The Building Safety Act: 2024 in review

As we hit the ground running in 2025, Daniel Searle looks back at some of the key developments of the Building Safety Act (“BSA”) in 2024 and opines on where we may be headed in the future.

Building Liability Orders

Wilmott Dixon Construction Ltd v Prater and others [2024] EWHC 1990 (TCC)

Whilst we are yet to receive guidance from the Court as to how the “just and equitable” test will be considered and determined, the TCC in this case provided helpful guidance as to the procedural aspects of seeking a Building Liability Order (“BLO”).

The matter concerns a claim by Wilmott Dixon for nearly £47 million against a range of defendants and arises from allegations that the design and construction of the external walls at Love Lane, London pose a fire-safety risk. The Fourth Defendant, Aecom Infrastructure and Environment UK Ltd, issued Part 20 proceedings against four Lindner Group companies seeking BLOs. These additional claims were brought owing to concerns about the financial deterioration of Prater Limited (the specialist envelope sub-contractor) and Lindner Exteriors Holding Limited (Prater’s guarantor) and their ability to meet a contribution claim. This in itself is novel; most would have assumed that s130 would be used by claimants seeking to join parent and sister companies of defendants; in this case however, the s130 was brought by a defendant against companies associated with a co-defendant in order to secure a contribution from them (the BSA is silent on who may apply for a BLO and Jefford J in Wilmott Dixon noted that she was not deciding the question of whether a defendant could apply for a BLO. Accordingly, there may be further consideration of this issue in the future).

The four Lindner group companies applied to have the BLO claims stayed until after judgment in the main claim had been handed down. The application for the stay was made on the basis that it would be unfair to have both the primary matter and consideration of the BLO to be heard at the same time, given that the main claim could either be withdrawn or dismissed, leading to a waste of costs for the BLO defendant. However, Jefford J dismissed the application for a stay and held that it was “sensible and efficient” to hear the claims together, determining that:

1. There was no stipulation in the BSA that an application for a BLO must be brought at the same time as the main claim.
2. However, if an application for a BLO is to be made, it would be appropriate to join the BLO defendant to the main claim to progress both matters together, in the interests of time and costs. That is because:
   1. Consideration by the Court of the BLO claim would usually involve a consideration of the underlying facts of the main claim and it would be unsatisfactory for the Court to review the evidence twice.
   2. It would give the BLO defendant an opportunity to actively participate and consider the evidence in the main claim at the same time as it was being considered by the Court. Further, that by affording a BLO defendant the opportunity to be involved in the main claim, the Court could later avoid argument that it was not “just an equitable” to make a BLO or that the liability was not a “relevant liability”.
   3. The concept of a BLO as a contingent claim is no different from other contingency-based claims such as those for contributions or those involving guarantees.

Accordingly, as a general rule, if an application for a BLO is contemplated, it is correct for the associated company to be a party to the main litigation and for both claims to be dealt with at the same time. Further, it would appear that as a point of practice, by including an associated company in the main claim, claimants will be less likely to be concerned about arguments raised by the associated company that it was not “just and equitable” to make the order or that the liability was not a relevant liability.

As a point of substance (set apart from the procedural aspects discussed above), Jefford J also noted during submissions that there was no requirement for dishonesty or intentional asset stripping on the part of a BLO defendant before a BLO could be made; a BLO could be made where there was an entirely innocent dissipation of assets.

381 Southwark Park Road Rtm Company Ltd & Ors v Click St Andrews Ltd (in liquidation) & Anor [2024] EWHC 3179 (TCC)

Moving ever closer to the Court substantively considering an application for a BLO, we have now received the first judgment (handed down on 11 December 2024) whereby liability was found to be a “relevant liability” for the purposes of s130.

The claim was brought by leaseholders of 381 Southwark Park Road (together with their residents’ right to manage company) and alleged that certain works were in breach of a Freehold Purchase Agreement and that there had been breach of s2A of the Defective Premises Act 1972. The First Defendant, Click St Andrews, was a Special Purpose Vehicle which, at the time of the relevant events and the trial, owned the freehold and head lease of the property and was a wholly owned subsidiary of the Second Defendant, Click Group Holdings.

Although a BLO based on a building safety risk (as defined by s130(6)) was not initially pleaded, Jefford J permitted the Claimants to pursue their application for a BLO and re-confirmed her conclusions in Wilmott Dixon (above), stating that:

“The Building Safety Act says little about the procedure to be adopted by a party wishing to seek a BLO but it certainly does not require a party to make that claim within existing proceedings. It would be surprising if it did since the circumstances in which it might be just and equitable to make the order may not arise until after proceedings to establish a relevant liability are concluded and a BLO could be sought against a corporate body that did not even exist at the time of those proceedings. Where it is already in contemplation that an order will be sought against a particular associated company, it seems to me sensible and efficient for that claim to form part of what might be called the main proceedings, as is, in effect, the case here. But that does not preclude a subsequent claim for a BLO against some other associated company.”

In respect of the substance of the claim, Jefford J found that serious fire safety concerns existed (including inadequate compartmentation between flats, failure to use fire-stopping materials and the presence of combustible materials in voids), together with structural defects (including inadequate bearing support for some of the steel beams creating a risk of partial collapse) which potentially affected the building’s stability and posed a risk to safety. The findings of Jefford J confirmed that the liability of Click St. Andrews related to a building safety risk, fulfilling the requirements for a “relevant liability” under s130(3)(b) of the BSA. This opens the door for the Claimants to pursue a BLO against Click St. Andrews or a related company. The matter will now be listed to hear argument as to whether the making of a BLO is just and equitable and for any consequential orders.

