Forsters has advised BlueFive Private Wealth on the sale of SYSTEMS, a landmark office building in Brook Green, West London, to JD.com, a leading supply chain-based technology and service provider. The c.127,000 sq ft building will become JD.com’s UK headquarters.
SYSTEMS is one of West London’s most distinctive office buildings, with a history spanning almost a century. Originally constructed in the 1930s, the building is known as the birthplace of the world’s first business computer, from where it derives its modern name.
Forsters has been involved throughout the asset’s transformation. Our specialist Construction team advised on the extension and redevelopment of the building, including a two-storey extension to the top of the building and a three-storey extension to the rear.
The recent redevelopment was led by General Projects and designed by Buckley Gray Yeoman. The project preserves the building’s architectural heritage while transforming it into a workplace destination focused on sustainability, technology and occupant wellbeing. The redevelopment increased the building’s net internal area by almost 50% and delivered a range of occupier amenities, including communal terraces, cycle facilities, showers and locker rooms, with the building designed to achieve BREEAM Excellent and EPC A ratings.
The recent TCC decision in Crest Nicholson Regeneration Limited (Crest) v Ardmore Construction Limited (ACL) marked a significant development in the application of the Building Safety Act 2022 (BSA). For those not familiar with the background, we suggest reading our colleague Isabella Cleary-Moyland’s article here. In brief:
Crest engaged ACL to build a residential development in Portsmouth;
Fire safety defects were discovered in the external wall system following post-Grenfell investigations;
Crest successfully referred the dispute to adjudication and were awarded £14.9m;
ACL entered administration the day before the decision was made and did not pay the £14.9m;
Crest applied to the Court for, and were subsequently granted, Building Liability Orders (BLOs) against associated companies within the contractor’s group, making them jointly and severally liable for both the adjudication award and any liabilities later established against ACL.
The judgment significantly reshapes the risk profile for construction projects by confirming that liability for building safety defects can extend beyond the contracting entity to other companies within the same corporate group. This is likely to have a number of practical implications as parties shift towards more cautious, group-wide risk management and greater emphasis on financial robustness and accountability across the supply chain, rather than reliance on corporate separation alone.
Group Structures & Risk
BLOs can be made against entities associated with the original contracting entity. Given the broad circumstances under which an entity can be considered an associate of the original contracting entity, contractors and developers will rethink the use of special purpose vehicles (SPVs) or group restructuring to ringfence liabilities for construction projects.
Contractual Rights for Group Companies
The decision emphasises the need for developers to include provisions in building contracts to ensure that their wider group has rights of action against contractors, to provide some potential recourse in the event an entity in the wider group becomes liable under a BLO. Contractors may seek to do the same in their sub-contracts.
Stronger Emphasis on Group Financial Standing
Potential claimants (developers in particular) may increase their focus on the financial standing of their counterparty’s wider group of entities, as the certainty regarding what entities they may be able to claim against in the event of a building safety defect increases.
Proactive Dispute Management and Compliance With Adjudication Decisions
With the ruling that decisions reached via adjudication can be a “relevant liability” under the BSA to which a BLO may apply, parties may take a more proactive approach to resolving issues early to avoid exposure to their group. Further, there is likely to be more willingness for parties found liable for building safety defects in adjudication decisions to comply with the adjudicator’s decision, given that winding up the original contracting entity may not be of any benefit to the wider group, making delay and resist strategies against robust claims less attractive.
Retentions: The Government hasn’t “held back” on plans to ditch retention payments
The Government has announced plans to ban the use of retention payments in construction contracts. It has been dubbed as one of the most ambitious overhauls of payment practices in over 25 years. The proposal was unveiled by the Department for Business and Trade on 24 March, as part of a wider drive to tackle late payment practices that are said to cost the UK economy around £11 billion each year.
If implemented, the ban would prevent employers and main contractors from withholding a percentage of payments as “retention” to be released later, typically at the end of the defects period.
Why is it happening?
The primary driver behind the proposed ban is cashflow protection, particularly for SMEs and specialist sub-contractors. As retentions are often unsecured, they are frequently irrecoverable where an upstream contractor becomes insolvent, enters administration, or where an employer or main contractor simply fails to release funds.
