Spreading responsibility for building safety

In January 2024, the First Tier Tribunal division of the court published its decision in the building safety case of Triathlon Homes LLP and Stratford Village Development Partnership and others. This is one of the first major cases regarding new rights of action provided for under the Building Safety Act 2022 (BSA) by which liabilities for building safety risks can be enforced not just against the original developer, but also against other corporate entities associated with the developer.

The BSA is a substantial piece of new law seeking to better regulate building safety standards and to give new rights to those who are affected by unsafe building practices. It was enacted in response to the Grenfell Tower fire tragedy in 2017 when 72 residents lost their lives as a result of a fire which spread through that block of flats due to unsafe exterior cladding. Notably, the BSA applies much more widely than to just tall tower blocks of the Grenfell Tower type.

Under Part 5 of the BSA, where it considers it ‘just and equitable’ to do so the court can issue a number of types of order against the party originally responsible for the risk along with associated corporate entities of that party, making them together jointly and severally liable. A building safety risk is defined as a risk to the safety of people in or about the building arising from the spread of fire, or the collapse of the building or any part.

An associate could be a parent company or other corporate entity which is connected to the responsible party through its ownership or control structure. An associate can be made the subject of such a ‘Part 5’ order, even where it only becomes associated with the original responsible party after the safety risk liability arises.

Specifically, Part 5 applies in regard to what are called ‘relevant buildings’ – meaning a building in England which is at least 11 metres high or 5 storeys and which contains at least two dwellings – for buildings in Wales the definition criteria is the same, but with only one contained dwelling being required.

The intention is that rather than having a building safety risk claim fail because it is discovered that the original responsible party has been wound up following completion of the project, or because the responsible party is insolvent, liability for the risk can now be extended to associated parties.

In the Triathlon Homes case, the buildings in question are five blocks of flats originally built in Stratford to provide accommodation for athletes attending the London 2012 Olympic Games. The buildings were developed by the first defendant in the action; Stratford Village Development Partnership. They later ended up as a mixture of private and affordable accommodation for new occupiers. Some of the affordable accommodation units are owned by the claimant, Triathlon Homes, and some of the private units are owned by Get Living Plc, the second defendant.

The third defendant, East Village Management Ltd, is a company jointly owned by Triathlon and Get Living and is responsible for the repair and maintenance of the structure and common parts of what is known as the East Village zone of the development.

Following the Grenfell Tower fire, investigations of the Stratford buildings discovered serious fire safety defects relating to the design and construction of the cladding systems. This included the presence of combustible insulation and breather membranes, inadequate firestopping, the use of combustible timber decking on balconies and the absence of cavity barriers and firestopping systems.

Initially, emergency monitoring measure – including a ‘waking watch’ – were implemented. Later, a first phase of remediation works was undertaken with further works programmed to provide for the remediation of all of the blocks by August 2025. The remediation work is being funded by grants made available from the public Building Safety Fund. The total cost of the works is put at £24.5 million.

Part 5 of the BSA allows for a different type of order in regard to liabilities for building safety risks. The Triathlon Homes claim was for a particular Part 5 order for what is called a ‘remediation contribution order’. Triathlon sought such an order to obtain reimbursement of expenditure in regard to the interim fire safety measures and for investigative and preparatory works.

The Triathlon claim sought a remediation contribution order to be made against the first and second defendants in the amount of over £16m. This was to cover its expenditure already incurred, or to be incurred by Triathlon in remedying the relevant defects.

Although the works had been the beneficiary of the public purse via the Building Safety Fund, Triathlon Homes argued that this funding was at risk of being withdrawn. Its action was for the cost or the works to be paid for by the defendants as developer and as associated company in order to secure funding.

Triathlon Homes’ case included that the BSA legislation created a hierarchy or cascade of liability with the original developer where a relevant building safety risk liability has been established.

The First Tribunal accepted the Triathlon Homes claim. As to what costs a remediation contribution order can apply to, the Tribunal stated that this could include costs incurred in preventing risks materialising and in regard to a liability for building safety risk costs incurred before the commencement of the BSA.

Therefore in the Stratford case, the costs to Triathlon Homes of the replacement of the combustible cladding was covered, as were the expenses of the waking watch monitoring and other risk preventative measures. It was also decided that any payments made in relation to a contribution order can be made in favour of any third party identified in the order, and so not necessarily a party to the case. This is to enable an award in favour of a party who has actually incurred the building safety risk costs.

This article only gives a brief summary of what was a long case decision by the First Tribunal, but the outcome of the Triathlon Homes claim helps us to appreciate some of the significant new law introduced under the BSA. There is though much in regard to the BSA which is still to be clarified.

For example, in regard to Part 5 of the BSA, just what is meant by “just and equitable” as the essential criteria for a Part 5 order? As the First Tribunal said, beyond the obvious meaning the question of what that criteria requires means that determination in each case will be down to the discretion of the court on each occasion.

As with much else of this new law, we can expect future cases on a range of BSA subject areas over time which will help us when it comes to an understanding of the new building safety regime which is now on the statute books.