One Hyde Park: Claim upheld
The High Court has accused a leading construction company of being “commercially amoral” for putting a subsidiary into liquidation to seemingly avoid paying out on a claim.
Mrs Justice Jefford struck out [1] Laing O’Rourke Construction South Ltd’s (LOR) defence and went on to find that it owed the claimant more than £35m in damages.
The claim was brought by One Hyde Park Ltd (OHP), freeholder of a luxury block of flats in central London – where one apartment is currently on sale for £175m – over severely corroded pipes that it claimed were not properly installed.
Jefford J said OHP’s case was that negotiations to settle its complaints started in 2016. “OHP came to the view that LOR was simply seeking to delay the inevitable and in 2021 these proceedings were commenced.”
She recounted how LOR had been preparing for trial – it served evidence, its experts participated in joint meetings and it attended the pre-trial review at the end of 2024.
“It, therefore, came as a complete surprise to the claimant and to the court” when in February 2025, LOR’s solicitors, Pinsent Masons, told the court that the company was unable to continue financing the defence and did not intend to participate in the trial.
A few days later, Pinsent Masons informed the court that LOR’s sole shareholder, Laing O’Rourke PLC, had passed a written resolution to place it into creditors’ voluntary liquidation.
As Andrew Rigney KC, counsel for the claimant submitted, Jefford J went on, “it was obvious that the Laing O’Rourke group could continue to fund the litigation and meet any judgment in damages”. Publicly available information showed group revenue for 2024 of £4bn and a “record order book” of £11bn.
“There was no evidence before the court of any financial difficulty of Laing O’Rourke PLC or the group as a whole.
“Mr Rigney submitted that the only credible reason for the group withdrawing support from the defendant was that it had formed the view that OHP was likely to succeed and obtain a substantial award of damages and that Laing O’Rourke PLC, in my words not his, had decided to pull the plug on the defendant rather than honour its contractual obligations.
“He described such conduct as commercially amoral and I agree, not least against the background of protracted negotiations and full participation in the litigation virtually to the door of the court.”
The judge went on to proceed in LOR’s absence and struck out its defence. She found on the uncontested evidence that the widespread corrosion experienced by the chilled water pipework was caused by LOR’s “systemic failure” to install insulation properly, in breach of contract and warranty.
The cost of remedial work was almost £34.5m and Jefford J also ordered LOR to pay a further £700,000 for other remedial work.
Photo: Rob Deutscher Follow – Flickr, CC BY 2.0, https://commons.wikimedia.org/w/index.php?curid=48061265