By removing retentions altogether, the intention is to reduce insolvency risk in the supply chain, improve payment certainty, and protect smaller firms that are least able to absorb losses.
That said, the announcement raises as many questions as it answers – particularly around how employers will incentivise contractors to make good defects and how performance security will be managed without them.
What impact could this have?
The proposed ban could have wide‑ranging commercial and practical consequences across the industry, including:
Greater defects and quality risk for clients Retentions are currently the simplest and lowest‑cost leverage available for employers to encourage contractors to return and remedy defects after practical completion. This has been accepted in the industry as crucial in securing contractor performance obligations. Industry bodies have warned that removing this incentive may weaken the drive for quality, make defects harder to resolve post‑completion, and leave clients – particularly smaller or one‑off developers – more exposed.
More tension during projects Without a post‑completion financial “hold‑back”, and to offset the risks of there being issues with quality and defects, employers and project managers may challenge valuations of interim payments more vigorously, which seemingly may have the opposite intended effect of the proposed ban, and is likely to cause more tension during the carrying out of works. Employers and project managers may also look to tighten up certain requirements to achieve practical completion or, if it is known that there are concerns with quality, then ensure that quality issues are raised earlier and more robustly. All of which have the potential to lead to a less collaborative behaviours on projects and, in the short term, increase the risk of disputes.
A shift towards alternative security arrangements By removing the ability to withhold funds, employers and funders will need to consider alternative means of securing contractor’s post-practical completion obligations. The surety market will need to respond to these demands. Alternatives such as retention bonds (already the most viable alternative to cash retentions), performance bonds and/or parent company guarantees may become more common, but these come at a cost and may not be accessible or affordable for all contractors.
Changes to pricing and procurement and risk allocation Contractors may need to price differently to reflect increased risk and performance security costs, while funders and developers may take a more cautious approach to contractor selection.
Attempts to work around the ban There is a recognised risk that parties may try to replicate the economic effect of retention through back‑loaded payment schedules, milestone payments or aggressive valuation practices. The Government has indicated that anti‑avoidance measures are likely, but how effective these will be remains to be seen.
Updates to legal drafting The absence of retentions could also lead to tighter contract drafting, including, as mentioned above, more prescriptive practical completion requirements. Industry bodies may also need to consider changes to their standard forms.
Conclusion: a major shift, but market must adapt
The proposed ban marks a significant shift from a commercially market-accepted principle within construction contracts. Many in the industry will welcome the move as a long‑overdue step to protect cashflow and reduce insolvency risk across the supply chain, particularly for those best placed to suffer from the loss of retentions.
At the same time, retentions have long played a practical role in incentivising performance and safeguarding build quality. Removing them without ready-made alternatives risks creating further problems, including higher costs, increased disputes, and greater pressure on completion and certification processes.
Whether this reform proves to be a net benefit for the industry will depend largely on how the market adapts – including the availability of affordable alternative security, and how effectively anti‑avoidance measures are enforced.
For now, clients would be well advised to review their standard contracts and consider risk allocation and security strategies early, ahead of further consultation and implementation. The days of “holding back” may be numbered – but what becomes accepted in the market as a retention replacement, will be more important.
In Crest Nicholson Regeneration Limited v Ardmore Construction Limited [2026] EWHC 789, the TCC handed down one of the most important Building Safety Act decisions to date, granting two Building Liability Orders (BLOs) against companies associated with an insolvent contractor.
What happened?
Crest Nicholson Regeneration Limited (Crest) engaged Ardmore Construction Limited (ACL) to design and build a residential development in Portsmouth. Post‑Grenfell investigations identified serious fire safety defects in the external wall system. Crest referred the dispute to adjudication. The adjudicator held that the defects amounted to breaches of the Building Regulations and the Defective Premises Act 1972 and awarded Crest £14.9m. ACL entered administration the day before the decision was made and ultimately did not pay.
The application
Crest applied for:
an anticipatory BLO, making ACL’s associated companies jointly and severally liable for any liability later established against ACL; and
an adjudication BLO, making those associates liable for the unpaid adjudicator’s award.
