similar basis as in the present case and await a hearing. We consider that those applicants may choose to amend their applications to comply with Mr Keyser's guidance, for instance to ensure that the information is sought only against an entity that already has an established liability (i.e. rather than against an associated entity with no established liability). Alternatively, applicants may choose to make a separate application to invite the court to make a non-binding merits-based assessment on liability (in respect of an associated entity) prior to proceeding with an Information Order Application.

Clearly, these steps carry added time, risk and cost. This could be unattractive to many applicants, depending on the circumstances of the particular case.

For present purposes, the decision may lead to fewer Information Orders being applied for or, at least, granted. Judge Keyser KC appears to acknowledge this point, noting that his judgment may mean that "information orders will be made sparingly in cases where liability is in issue".

Giles Tagg is a Partner and Thomas Adamson is a Senior Associate at DAC Beachcroft.