Section 132 of the Building Safety Act 2022 (‘BSA’) allows parties to apply for Information Orders (‘IOs’) to obtain necessary information or documents about companies associated with a liable party, and are intended to enable the applicant to decide whether to apply for a Building Liability Order (‘BLO’) in order to enforce that liability against an associated company. The application of s.132 was recently considered in detail by His Honour Judge Keyser KC, sitting as a Judge of the High Court, in the case of BDW Trading Limited v Ardmore Construction Limited & Others [2025] EWHC 434 (TCC).
The Facts
BDW Trading Ltd ("BDW") had engaged Ardmore Construction Ltd ("ACL") to design and construct five separate multi-unit residential developments. Following completion, BDW identified serious defects related to fire safety and/or structural issues at each of the developments, and agreed to meet the cost of necessary remedial works. BDW's acceptance of responsibility prompted it to make claims against ACL under: (i) the Defective Premises Act 1972 ("DPA"), on the basis that ACL had breached the duties owed under the DPA in circumstances where the developments were unfit for habitation; and/or, (ii) by way of contribution to BDW's liability to the building and apartment owners.
In our previous update (Adjudication and the Building Safety Act: BDW Trading Limited v Ardmore Construction Limited [2024] - DWF) we discussed how BDW successfully pursued ACL through adjudication in relation to one of the developments, with ACL being found liable under the DPA. Following successful enforcement proceedings ACL paid the adjudication award to BDW.
Liability, however, remained in dispute in relation to the other four developments, with BDW pursuing ACL in separate arbitration proceedings in relation to two of the developments, and in separate pieces of litigation for the other two. BDW concluded that ACL itself was unlikely to have sufficient assets to meet its alleged liabilities and wanted to explore other potential enforcement targets. BDW sought IOs against each of the four companies within the Ardmore group of companies, with a view potentially to seeking BLOs against them in due course, namely:
- ACL itself;
- R2, a company which wholly owned ACL;
- R3, a company which wholly owned R2; and
- R4 (the ultimate parent company), which wholly owned R3
Against whom could the Information Order be sought?
In considering BDW's application, the Court first reviewed the relevant provisions of the BSA, along with the Explanatory Notes to the Act, and, in particular, focused on two examples in the Explanatory Notes drafted to explain the intended operation of BLOs and IOs.
The second example suggested that a prospective BLO applicant could seek an IO against the suspected parent company of a since dissolved single-purpose vehicle development company (which was apparently subject to a relevant liability), in order to obtain the necessary information the prospective claimant needed to decide whether to seek a BLO against that parent company sharing the liability of the dissolved SPV.
The Court reviewed the wording of s.132 and came to the view that the second example in the Explanatory Notes was incorrect. The Court emphasised that, on the wording of s.132, IOs can only be made against the body corporate that has the relevant liability itself (the "original body"), and that (notwithstanding the example given in the Explanatory Notes) IOs cannot be made against the associated companies of that original body.
As such, the Court held that BDW's application for IOs against R2 – R4 failed; whilst those companies were potentially associated with ACL, they were not alleged themselves to be subject to a relevant liability. Any IOs, if appropriate, could only be made against the original body, which in this case was ACL itself.
The Criteria for Making an Information Order
Having clarified which company could be the subject of an IO, the Court stressed that an IO may only be issued "if it appears to the Court" that the particular body corporate "is subject to a relevant liability", and also that it is appropriate for the applicant to require the information be provided for the purpose of enabling the applicant to make or consider seeking a BLO.
BDW was alleging (in both litigation and arbitration) that ACL was subject to a relevant liability, however ACL disputed this. Whilst it was agreed by the parties that the power to make Information Orders did not require there to have been a prior finding of a relevant liability, for an IO to be made it did however need to appear to the court that the company in question was "subject to a relevant liability"; but what did that assessment require?
The Court was careful to stress that applications for IOs should not become protracted, with detailed exchanges of liability evidence for example (especially when liability remains in issue in the underlying disputes). The Court noted that:
"Applications under section 132 ought … to be short and uncomplicated, and I do not consider that they impose on the court any obligation to become embroiled in assessments of the merits of disputed matters. If this means that applications for information orders will be made sparingly in cases where liability is in issue, I cannot see why that is a bad thing."
As the liability found by the Adjudicator in relation to the first development had been paid in full, there was no relevant liability in relation to that first development which could be used to ground the making of an IO.
The Court noted that, whilst it appeared that ACL may have a relevant liability to BDW in relation to one or more of the other four developments which were the subject of ongoing proceedings, it could not go so far as to say that it appeared that it actually had such a liability. It was not sufficient for these purposes that BDW's claims against ACL were supported by expert technical and legal opinion, or, as BDW submitted, that because the claim in adjudication had been successful, by extension there was likely to be a liability in relation to at least one of the other four developments. Further, the Court was not prepared to draw an adverse inference from ACL's refusal to allow certain arbitration documents to be adduced as evidence at the hearing, nor from the fact that ACL had made substantial provision in its account for liabilities for the cost of remedial works on various unidentified previous projects.
Since it did not appear to the Court that ACL had a relevant liability, BDW's application for an IO to be made against ACL had to fail.
What information can be sought?
Having concluded that BDW's application would fail, the Court nonetheless expressed a view on the scope of the documentation which BDW had sought. The Court stated it would only make an IO for provision of specific material needed to identify a potential target company as an associate of ACL and/or to assess its financial viability to consider whether it was worthwhile applying for a BLO. Any material ordered for production must be material that the company with the relevant liability itself had – in this case, documents which were in the possession of ACL itself, or to which it was entitled. To the extent that any of the information or documents being sought were publicly available, the Court thought it hard to see why an IO would be appropriate.
BDW had sought a wide range of commercially sensitive documents, including cash flow forecasts, management accounts, asset registers, banking arrangements, details of ongoing contracts, and group security arrangements. The Court considered that the scope of information sought went beyond what would usually be required without sufficient justification, and entered into the realms of commercially sensitive material.
As such, the Court would not have ordered the provision of such documents, even if it were minded to make an IO.
Discussion
When the BSA became law, significant concerns were raised around the new powers it granted to make BLOs and IOs. Whilst these remain radical developments in the law, the decision in BDW at least suggests that IOs may not be as radical as had been feared. It seems unlikely that any IOs that are made will require a wide range of documents to be produced.
A claimant will need to overcome several hurdles before an Information Order will be made. Given the nature of these hurdles, particularly that an IO can only be made against a company appearing to be subject to a relevant liability, IOs are unlikely to be as common as might have originally been thought where liability is disputed.
We have previously questioned whether the new regime under the BSA might lead to less use of SPVs going forward. However, if IOs cannot be made against companies associated with a now dissolved, but potentially liable SPV, then perhaps reports of the demise of the SPV have been greatly exaggerated. This may impact both legitimate corporate restructurings and potential contribution claims that members of the project team may wish to make to share DPA liability.
