Round Up – How is the Building Safety Act currently being applied by the Court?

Whilst there were many unanswered questions, uncertainties and raised eyebrows as to how the Act would first be interpreted and applied by the court,  we are now starting to see a steady stream of court decisions relating to the Act with some of the questions and uncertainties now being resolved.

In this article we review the key cases which show how the judiciary is currently applying the principles and new remedies established by the Act.

In this case, the Department of Levelling Up, Housing and Communities (“the DLUHC”) sought to obtain a Remediation Order against Grey. Remediation Orders are a new remedy which an ‘interested person’ can pursue under the Act in order to compel landlords to carry out building rectification works. Grey was the landlord and owner of the property in question (a residential tower block) which had a number of building safety issues.

Grey had already commenced the remedial works by the time the case was heard in court, and so Grey sought to argue that a remediation order was not necessary. However, the court used its discretion and granted the remediation order ‘as a backstop’ in order to give reassurance to the occupiers/leasehold owners that the necessary remedial works required at the property would be satisfactorily completed.

This case demonstrates the DLUHC’s proactive approach to seeking and enforcing Remediation Orders under the Act, and ensure that leaseholders are not left with the responsibility of having to address the issues associated with unsafe buildings themselves.

This case may be a rather scary one for construction professionals and demonstrates the court’s approach when applying the Act to historic buildings.

As a result of changes introduced by the Act, the time limit (or limitation period) for bringing claims in respect of defective works relating to a dwelling under section 1 of the Defective Premises Act 1972 are now as follows:

• 15 years for claims relating to the construction of a dwelling completed after 28 June 2022;
• 30 years for claims relating to the construction of a dwelling completed before 28 June 2022 (plus a 12 month ‘buffer’).

In this case the property in question had been built in May 2014 and so the Claimants were therefore still able to pursue the main contractor and Architect for defects in the construction of the property even though it had been built more than 6 years ago.

The Claimant’s claim related to defects in the glass balustrades, which defects the Claimants contended posed a threat to occupants’ health and safety and so rendered the property unfit for human habitation, in breach of section 1(1) of the Defective Premises Act 1972.

In summary, the court found that:

• The Claimant could bring a claim under the new extended limitation period.
• The defective glass balustrade was sufficient to render the property unfit for human habitation and therefore damages could be awarded as a result of this.
• The Architect was held responsible for failing to warn the Claimants that the type of glass balustrade installed by the Contractor did not comply with the type specified. This is despite correctly specifying and designing what was required.
• Damages under the Defective Premises Act 1972 were not restricted to what would be the minimum necessary to put dwelling back into habitable condition, but rather the “cost of making the dwelling fit for habitation in the way it would have been had the services been supplied in a professional manner.” The court also indicated that a defect which is only aesthetic is unlikely to be considered one which renders a dwelling unfit for habitation.

This case provides useful insight into how the courts are approaching claims made under the Defective Premises Act 1972,  which are now increasing in frequency by virtue of the extended limitation periods afforded by the Act.

This case concerned external walls and cladding to a development at Love Lane, London.  The leaseholder claimants were pursuing damages in excess of £47m, against a number of defendants. This is one of the first cases relating to a request for a Building Liability Order (“BLO”), newly created under s. 130 of the Act.

The purpose of a BLO is to give interested parties a right of action against companies “associated” with the company originally responsible for the building safety risk in question i.e. the building company or developer.  A BLO makes the associated company jointly and severally liable with the original building company. As is often the case when an action could be brought, the original building company would be dissolved or the Claimant would have no contractual or tortious relationship with the defendant, thereby leaving no party for prospective Claimants to pursue. Obtaining a BLO was therefore enacted to circumvent this and ensure interested parties had a chance of recovery against ‘associated companies.’

Whilst most cases have to date involved a Claimant requesting a BLO, this case involved one of  the defendants requesting a BLO against two of its co-defendants.

