The Building Safety Act 2022 (the “BSA”) introduced significant reforms to enhance building safety and hold responsible parties accountable for defects. Two of the key remedies under the BSA are Building Liability Orders (BLOs) and Remediation Contribution Orders (RCOs).
This article explores these orders, their purposes, and the landmark cases of Southwark Park Road RTM Company Ltd and others v Click St Andrews Ltd and another [2024] EWHC 3179 (TCC) and Grey GR Limited Partnership v Edgewater (Stevenage) Limited and others [2024].
Building Liability Orders (BLOs)
BLOs were introduced to address the issue of developers and contractors using complex corporate structures to evade liability for building defects. Many developers set up asset specific subsidiary companies or special purpose vehicles (SPVs) with minimal assets to undertake projects. Once complete, these entities are often dissolved, leaving no assets to satisfy any liability for defects claims.
S.130(1) of the BSA allows the High Court to make a BLO requiring the rectification of defects if it considers it “just and equitable to do so”.
Liability under a BLO may extend the liability of e.g. the original developer to its associated entities making them jointly and severally liable for the relevant liability. This ensures that claimants can seek compensation from multiple entities, even if one or more of them have been dissolved.
Southwark Park Road RTM Company Ltd and others v Click St Andrews Ltd and another [2024] EWHC 3179 (TCC)
This case concerned damage to a block of flats at St Andrews House, London arising from defective works carried out by the previous owners and considered whether:
- the Claimants (the residential leaseholders and the Right to Manage (RTM) company) was entitled to a BLO against the previous owner (Click St Andrew) and an associated company;
- Whether the Claimants could establish breaches of duty under section 2A of the BSA;
- The implications of the Freehold Purchase Agreement (“FPA”) between the RTM and Click St Andrew under which Click St Andrew would construct a new storey to the building following which the freehold would be transferred to the RTM with long leases being granted to Click St Andrew.
- The extent of damages recoverable by the Claimants on behalf of the leaseholders.
The Claimants argued that a BLO should be granted due to breaches related to building safety risks, specifically those concerning structural integrity and fire safety.
It was contended that Click St Andrew failed to fulfil its obligations under the FPA, particularly that it had not completed the necessary works and had not served a completion notice, which affected the rights of the leaseholders .
Ultimately, the court accepted there was a “relevant liability” and granted a BLO against Click Group Holdings, an associated company of the original Defendant, which was in liquidation. The court found it just and equitable to extend liability due to the significant fire safety and structural defects identified in the building.
It was determined that breaches of the FPA, particularly the failure to adequately protect the structure during renovation works, led to water ingress and other damages.
The decision has provided crucial judicial guidance on the interpretation of “relevant liability” and the conditions under which a BLO can be granted. It also demonstrates the court’s willingness to pierce the corporate veil to ensure accountability for building safety where it is “just and equitable” to do so.
Information Orders
The Claimants in the Southwark Park Road case were also awarded the first Information Order under s.132 of the BSA.
An Information Order:
- can be applied for by any person making, or intending to make an application for a BLO;
- requires a specified body corporate to give specified information or documents to associates of the body corporate; and
- can be made if the body corporate is subject to a “relevant liability” and the information or documents are required to enable the applicant to make or consider making an application for a BLO.
Remediation Contribution Orders (RCOs)
RCOs may be awarded under s.124 of the BSA by the First-tier Tribunal (FTT) on the application of an interested person (including persons with a legal or equitable interest in the building, the local authority or fire service and the Building Safety Regulator) in relation to a relevant building if it considers just and equitable to do so.
If granted, an RCO may require the current landlord (or a previous landlord as of 14 February 2022), the original developer and any “associated persons” to contribute towards the cost of rectification works to remedy relevant defects to a relevant building. These costs may also include obtaining experts’ reports and the cost of temporary accommodation.
Grey GR Limited Partnership v Edgewater (Stevenage) Limited and others [2025] FTT
In this case, Grey GR (the landlord) applied to the FTT which granted RCOs against Edgewater (the original developer) and 75 associated companies (principally through common directorships) ordering payment for a raft of rectification and fire-safety works amounting to c.£13 million.
The respondents’ arguments that the defects identified were not “relevant defects” for the purposes of the BSA and that it would not be “just and equitable” to make RCOs were dismissed.
The FTT concluded that, given the respondents’ poor record keeping and their failure to fully explain the complex corporate structure, it was “just and equitable” to make the RCOs and to do so on a joint and several basis.
This is the first major RCO application to be decided since the case of Triathlon Homes LLP v Stratford Village Development Partnership and others [2024] UKFTT 26 (PC) in which the FTT found that any measure that causes a building defect to cease being a relevant defect, or which is part of a larger programme of measures for that purpose, is capable of being the subject of an RCO. An RCO is therefore not limited to the costs of remedying relevant defects but can extend to preventing building safety risk.
The FTT’s decision therefore highlights the willingness to hold all relevant parties accountable for building safety, regardless of their corporate structure. It also provides guidance on the definition of “relevant defects”, what is meant by “just and equitable” and the scope of recoverable costs.
If you are looking for any further advice with Building Liability Orders, Information Orders, or Remediation Contribution Orders please contact our Construction & Engineering team for tailored guidance.
