Who bears the risk?: Legal and forensic perspectives on Building Liability Orders

Clients typically weigh a number of factors before deciding not to pursue a BLO. A common concern is the belief that a claim cannot progress where the original developer or contractor is insolvent. In practice, BLOs are specifically designed to address this issue by enabling claimants to look beyond the original entity and, where appropriate, pursue associated companies within the wider group.

Other frequent concerns include the availability and quality of evidence, particularly where projects are historic and limitation periods are approaching or have been extended. Clients may also worry about whether relevant documents have been retained and can be retrieved efficiently.

Cost is another key consideration. Like any formal legal action, BLO claims require a cost–benefit analysis. However, recent case law has provided greater clarity around how courts approach BLOs, which may give clients increased confidence when assessing the potential merits and proportionality of pursuing a claim. Importantly, BLO claims do not always need to begin with full court proceedings; in some cases, adjudication may offer a more cost‑effective starting point.

Preparation is critical. You can significantly strengthen your position by reviewing and, where necessary, improving document retention policies, ensuring that key contractual, technical, and corporate records are collated and accessible.

For those managing large or complex portfolios, adopting a consistent approach across schemes can be particularly valuable. Developing a standardised contract or scheme audit template can help focus attention on the information that matters most when assessing potential liability and viability.

From a strategic perspective, you should also consider whether initial dispute resolution steps, such as adjudication, might help clarify liability or strengthen their negotiating position. Ultimately, the more robust the evidence and the clearer the understanding of both the original contracting party and its associated companies, the better placed you will be to assess options, including litigation, mediation, or settlement.

Yes. Legal costs can be significant, and funding should form part of any early strategic discussion. Third‑party litigation funding is increasingly used in complex construction and building safety disputes, allowing funders to cover some or all of the legal costs in return for a share of any successful recovery.

This can be particularly attractive for those with constrained budgets or those seeking to manage financial risk, as it effectively shifts legal spend off balance sheet. In addition, insurance products, such as after‑the‑event (ATE) insurance, may also be available to manage adverse cost exposure.

For those with substantial or high‑value claims, alternative funding arrangements are often worth exploring alongside traditional budgeting approaches.

Assessing suitability starts with understanding the legal conditions set out in section 130 of the Building Safety Act. You should consider whether your building and the relevant defects fall within the statutory categories of ‘relevant liability,’ which extend beyond fire safety issues and include a wider range of building safety defects.

A structured audit approach can be helpful here - working through the legal tests as a checklist and measuring the facts of each scheme against them. This assessment then moves into consideration of whether it would be ‘just and equitable’ for liability to be extended to associated companies.

While this concept can seem abstract, recent case law and the underlying policy intent of the legislation provide important guidance. The regime is underpinned by the principle that those responsible for defects should bear the cost of remediation, protecting leaseholders and, in many cases, freeholders. Forensic analysis of corporate structures, financial relationships, and control can play a critical role in informing this assessment and supporting or challenging a BLO application.