The twoco-defendant companies were , Prater Limited (“Prater”) and Lindner Exteriors Holding Limited (“Lindner”),. The defendant seeking the BLO was concerned that they had been attempting to dispose of assets and so wanted to obtain a BLO against them in order to secure an effective contribution from them towards any liability it might have to the Claimants

Prater and Lindner argued that the claim for a BLO should be paused (i.e. stayed) until the issue of liability to the Claimants had first been resolved.

Ultimately, the court ruled in favour of the applicant defendant. It declined Prater and Lindner’s application for a stay and imposed the BLO sought by the applicant defendant against them.

The interesting aspect of this case concerns the court’s approach when deciding whether to impose a BLO:

• Firstly, the Court held that it would be ‘just and equitable’ under the Act to impose a BLO on Prater and Lindner as related companies even if the disposal of assets had been innocent and not intended specifically to divert funds away from the Claimants.
• Secondly, a Party seeking a BLO is not obliged to bring its claim at the same time as the primary claim against a related company however, if it did, the claim should be heard and dealt with at the same time.

It was not the case that a BLO claim could only arise against and/or be made if the company facing the primary claim has failed to pay it. The primarily liable party’s failure to pay is not a pre-condition for the  granting of a BLO against another associated party.

This is the first occasion in which the Court of Appeal has considered the Act. It is particularly relevant to those claims in proceedings which were issued prior to the commencement of the Act, but which may now be captured by the provisions of the Act.

In this case BDW appealed against the lower court’s decision but the Court of Appeal upheld the findings in the original judgment. In summary, the court found the following important principles:

• Developers can both owe and, more importantly be owed a duty of care under the Defective Premises Act.
• The cause of action in tort against construction professionals with design responsibilities (where there is defective design) accrues when practical completion of the building is achieved and not when the defect in design was discovered.
• A developer can make a claim for contribution from a responsible party even if no claim has yet been made against them. It does not matter that the developer has no proprietary interest in the development at the time the remedial work is carried out.
• Statements of case could be amended to rely on the Act (and the new limitation periods for pursuing a claim under the DPA), even where the proceedings in question had been commenced before the Act came into force.

In light of the abovelegal practitioners would be well advised to re-consider the nature of any claim for building defects made in proceedings that have already been issued to see whether the claim might also be covered by the provisions of section 1 of the Defective Premises Act.

If the claim is one which might also be covered by the provisions of section 1 of the Defective Premises Act then it might also be worthwhile amending the statement of case to incorporate these provisions and by doing so potentially add to the merits of the claim.

This was the first case to consider applications for a Remediation Contribution Order (RCO).

RCOs are a new remedy introduced by section 124 of the Act.  In short, an RCO is a non-fault based order aimed at protecting leaseholders against having to pay for the costs of remediation work necessary as a result of the use of defective or unsafe materials in building works, such as cladding.

Triathalon was a long leasehold owner of five social housing blocks. It applied for an RCO against the developer of the housing blocks and its associated parties.

Triathlon’s application was successful and the case is of interest as it provides pointers as to the court’s approach when considering what costs can be recovered under an RCO and, more particularly guidance on how the court will apply the ‘just and equitable’ test required by the Act.

So far as recoverable costs is concerned, the court held that an RCO has retrospective effect and can be awarded for not only costs incurred since the Act came into force but also for costs incurred before the Act came into force.

Until this case, there was little to no guidance from the Act on what how the courts should decide what is ‘just and equitable’.  Section 124 of the Act permits applications for RCOs against not only developers but also those companies associated with the developers. The purpose of this is to avoid developers hiding behind the corporate veil. Whilst each application for an RCO will be fact specific, the Tribunal in this case found that it was just and equitable to grant an RCO against an associated party even though it had no involvement in the design or construction of the five housing blocks in question.

The ‘just and equitable’ test is also applicable to claims for a Building Liability Order, under section 130 of the Act (BLO, referred above). The implications of this decision will therefore need to be carefully considered by parties subject to or pursuing an application for either an RCO or a BLO.

Although we still await the publication of and assent to a raft of further secondary legislation relevant to the Act, it is clear from the cases referred to above that, the courts are willing to take the reins, with a forthright and robust approach to interpreting and implementing those provisions of the Act that have already come into force.