Major UK construction company Ardmore has entered administration after a landmark High Court ruling in April ordered it to pay £14.9 million under the Building Safety Act. The company, incorporated in 1974, includes Ardmore Hotels & Commercial, Ardmore Major Projects, Ardmore Fitout, Landmark Facades and Ardmore Regeneration.
The administration took effect on June 11, following what the company described as the profound impact of a recent court order. Earlier this year, the Technology and Construction Court ordered Ardmore Group to pay a Building Liability Order (BLO) under the Building Safety Act, relating to the Admiralty Quarter project in Portsmouth, which completed in 2009.
Background of the Building Liability Order
Ardmore Group was the parent company of Ardmore Construction Ltd, which acted as lead contractor on the Admiralty Quarter development. After Crest Nicholson, the project's developer and leaseholder, took legal action, Ardmore Construction Ltd was ordered to pay a substantial sum. However, the company entered administration the day before the court order was issued, meaning it avoided paying the penalty.
This case has become an important example in the application of the Building Safety Act, which strengthens accountability for construction defects. The legislation allows liability to extend beyond a single insolvent contractor to other companies within the same corporate group, meaning affiliated businesses could also be required to address or pay for historic building safety issues.
Impact on Operations
In a statement, Ardmore said the judgment had affected client confidence, payment terms and certified values across a number of live projects, materially affecting the construction group's ability to continue trading in the normal way. The company clarified that while the broader Ardmore Group has not gone into administration, it has instead applied for a moratorium. This process will enable the business to continue its operations temporarily while it assesses and reviews its financial position.
The statement added: "This step is intended to allow Ardmore to continue preparing its appeal against the BLO judgment. Earlier this week, Ardmore was granted permission to appeal to the Court of Appeal, with the court also granting expedition, given the importance of the issues raised."
Company Response and Future Plans
The firm said that it believed the appeal raises issues of wider public importance for the construction industry. A spokesperson for Ardmore said: "This is a deeply disappointing outcome for the construction group, its employees and its stakeholders. Our focus is now on preserving value in the wider group, protecting the continuing businesses where possible, and pursuing the appeal against a judgment which we believe raises important questions for the wider industry."
The administration affects Ardmore's construction group entities, but the parent company is using the moratorium to restructure and pursue the appeal. The case highlights the far-reaching consequences of the Building Safety Act, which was introduced to improve accountability for building safety defects following the Grenfell Tower tragedy.
