High Court judge says Laing O’Rourke ‘commercially amoral’ as residents claim victory in £35m One Hyde Park dispute

A High Court judge has accused Laing O’Rourke of being “commercially amoral” in a judgement handed down as part of a long-running dispute between the contractor and residents of One Hyde Park over the cost of repairs to fix a series of defects at the luxury flats scheme in London.

Residents previously accused the contractor of “stringing them along” over repairs needed at the complex, which they claim will cost £35m to put right.

Among the issues that have hit the scheme, which overlooks Hyde Park and includes a £175m penthouse, are problems with the ductwork and corroding pipes.

Details about the dispute became public when O’Rourke chief executive Cathal O’Rourke wrote to clients last year saying that one of its dormant companies, Laing O’Rourke Construction South, which built One Hyde Park, was about to be shut. Companies House records show the firm went into liquidation on 28 February last year.

A hearing was held on 27 February last year at the T&C Court in London without representatives from Laing O’Rourke attending, with a judgement from Mrs Justice Jefford finally handed down today.

Two weeks before the trial started, O’Rourke’s solicitors wrote to the court stating: “We confirm that the defendant [Laing O’Rourke Construction South} is unable to continue financing the defence of the proceedings. Accordingly, we write to inform you that the defendant does not intend to participate in the trial.”

In her judgment, Justice Jefford wrote that the news came “as a complete surprise to the claimant [One Hyde Park Limited]” and added the claimant’s KC, Andrew Rigney, “described the claimant’s reaction to this news as one of shock and dismay. As he submitted, it was obvious that the Laing O’Rourke group could continue to fund the litigation and meet any judgment in damages. Publicly available information disclosed pre-exceptional group revenue for 2024 of £4bn and a ‘record order book’ of £10.8bn.

“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 [One Hyde Park Limited] 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.”

One Hyde Park was completed in 2009 and opened its doors two years later. Residents say they were forced to begin legal action in 2021 after failing to reach an agreement with the contractor over the repairs.

OHP owns the freehold of the building and is in turn owned by the residents.

The bulk of the residents’ claim, £34.4m, relates to pipework which they claimed had corrosion “caused by LOR’s failure, in breach of contract, properly to install” and which they claimed “needs to be removed and replaced”.

In her 22-page judgment, Justice Jefferd wrote: “OHP invited the court to find that the widespread corrosion experienced by the CHW [chilled water] pipework was caused by LOR’s systemic failure properly to install the phenolic foam insulation as alleged by OHP. That amounted to a breach of the Main Contract and thus of the Collateral Warranty. On the basis of the evidence adduced by OHP, I make that finding.”

Residents said they would continue to pursue all available legal and commercial avenues to recover their losses. An OHP spokesperson said: “Today’s ruling is a decisive victory for all the residents at One Hyde Park. We are committed to ensuring Laing O’Rourke is held fully accountable and makes full and fair payment for the construction defects it has been found responsible for.”

In a statement today, a spokesperson for Laing O’Rourke said: “We are aware that the defendant, Laing O’Rourke Construction South, spent almost a decade trying to find an amicable resolution to the issue with One Hyde Park’s management company, initiating extensive rounds of negotiations and making multiple offers of compensation, including an offer to undertake remedial work for free.”

In a statement issued last year, Laing O’Rourke said: “We were bitterly disappointed that, despite extensive negotiations, multiple offers of compensation and an offer to undertake remedial work for free, One Hyde Park’s management company continued to pursue a costly litigation process against Laing O’Rourke Construction South, a dormant subsidiary that had not traded since 2011 and had no assets.

“Sadly, this matter could have been resolved years ago if One Hyde Park’s management company had approached matters in a more professional and constructive manner.”