Adjudicate, Then Attach: One Decision, the Whole Group

For thirty years the standard reassurance about adjudication has been that it is rough justice between two contracting parties, temporarily binding, and reversible at trial. Crest Nicholson v Ardmore leaves the first two halves of that sentence intact and removes the comfort. A decision of an adjudicator, reached in a process the responding company barely defended, was used to impose joint and several liability for £14.9m on seven companies that never signed the contract. It was made before trial, without a stay, payable in fourteen days. The law in the judgment is new and will be tested on appeal. The reasoning that produced the result is not new at all: it is an assessment of what six years of correspondence, expert engagement and corporate restructuring actually showed.

Admiralty Quarter in Portsmouth is nineteen residential apartment buildings, constructed between 2007 and March 2009 under a JCT 1998 design and build contract dated 13 December 2005 between Crest Nicholson Regeneration Ltd and Ardmore Construction Ltd ("ACL").¹ After Grenfell, investigation of the external walls disclosed combustible insulation, missing and defectively installed cavity barriers and missing fire resistant sheathing, together with internal compartmentation and firestopping defects. ACL engaged with the allegations for years: it attended intrusive inspections from October 2018, instructed its own fire, architectural and building experts, and took part in expert meetings through 2021. Its own fire engineering expert reported in November 2023 that the overall risk across the external walls was high.¹

In March 2025 ACL dis-instructed its solicitors and its experts. In May 2025 Crest referred the external wall defects to adjudication, including a claim for breach of the duty under section 1 of the Defective Premises Act 1972. ACL participated, but advanced a positive case on quantum only. The adjudicator decided on 29 August 2025 that the defects rendered certain dwellings unfit for habitation, that ACL was in breach of section 1(1)(a) of the 1972 Act, and that it should pay approximately £14,928,320.²

ACL entered administration on 28 August 2025, the day before the decision was issued. The judge accepted, for the purposes of the application, that the timing was coincidental, and expressly declined to find that the administration was a cynical move. He nonetheless found on the administrator's own report that the decision to place ACL into administration was driven wholly or in significant part by its exposure to cladding claims following Grenfell, and that ACL would not be able to satisfy either the decision or any judgment at trial.³

Crest applied on 5 September 2025 for building liability orders against seven other Ardmore companies. The application was heard over three days in March 2026 and judgment was handed down on 1 April 2026.

Section 130 of the Building Safety Act 2022 allows the High Court to order that a "relevant liability" of one body corporate is also the liability, or the joint and several liability, of specified associated bodies corporate, where it considers it just and equitable to do so.⁴ Crest sought two distinct orders, and obtained both.

The first was an anticipatory order: that any liability ACL may be found to owe under section 1 of the Defective Premises Act 1972, or as a result of a building safety risk, is also the joint and several liability of each of the seven associates. The court granted it, before trial, on the footing that liability at trial was close to inevitable.⁵ The second was an order making the same seven companies jointly and severally liable for the £14.9m already decided in the adjudication. The court granted that too.⁶

The distinction matters commercially. The anticipatory order attaches to an outcome that does not yet exist. The adjudication order attaches to a sum that was payable within days. It is the second that changes how adjudications will be run.

The defendants' argument had obvious force. An adjudicator's decision binds only until the dispute is finally determined. A building liability order is final. If the court later finds at trial that no liability existed, the order will have been made in respect of a liability that never was. Parliament, they said, cannot have intended so extraordinary a power to attach to what Lord Briggs has described as an interim remedy.

The court rejected it in four steps.⁷ First, the interim status of a decision does not mean it creates no liability: it plainly does, and if unchallenged it becomes a binding determination for all time. Second, the standard method of enforcing a decision, as a debt arising from the obligation to pay, does not displace the fact that the adjudicator has also determined the existence of a substantive liability. Third, no injustice follows, because the associates can counterclaim in restitution if the sum is later shown not to be due, and because the just and equitable test is itself the safety valve for any case where transmission would be unfair. Fourth, and most durable, the word "liability" in the statute is an ordinary word, and it was the defendants who were seeking to carve out a particular species of liability that is central to the very industry the Act addresses. Had Parliament intended the adjudication regime and the building safety regime to be mutually exclusive, that is what would have needed spelling out.

The court added an alternative route, and it is the wider one. Failure to comply with the decision is itself a liability incurred as a result of a building safety risk, there being a sufficient causal nexus between the substantive liability determined in the adjudication and the consequent liability created by non-payment.⁷ On that analysis it is the non-payment, not the underlying defect finding, that transmits.

The interim status of a decision does not mean it creates no liability. It plainly does.

