Residents of the UK's most expensive development were awarded approximately £35 million in damages for defects after the defendant withdrew from the proceedings on the eve of trial.
Background
A claim arose from defects identified at the UK’s most expensive luxury residential development, One Hyde Park (the “development”).
In June 2007, the defendant, Laing O’Rourke Construction South Ltd (“LOR”), was appointed by the original developer, Project Grande (Guernsey) Limited, under a JCT Standard Form of Building Contract with Contractor’s Design (1998 edition) to demolish the site and construct the development (the “main contract”).
LOR entered into a collateral warranty in 2010 in favour of the claimant, One Hyde Park Ltd (“OHP”), warranting its performance of the main contract in accordance with its terms.
The development was completed in January 2011, and the freehold interest was transferred to OHP in June 2014.
Between late 2014 and 2017, OHP identified defects in the building’s mechanical, electrical and plumbing systems. OHP claimed losses as freeholder due to its repairing obligations under the superior lease and the underleases.
Following lengthy unsuccessful negotiations, OHP issued proceedings in 2021 in the Technology and Construction Court (“TCC”) seeking £53.6 million for alleged breaches of the main contract and the collateral warranty. The claim centred on defective design, workmanship, and material selection. LOR disputed the allegations.
By early 2025, the parties had fully prepared for a February 2025 trial. However, shortly before it was due to begin, LOR entered creditors’ voluntary liquidation and unexpectedly withdrew from the proceedings stating it was unable to fund its defence.
LOR is a dormant subsidiary of Laing O’Rourke plc, which had, up until the point at which it entered liquidation, provided financial support to LOR. OHP submitted that the group withdrew support because OHP was likely to succeed and obtain a substantial damages award and went on to describe such conduct as "commercially amoral". Publicly available information indicated group revenue of £4 billion in 2024 and a “record order book” of £10.8 billion, with no evidence of financial difficulty within the group.
Decision
Judgment was handed down on 2 February 2026 following a TCC hearing on 27 February 2025.
The TCC proceeded in LOR’s absence and struck out its defence under CPR 39.3. However, applying AMNS Middle East v LIQS PTW, the judge declined to enter default judgment and OHP still had to prove its case albeit against no opposition.
The TCC was critical of LOR's late withdrawal. In the absence of any evidence of group‑wide financial difficulty, Mrs Justice Jefford accepted the submission that the group’s withdrawal can be explained by the likelihood of OHP succeeding at trial and obtaining a substantial damages award and agreed that such conduct was "commercially amoral".
With no opposition, the TCC accepted OHP’s evidence on all heads of claim and found breaches of both the main contract and the collateral warranty.
The court held LOR liable for the defects complained of and awarded the costs of the remedial scheme (circa £35 million) , and a projected ten‑year remediation programme.
Key takeaways
The TCC's findings on liability were strikingly broad. The TCC concluded that the development suffered pervasive and systemic failures in installation and material selection.
The decision reinforces the importance and long‑term enforceability of collateral warranties in major residential developments, underscoring the extended exposure contractors face long after practical completion.
Procedurally, the judgment highlights the robust approach the courts will take to a defendant who withdraws from proceedings before trial. Here all of LOR's expert evidence was held to have no evidential value and OHPs evidence was accepted in full.
Whilst OHP and the residents have obtained a substantial award against LOR, this is unlikely to be the end of the road for them due to LOR's liquidation. In a statement issued following the judgment, OHP said it will continue to pursue all legal and commercial remedies available. From a legal standpoint, leaseholders, developers and contractors will be watching closely to see how OHP deploys the remedies introduced by the Building Safety Act 2022, particularly Building Liability Orders, which allow claims to be extended to ‘associated entities’ such as group companies, in certain circumstances.
