Adjudication enforcement and insolvency: key lessons from Laing O’Rourke v Shepperton Studios

The Judgment of Wimbledon v Vago [2005] EWHC 1086 (TCC) established the principle of an entitlement to a stay of execution of a judgment in enforcement proceedings in circumstances where a claimant is in insolvent liquidation, or if there is no dispute on the evidence that the claimant is insolvent.

This principle was relied upon in the recent TCC decision - Laing O’Rourke Delivery Limited v Shepperton Studios Limited [2026] EWHC 612 (TCC), where Laing O’Rourke Delivery Limited (“LOR”), sought to enforce an adjudication decision (the “Decision”) against the Employer, Shepperton Studios Limited (“Shepperton”). Shepperton sought a stay of execution of any judgment in favour of LOR on the basis that LOR was insolvent, and continued to trade only by the support, continued from time to time, of its parent. Shepperton submitted that there was every risk that if the Decision was enforced, that LOR would be unable to repay.

In seeking to avoid a stay of execution being granted, LOR’s Barrister gave an oral undertaking that LOR would repay any monies awarded in any judgment in ongoing Part 8 proceedings. Thereafter, LOR’s Commercial Director provided an undertaking in writing.

Notably, the undertaking included a denial as to the impecuniosity of LOR. The basis for such a denial was evidence led from the Laing O’Rourke Group’s European Finance Director, who submitted that LOR had a growing pipeline of work, and that its financial position had improved since the last filing of accounts.

Despite the above, the Court held that the undertaking and LOR’s growing pipeline of work was insufficient to displace the starting position in Wimbledon v Vago, that if a claimant is in insolvent liquidation or there is no dispute on the evidence that the claimant is insolvent then, a stay of execution will usually be granted. The evidence led concerning the growing pipeline of work and improved financial position relied, at least in part, on future projections and on unverifiable extracts from management accounts. The Court further held that the undertaking, offered by LOR (and not a Laing O’Rourke Group company), was, on its own, insufficient, not least on the basis that it was not in issue that LOR itself was dependent on support from other companies within its group.

Notwithstanding the above, the Court moved to consider that Shepperton had the benefit of a Parent Company Guarantee, provided by Laing O’Rourke Corporation Limited, which irrevocably and unconditionally guaranteed to Shepperton the due and punctual performance of all of LOR’s obligations, warranties, duties and undertakings under the Building Contract.

Submissions were advanced by Shepperton that recent conduct of the LOR Group of companies was such that it could not rely on the continuing existence of the parent company guarantee – see One Hyde Park Ltd v Laing O'Rourke Construction South Ltd - however the Court’s view was that the “commercially amoral” conduct referred to in that case would only be directly relevant in circumstances where a subsidiary was trading only with the support of a parent and no other source of recovery was available to the party contracting with the subsidiary. That was not the case here, where Shepperton had the benefit of the parent company guarantee.

The Court thus held that the existence of the parent company guarantee displaced the starting point of an entitlement to a stay of execution.

The decision in Laing O’Rourke Delivery Limited v Shepperton Studios Limited reinforces that the principles in Wimbledon v Vago remain firmly embedded in enforcement proceedings where insolvency is in play. If a claimant is insolvent, a stay of execution will usually follow unless there is a clear and compelling reason to depart from that starting point.

The judgment also draws a sharp distinction between reassurance and security. Undertakings given by an insolvent contractor, even when supported by evidence of an improving pipeline or future prospects of work, are unlikely to be enough to displace the starting point. The court will instead focus on whether there is a real, enforceable route to repayment.

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