The Triathlon case and Building Liability Orders: A Growing Risk to Developers and Contractors?
Building Liability Orders (BLOs) have introduced a significant shift in how liability for building safety defects can be pursued, weakening the protections traditionally afforded by using Special Purpose Vehicles (SPVs).
What is a BLO?
A BLO is a High Court order introduced under the Building Safety Act 2022 (BSA) that extends liability for building safety defects from a body corporate (the “Original Body“) to an associated company. BLOs allow the court to override the principle of separate legal personality and impose joint and several liability on associated companies if it is just and equitable to do so.
BLOs are primarily aimed at preventing insolvent or asset-light SPVs from evading responsibility for serious building safety failings.
Requirements for a BLO
In order for a BLO to be granted, the following elements must be established:
- Relevant Liability
The liability must relate to:
- the Defective Premises Act 1972 (DPA),
- section 38 of the Building Act 1984, or
- a building safety risk (e.g. fire spread or structural failure).
Limitation periods under the DPA have been significantly extended. Claims for buildings completed before 28 June 2022 can now be brought within 30 years, and for those completed after this date, within 15 years.
- Associated Company
Under s131 of the BSA, a body corporate is associated with another if:
- one controls the other (e.g. Company A owns more than 50% of share capital in Company B, or Company A has the power to control the majority of voting rights in Company B), or
- both are controlled by a third entity.
Control can be direct or indirect. For example, if Company A controls Company B, which in turn controls Company C, then Company A may be treated as associated with Company C for the purposes of a BLO.
- Just and Equitable
The court must also be satisfied that it is just and equitable to impose a BLO. This requirement was explored in 381 Southwark Park Road RTM Co Ltd v Click St Andrews Ltd [2024] EWHC 3179 (TCC).
In the Southwark case, a BLO was granted despite the associated company (Click Group Holdings Ltd) not being particularly wealthy. The key factor was the original SPV’s lack of assets, reinforcing that the financial state of the Original Body is a central consideration.
The court referenced the case of Triathlon Homes LLP v Stratford Village Development Partnership [2024] UKFTT 26 (PC), where the First-tier Tribunal (FTT) noted that the BSA was intended to prevent well-capitalised parent companies from hiding behind underfunded SPVs to avoid liability. The Triathlon case concerned an application for Remediation Contribution Orders (RCOs) however provided useful insight into how the court may deal with the ‘just and equitable’ and ‘association’ tests.
The Court of Appeal’s Decision on Triathlon
The judgment in Triathlon Homes LLP v Stratford Village Development Partnership [2025] EWCA Civ 846 was handed down by the Court of Appeal on 8 July 2025. The CoA dismissed Stratford’s appeal and upheld the RCOs made against Stratford and its associated company, Get Living PLC.
The CoA confirmed that it was just and equitable to impose liability on both entities, rejecting arguments that Get Living’s acquisition of Stratford, which took place after practical completion of the relevant building, shielded it from responsibility. The decision clarifies that the association test under the BSA captures both direct and indirect control and that subsequent corporate changes will not undermine accountability.
Importantly, the Court also confirmed that the availability of public funding (such as the Building Safety Fund) does not preclude the making of an RCO, and that such orders can apply retrospectively to costs incurred before section 124 of the BSA came into force.
While Triathlon concerns an RCO rather than a BLO, the Court’s reasoning on the ‘just and equitable’ test and the interpretation of association provisions is relevant. It highlights the willingness of the courts to fully engage with the policy aims of the BSA to ensure that associated companies cannot avoid liability by running technical or timing-based arguments.
Takeaways
Developers and Contractors should be aware of the risks associated with the new legislation, with the use of SPVs no longer acting as a robust shield against potential building safety defect liabilities.
For those looking to acquire or invest, the case law reinforces the importance of thorough due diligence. A company that appears to be free from potential liabilities itself could still be exposed to later claims through its association with other body corporates.
The risk landscape has evolved – a relevant liability may not just fall with the Developer or Contractor, but anyone sufficiently associated to them if it is just and equitable for such liability to be shared.
