The ability of the First-tier Tribunal (FTT) to make a remediation contribution order (RCO) under Part 5 of the Building Safety Act 2022 (BSA) is one of several powerful new remedies introduced by the BSA to deal with the building safety crisis arising from the Grenfell Tower tragedy. An RCO allows an interested party (which includes anyone with a legal or equitable interest in the building) to circumvent a complex network of contractual provisions and quickly obtain an order against a developer or landlord to meet the costs of remedying relevant defects. 

Appeal against remediation contribution order dismissed

In Triathlon Homes LLP v Stratford Village Development Partnership and Others, the FTT had ordered the developer, Stratford Village Development Partnership (SVDP), and Get Living, its parent company and also a company associated with the landlords, to pay approximately £18 million towards remediation costs. SDVP and Get Living appealed the decision on two grounds: (1) that it was not just and equitable to make the RCOs; and (2) that an RCO could not be made in respect of costs incurred before the relevant part of the BSA came into force on 28 June 2022. In what is likely to be a much quoted and very significant judgment in this area, the Court of Appeal unanimously dismissed both grounds of appeal. 

Purpose of the BSA will prevail

A clear trend is developing from the recent case law in terms of bringing to fruition the intent of the BSA. The decision, which swiftly follows the Supreme Court ruling in URS Corporation Ltd v BDW Trading Ltd (2025), makes it clear that in interpreting and applying the provisions of the BSA, the courts will have the purpose of the BSA firmly in mind. As highlighted by the Court of Appeal in Triathlon, the BSA was passed by Parliament to provide much needed protection to leaseholders of flats in high rise blocks who were "facing unprecedently high, and often unaffordable, service charge bills to pay for the costs of existing fire safety and structural safety defects". Having intervened in the contractual matrix of obligations by protecting leaseholders, it was then necessary for the BSA to stipulate who should pick up the costs that were no longer covered by the service charges and the rights those persons should have to make claims against others (including those ultimately responsible). 

Recent cases have made it clear that the regime under the BSA is about ensuring necessary remediation works are started as quickly as possible and the question of "who pays". This ruling reinforces the concept of a hierarchy or cascade of liability with the developer firmly at the top. The taxpayer (by way of the Building Safety Fund or other central government scheme) is to be regarded as the funder of last resort and should not be expected to provide interim funding if there is a party, with sufficient funds, that meets the requirements of an RCO. While the Supreme Court was at pains in URS v BDW to ensure that "onward" litigation should not be impeded, the Triathlon decision makes it clear that an RCO should be made if the requirements of s124 are met and should not await the outcome of other contractual or tortious claims which are likely to be lengthy, complex and expensive.

Background facts in Triathlon

Triathlon Homes LLP held long leasehold interests in the social housing in five residential blocks which formed part of the former athletes' village for the 2012 Olympics in Stratford in East London. The remaining privately rented units were owned by subsidiaries of Get Living Plc, a real estate investment trust. Get Living was also the wealthy parent company of the original developer of the blocks, SVDP. SVDP had initially been publicly owned (as it was incorporated by the Olympic Delivery Authority) but was later sold to private investors. In November 2020, the management company for the blocks (“EVML”), a company owned jointly by Get Living and Triathlon, discovered serious fire safety defects in relation to both the design and the construction of the external cladding. A remediation programme was commenced with the work funded by grants made to EVML from the Building Safety Fund. 

Triathlon applied for RCOs against SVDP (as the developer) but also against Get Living because it believed SVDP would be unable to comply with such orders from its own resources. It sought payments of over £16 million to EVML, representing Triathlon’s share of the total remediation costs, together with other additional costs incurred by Triathlon. 

Under s124 of the Building Safety Act 2022 (BSA), the FTT has jurisdiction, on the application of an "interested person", to make a RCO to require a current or former landlord or developer, or someone "associated" with them, to contribute towards the costs of remedying "relevant defects" in a "relevant building" if it is just and equitable to do so (terms defined in the BSA). There was no dispute that the requirements of an "interested person" (i.e., Triathlon), "relevant building" and "relevant defect" were met leaving the FTT to decide if it would be "just and equitable" to make an RCO. The FTT held that it was. (See our earlier article for further details.) The appeal, in effect, leap-frogged to the Court of Appeal, highlighting the importance of the issues to those embroiled in building safety litigation.

Appeal ground 1 - Just and equitable

SVDP and Get Living argued that the FTT erred in ten separate respects in concluding that it was just and equitable to make RCOs. In a well-structured judgment, the Court of Appeal addressed, and comprehensively dismissed, all ten arguments which are briefly summarised below:

Ground 1.1 – An unexpressed presumption

The Court of Appeal rejected the suggestion that the FTT had created a presumption that if the requirements of s124 were met and the developer/landlord had the means, then it would ordinarily be just and equitable to make an RCO. This was not what the FTT had said. Correctly, the FTT had been making the point that the policy of the BSA was to place primary responsibility on the developer. Further, the FTT had made it clear that, as between public funding and those listed in s124 as potential contributors to the costs of works, public funding was to be seen as a matter of last resort. The FTT were entirely justified in concluding that as between SVDP and Get Living on the one hand and the public purse on the other, it was difficult to see why the public should fund the works in the interim. However, the Court held that the FTT had perhaps gone "too far" by saying it was difficult to see how it could "ever" be just and equitable for a party meeting the requirements of s124 to claim that the works should instead be funded by the public purse and gave examples where it would not be just and equitable.

