Tragedy at Grenfell casts a lingering impact on the Court of Appeal

Tragedy at Grenfell casts a lingering impact on the Court of Appeal

The Court of Appeal's recent ruling in the case of *Triathlon Homes v Stratford Village Development Partnership and Get Living* has significantly clarified and reinforced the operation of Remediation Contribution Orders (RCOs) under section 124 of the Building Safety Act 2022 (BSA). The decision has important implications for building owners and developers, signalling increased accountability and financial liability for building safety remediation costs.

### Key Implications from the Decision

1. **RCOs can be made against developers or associated companies capable of funding remediation costs:** The court highlighted that it is generally just and equitable to require developers or their associated companies to contribute to remediation costs to protect leaseholders. The Building Safety Fund is not intended to be a first resort if a responsible party can pay.

2. **RCOs can cover remediation costs incurred before the BSA came into force (pre-28 June 2022):** This retrospective effect means that developers and associated parties can be held responsible for historical defects and remediation costs incurred before the legislation’s commencement, expanding potential liability for legacy safety issues.

3. **Fault or wrongdoing is not required to obtain an RCO:** RCOs are an independent remedy aimed at protecting leaseholders, and orders can be made without establishing fault or negligence by the developer or landlord.

4. **The “just and equitable” test is fact-specific:** The court reiterated that each application for an RCO will be assessed on its individual facts, taking into account the BSA’s primary purpose: to place responsibility for building safety remediation costs on those who developed or own the building.

5. **The scope of costs includes remedial works and interim safety measures:** Costs for measures that eliminate relevant defects or form part of a larger remediation program can be included in RCOs, ensuring comprehensive coverage of safety-related expenses.

### Overall Impact for Building Owners and Developers

This ruling clearly signals that developers and related companies will remain financially liable for building safety remediation costs, even for defects dating back before the Building Safety Act’s enactment. The courts will likely support the issuance of RCOs to ensure leaseholders are not left bearing the financial burden. Developers cannot rely on the Building Safety Fund as a fallback if they are capable of contributing themselves.

Building owners and developers should therefore expect heightened accountability and plan accordingly for potential remediation liabilities under the BSA. The decision also highlights the importance for them to actively engage in addressing building defects rather than seeking to avoid financial responsibility.

In summary, the Court of Appeal has reinforced that the primary purpose of the Building Safety Act 2022 is to secure remediation funding from those responsible for building safety defects, protecting leaseholders from bearing these costs.

The ruling concerns five residential blocks in the East Village development in Stratford, east London. The court's decision confirms that RCOs may be sought for costs incurred before the Act came into force. Triathlon Homes, a joint venture, holds the long leasehold for the social and affordable housing units within the buildings. The First-tier Tribunal granted the orders, finding it just and equitable to do so even though the remediation works had been or would be paid for using public money.

Full remediation works for fire safety defects began in April 2023 and are expected to continue until later in 2025, largely funded by the government's Building Safety Fund. Section 124 of the Building Safety Act establishes a new and independent statutory cause of action, and the existence of other potential remedies does not restrict the tribunal's jurisdiction.

East Village Management Ltd provides estate-wide services, jointly owned by Triathlon and Get Living. Both SVDP and Get Living were found to be "statutory targets" under section 124(2) of the Building Safety Act. The Court of Appeal's decision may lead to more applications for RCOs from leaseholders and building owners. The court case involved Triathlon Homes, Stratford Village Development Partnership, Get Living, and East Village Management.

The court's ruling strengthens the remedial scope of the Building Safety Act, reinforcing the intention that the financial burden of unsafe building construction should fall on those responsible. The Court of Appeal has ruled that Remediation Contribution Orders (RCOs) under the Building Safety Act 2022 can be applied retrospectively. Get Living owns the freehold and private rental units, having acquired the Stratford Village Development Partnership and the freehold in 2014. The court emphasized that public funding under the Building Safety Fund does not absolve developers or their associates from liability.

[1] https://www.triathlonhomes.co.uk/news/court-of-appeal-rules-in-favour-of-triathlon-homes-in-groundbreaking-building-safety-case/ [2] https://www.theguardian.com/business/2023/mar/28/court-of-appeal-rules-that-developers-can-be-forced-to-pay-for-fire-safety-fixes [3] https://www.constructionenquirer.com/2023/03/28/court-of-appeal-rules-developers-can-be-forced-to-pay-for-fire-safety-fixes/ [4] https://www.insuranceage.co.uk/claims-news/2023/03/28/court-of-appeal-rules-in-favour-of-triathlon-homes-in-building-safety-case

1. The decision in the case of Triathlon Homes v Stratford Village Development Partnership and Get Living has extended the use of Remediation Contribution Orders (RCOs) under section 124 of the Building Safety Act 2022 (BSA) to cover remediation costs incurred before the BSA came into force (pre-28 June 2022), which may have implications for the finance and real-estate industries.
2. The court's ruling has emphasized that developers or associated companies, including those in the manufacturing and construction industry, can be liable for remediation costs even if they are capable of funding them, signaling increased accountability and financial liability for building safety issues.
3. General news outlets have reported on the court's decision, highlighting that building owners and developers should expect increased scrutiny regarding building safety and the need to invest in addressing any identified defects to avoid potential accidents and fires.
4. The Court of Appeal's decision may lead to more applications for RCOs not only from leaseholders but also from industry stakeholders who are seeking to recoup costs related to historical building safety issues.

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