Remediation Orders

Secretary of State for Levelling Up, Housing and Communities v Grey GR Limited Partnership [2024] 4 WLUK 558

The Vista Tower case was the first legal action brought by the Government under powers introduced through the BSA. The Government brought a claim seeking a Remediation Order (“RO”) against Grey GR following delays in remedying multiple serious fire safety issues which had been discovered in 2019.

By the time of the final hearing, Grey GR had entered into a contract for remedial works and works had already begun. The Respondent argued that a test akin to that applied in specific performance claims (i.e. whether the making of the order was necessary or desirable) should be applied and, given that building works had already commenced, it was neither necessary nor desirable to make an RO. The Tribunal disagreed with the Respondent’s approach and held that: “The focus [of a remediation order] is not on providing redress for non-compliance with a legal obligation (as with damages or specific performance), but on remediation of life-threatening building safety defects in tall residential buildings. In particular, if the pre-qualification criteria set out in section 123 apply and there are relevant defects, we [the FTT] consider that it is likely that the tribunal will make an order, subject to the facts of each case”. The Tribunal made an RO, expressing that the order would afford “backstop to give reassurance” to the leaseholders (who were party neither to the building contracts nor the grant funding agreement) given that any breach of the order may be punishable as contempt of court pursuant to s123(7).

Leasehold and Freehold Reform Act 2024 (“LAFRA”)

LAFRA (the relevant provisions of which were brought into force on 31 October 2024), introduced new and important changes and clarifications to s123 BSA. The reform introduced the concept of “relevant steps”, allowing claimants the opportunity to claim not only for an order that the relevant defect be remedied, but also for an order that the relevant landlord take “relevant steps”, by virtue of the insertion of s123(2)(b). “Relevant steps” include both interim and temporary measures and are defined at s120(4A) as those steps which have as their purpose:

1. Preventing or reducing the likelihood of a fire or collapse of the building (or any part of it) occurring as a result of the relevant defect;
2. Reducing the severity of any such incident; or
3. Preventing or reducing harm to people in or about the building that could result from such an incident.

“Relevant steps” can accordingly include waking watch fire safety patrols, Simultaneous Evacuation Alarms, improving Automatic Opening Ventilation systems and other similar provisions. Given that the definition of “relevant steps” still has ambiguity, we anticipate further litigation contesting, for instance, what actions may be included in “preventing or reducing harm to people in or around the building”.

In addition to “relevant steps”, section 123(8) and (9) now clarifies the scope and enforceability of a direction issued by the FtT in relation to an expert report to establish the extent of the defects (or potential defect) and the works required.

Of note is the fact that the amendments apply retrospectively; any consideration as to whether to apply to amend pleadings already in the Tribunal system should of course be had sooner rather than later.

Remediation Contribution Orders

Triathlon Homes LLP v Stratford Village Development Partnership and others [2024] UKFTT 26

The Upper Tribunal (sitting as the FtT) in this case handed down the first judgment ordering a Remediation Contribution Order (“RCO”) under s124 of the BSA. The application concerned five residential buildings in Stratford, originally constructed as part of the Olympic Village. Triathlon is the long leaseholder of all the social and affordable housing in the blocks. The blocks were developed by the First Respondent, SVDP, which is owned by Get Living (though SVDP was not so owned at the time of the construction). Get Living also owns the long leases to all the private rented housing in the blocks. Serious defects were discovered in November 2020 and remediation works had commenced at the time of the application.

There was no issue that the pre-qualification criteria were met. The principal issue between the parties was whether it was “just and equitable” to make an RCO. In granting an RCO, the Tribunal considered it relevant to its determination, inter alia, that:

1. RCOs are essentially non-fault-based remedies and were created as an alternative to other fault-based claims which a party may be able to make in relation to defects.
2. An important factor was that it is the policy of the BSA that primary responsibility for the cost of remediation should fall on the original developer, here SVDP.
3. It was no answer that the remedial works were being funded by the Building Safety Fund, such funding was “a matter of last resort, and should not be seen as a primary source of funding where other parties, within the scope of section 124, are available as sources of funding”.
4. The availability to the applicant of other claims would not disqualify the making of an RCO.
5. In circumstances where the developer would be unable to comply with an RCO in any significant sum without the financial support of its parent, it would be just and equitable to make an order against the parent company; such an order would be entirely in-keeping with the intention of the BSA and the association provisions thereof.

An appeal has been lodged in respect of some of the findings in Triathlon, the appeal of which is scheduled to be heard no later than 6 May 2025.

Leasehold and Freehold Reform Act 2024

In a similar vein to the amendment to the sections governing Remediation Orders, s124(2A)(a) makes clear that a Remediation Contribution Order can include costs incurred or to be incurred in taking “relevant steps” in relation to the relevant defect. S124(2A)(b) also clarifies that the costs incurred or to be incurred in obtaining an expert report relating to the relevant building will constitute “costs” for the purposes of s124(2).

Importantly, s124(2A)(c) makes clear that claims can also be made for the associated costs of alternative accommodation where residents are decanted from relevant buildings (i) to avoid an imminent threat to life or personal injury arising from a relevant defect in the building; (ii) (in the case of a decant from a dwelling) because works relating to the building created or are expected to create circumstances in which those occupying the dwelling cannot reasonably be expected to live; or (iii) for any other reason connected with relevant defects in the building, or works relating to the building, that is prescribed by regulations made by the Secretary of State. As per the definitions section at s124(5), the costs which can be claimed include: (a) the costs of the temporary accommodation; and (b) other costs resulting from the decant, including removal costs, storage costs and reasonable travel costs.

Daniel Searle is a barrister at Deka Chambers.