The decision
The Court granted both BLOs, holding that:
BLOs can be made before trial, even where liability is disputed;
An adjudicator’s decision can be a “relevant liability” under the Building Safety Act;
ACL’s insolvency, group restructuring to ring‑fence liabilities, and the associates’ long‑standing knowledge of the claims all pointed strongly towards it being just and equitable to make the orders; and
The Court had a “high degree of confidence” that ACL would ultimately be found liable for the defects.
Why this matters?
Associated companies can face early exposure, even before liability is finally determined.
Corporate restructuring and insolvency will not prevent liability being passed up to the group.
In September 2024, the Grenfell Tower Inquiry published its final report which made 58 recommendations based on its findings and in our original article we looked at some of the key recommendations affecting the construction industry. We now take a look at the Government’s response to two of those recommendations:
to review the definition of Higher-Risk Buildings; and
to convene an advisory panel to produce an authoritative statement on the knowledge and skills to be expected of a competent fire engineer.
Review of the definition of Higher-Risk Buildings
The concept of a Higher-Risk Building (“HRB”) was introduced by the Building Safety Act 2022 (“BSA”) which contains onerous obligations governing the design, construction and occupation of HRBs.
In England, the current definition of an HRB is a building which:
is at least 18 metres in height, or has at least 7 storeys;
contains at least 2 residential units; and
does not comprise entirely of a secure residential institution, a hotel, or military barracks, and does not contain military accommodation.
For Part 3 of the BSA (design, construction, and building work to existing higher-risk buildings), hospitals and care homes are HRBs, but, under Part 4 (in-occupation duties), they are not.
As part of the review of this definition, the Government directed the Building Safety Regulator (“the Regulator”) to carry out a review of the key factors in the HRB regime and their implications. Following consideration of the available evidence, the conclusion published in December 2025 was that the original definition “still seems focused on the appropriate categories of buildings”, and that an increase to the scope of the HRB regime at this time would not be right. It was also noted that the definition of HRB, and the associated regime, has only been in operation since April 2024 and so it is still early to say whether it needs to be changed, albeit it is already having a positive impact on buildings within its scope.
Despite this, the Government and the Regulator acknowledged the importance of work to protect vulnerable residents as well as the evolving risks of the built environment and agreed that the Regulator will operate a process for ongoing risk-based review of the definition.
The conclusion is in quite stark contrast to the Inquiry’s finding that defining an HRB by reference to height is unsatisfactory and arbitrary, with the nature of its use and the presence of vulnerable people being more relevant than height. The material tension between the ideal approach, and an approach that is workable in practice, is manifest in this result, and it seems the Government has fallen on the side of practicality so as not to further stifle development in the UK, particularly in the residential sector.
Authoritative statement
In response to this recommendation, the Government appointed a panel comprised of eight of the foremost experts, which produced the authoritative statement in December 2025.
The panel set down the following definition for a fire engineer:
“Fire engineers are professionals who develop and deliver engineering solutions that protect people and mitigate harm to the built and natural environment in the event of fire.”
The statement observed that there is no single recognised pathway to becoming a fire engineer, which leads to variation in the qualifications and skills of those operating as fire engineers. Further, ethical standards are inconsistently defined and monitored, and engineering principles are not always effectively applied, which leads to issues with delivery and poor confidence in the profession.
The statement confirms the panel’s support for the Government’s intention to regulate both the title and function of fire engineers and required legal restrictions on the use of the title of fire engineer. Further, statutory regulation should define the functions and activities that can be performed only by an individual who is registered and has met specific requirements. The preparation of the fire strategy should be a protected function, as that is the fundamental core of a fire engineer’s work. In the absence of an existing authoritative definition of what a fire safety strategy is, the statement sets out the panel’s view on what a fire safety strategy should include, and notes that “In delivering the fire safety strategy, the role of the fire engineer is fundamentally one of integration. The fire engineer acts as the link between multiple disciplines”.
The Government has achieved a robust delivery of this recommendation, with the panel’s statement and the Government’s intentions being aligned, which will hopefully motivate the Government. The stumbling block will be the timeline for the Government to turn intention into reality, and whether the practical reality of the huge demand for fire engineers will lead to the Government diverging from the panel’s statement and its current intention.