A jurisdictional challenge ran alongside: that a claim under the Defective Premises Act is not a dispute "arising under" a building contract and so was outside the adjudicator's remit. The court endorsed and adopted the reasoning of Joanna Smith J in BDW Trading v Ardmore, holding that the obligation to comply with the 1972 Act was created, at least indirectly, by the contract through which the contractor took on the works.⁸ Two High Court judges have now reached the same conclusion on the same contractor's contracts. Permission to appeal the earlier decision had been granted by Coulson LJ in February 2025, but the appeal was not pursued after ACL's administration, so the point remains undetermined above first instance.

The statutory analysis occupies the headlines. It is not what decided the case. The court declined to reduce the just and equitable test to criteria, holding it broad, discretionary and necessarily fact specific, to be exercised by reference to the purpose of the Act and all relevant factors.⁹ The purpose was agreed in oral argument to be the wider one, allowing those directly responsible for defective work to be pursued through their associates, rather than the narrow one of defeating special purpose vehicles. That concession removed the defendants' central theme: that a substantial trading group, which never used thinly capitalised vehicles, was outside the mischief.

What was left was the evidence, and four features of it did the work.

Even so, the financial point was decided on principle rather than on the scepticism. Following Triathlon and Click St Andrews, the court held it will be an unusual case in which the source or extent of a respondent's assets or liabilities carries much weight when deciding whether it is just and equitable to require it to bear the cost of remediation.¹⁰ An associate cannot resist a building liability order simply by demonstrating that paying would hurt.

The inequality of arms argument failed for a related reason. The associates said ACL had been unable to defend the adjudication properly, having dis-instructed its experts and faced an accelerated timetable while its management dealt with the administration. The court's answer was that the group had made a commercial decision to ringfence ACL's liabilities rather than continue to invest in engaging with the underlying dispute, and had engaged in the adjudication as fully as its own commercial interests dictated. A choice not to defend is still a choice.¹¹

A choice not to defend is still a choice, and it is now a choice made on behalf of the whole group.

The judgment of 8 May 2026 is shorter and, for anyone advising a contractor group, harder reading than the main decision.¹² Permission to appeal was refused on all five grounds and leapfrog certification to the Supreme Court was refused. A stay of execution was refused, as was additional time to pay: the associates had not demonstrated any inability to pay, and the court held that even if insolvency were impending, a judgment debtor must face the usual consequences of that fact. Payment was ordered within fourteen days.

Interest was awarded at 5 per cent from 5 September 2025, the date of the application, on the basis that the order attaches to ACL's liability and that liability includes interest arising from non-payment of the decision. No separate order was needed to capture it, and the sum was held to be a debt rather than damages, so whether Crest had yet incurred the remedial costs was irrelevant. Crest recovered 100 per cent of its costs. The only point the associates won anywhere in the case was that a court may in principle transmit part of a liability rather than all of it, which was not enough to displace the general rule on costs.¹²

The Court of Appeal granted permission to appeal, with expedition given the importance of the issues, in the week of 11 June 2026. On the same day, five Ardmore trading businesses entered administration, among them one of the seven companies subject to the orders. Trade press reported around 500 staff affected and a group turnover of about £350m across roughly ten London projects. In August 2026 seven further group companies, five of them subject to the orders, launched company voluntary arrangement proposals as an alternative to administration.¹³

Those events are reported by the trade press rather than found by a court, and the causal claim made in some of the reporting, that the Act and the judgment brought the group down, is a proposition about a business and not a legal finding. The sequence is nonetheless the point. A single adjudication decision, in a process the responding company chose not to contest on liability, produced an immediately enforceable £14.9m obligation across a group, and the group's corporate response followed within ten weeks.

The appeal was pending as at the date of publication. Anyone relying on the analysis above should check its status: the Court of Appeal will decide whether an adjudicator's decision can found a building liability order, and whether an anticipatory order is properly made before trial. Both holdings could go. What will not change is the way the discretion was exercised, because that is a matter of weight on facts, and appellate courts rarely disturb it.

For a developer holding a defects claim against a contractor of uncertain solvency, the route is now short: adjudicate the substantive claim, including any Defective Premises Act claim, then apply under section 130 within the litigation. For a contractor group, three consequences follow immediately.

There is a drafting consequence too. Where a group is exposed to historic building safety liabilities, the identity of the contracting entity no longer determines the extent of the exposure, and parent company guarantees are no longer the outer boundary of who can be made to pay. That is a matter for corporate structuring advice as much as for construction lawyers, and the two are not usually in the same room.