Ground 1.2 – Passing on costs to developers

It was argued that the FTT wrongly found that the policy of the BSA was that primary responsibility for cost of remediation works should fall on the original developer and that this was apparent from the Building Safety (Leaseholder Protections) (Information etc.) (England) Regulations 2022. The Court of Appeal accepted that the 2022 Regulations allocated costs between landlords and that neither SVDP nor Get Living could be liable under Regulation 3. However, the Court held that this did not undermine the reasoning of the FTT which it explained. The Court of Appeal reiterated that the policy of the BSA was that responsibility for costs should fall on the original developer and that others could pass on the costs they incurred to the developer.

Ground 1.3 – Motivation

It was not necessary for the FTT to resolve any issues as to Triathlon's motivation in making the application. In the absence of malice or bad faith, a litigant's subjective reasons for litigating are usually irrelevant to the merits of its claim. Nevertheless, the Court explained that there was an obvious reason for the application to be made by Triathlon rather than EVML, in that EVML had difficulty in making decisions due to the divergent interests of its shareholders and directors.

Ground 1.4 and 1.10 – Public purse

The Court of Appeal rejected the argument that an RCO should only be made if the funding agreement was not working adequately. The FTT was not wrong to conclude that if the fund was left to provide interim funding then it would be the underwriter of the risk and also to conclude that public funding was a matter of last resort. The purpose of the BSA was not only to ensure that works required are done but also to deal with the "who pays" question. The BSA provided a complex set of answers but did not contemplate that taxpayer funding would provide the solution to the problem. Instead it provides for costs to be allocated between those who have relevant connections to the building. Agreeing with the FTT, the Court of Appeal held that one discernible principle was that a developer responsible for the defect who retains an interest in the building should stand at the top of the hierarchy or cascade of those who will pick up the costs.

The fund stood outside the BSA and was not part of the hierarchy of those regarded by the BSA as potential funders of the costs which the leaseholders are relieved from meeting. It was right to characterise it as a last resort.

Ground 1.5 – Pursuing other claims

The FTT did not err in holding that there was nothing unfair in Triathlon taking advantage of its ability to apply for an RCO instead of pursuing other claims or potential claims available to it. There was no good reason why interim funding should be at public expense while claims against third parties were pursued. The FTT were therefore entitled to conclude that the interim funding should be provided by Get Living rather than the fund.

Ground 1.6 – The context of the applications to the fund

It was argued that the FTT had failed to take into account that the parties had, prior to the applications, been working on the basis that the remedial works would be funded through the fund. Triathlon had never promised that it would not apply for an RCO. There was nothing inconsistent in Triathlon on the one hand pressing for EVML to obtain public funding, and on the other then seeking an order that SVDP and Get Living cover what would have been Triathlon's share of the costs. The FTT had considered the public purse point and the fact that Triathlon and Get Living had cooperated in securing the funding was simply the context in which that issue arose.

Ground 1.7 – No expectation by the fund

The FTT was entitled to regard the willingness of public authorities to grant funding as a neutral factor. The funding provided was not an out-and-out grant and there was provision in the funding agreement for EVML to use all reasonable endeavours to pursue claims. The suggestion that pressing developers and investors too hard might discourage investment in the provision of new housing was quite speculative. The FTT were fully justified in concluding that the public interest in the fund being reimbursed was a strong reason in favour of making an RCO.

Ground 1.8 – The changing identity of the beneficial owners of SVDP and Get Living

The Court of Appeal held that the fact that the investors who were now the beneficial owners of Get Living were not the same as those who initially bought SVDP from the ODA was not relevant. If you invest in a company, you take the risk of unforeseen liabilities attaching to that company. The Court also dismissed the arguments that Get Living itself had no involvement in the development and that the development had been a public project from which the public had benefited. The Court held that FTT was entitled to reach the conclusions that it did.

Ground 1.9 - Terms of Grant Funding Agreement

It was argued that as the Funding Agreement prohibited a claim against a leaseholder by EVML and as Get Living fell within the definition of a leaseholder, this should be taken into account in deciding whether an RCO should be made requiring Get Living to pay costs to EVML. Again, the Court of Appeal was not persuaded and held that the clause only prevented EVML from pursuing leaseholders in their capacity as leaseholders. To find otherwise would mean that if a developer thought that it might be the target of an RCO, it could prevent such action being taken by buying a flat in the block in question.

Appeal ground 2 - Retrospectivity

The Court of Appeal agreed with the finding of the FTT that an RCO could be made for costs incurred before 28 June 2002 (when s124 of the BSA came into force). The Court referred to the comments made in the URS v BDW decision in which it was stated as Obiter that s124 had retrospective effect. There was no good policy reason why Parliament would have decided to "penalise" leaseholders whose landlords had acted responsibly and got on with repairs or to prejudice leaseholders who had discharged their service charge debts as opposed to those who had not. It was also relevant that s124 provided a "safety valve" against unfairness since an RCO could only be made if it was just and equitable to do so. 

Practical consequences of the decision

Although, the Court of Appeal in Triathlon has simply confirmed the decision and reasoning of the FTT, the judgment is significant as a further indication of the approach that will be taken by the courts in building safety litigation. Those who meet the criteria for a RCO to be made against them are likely to face an uphill battle in arguing that it is not just and equitable for an RCO to be made. It could not now be clearer that the developer is firmly placed at the top of the hierarchy of liability for building safety defects.

We can also expect more applications for RCOs to be made irrespective of the state of play reached in funding or carrying out the remediation works. The decision that the effect of s124 can be retrospective is likely to lead to further applications for RCOs to seek reimbursement or contributions from developers and their associates. Further, the confirmation that funding by the Building Safety Fund is a matter of last resort and should not be used as interim funding means that arguments that an RCO is not necessary as public funding is already in place will almost certainly fail.