First Tier Tribunal applies the “just and equitable” test for Remediation Contribution Orders, clarifying how far the web of association extends for shared liability in building safety cases.

Established by the Building Safety Act 2022, Remediation Contribution Orders (RCOs) are a key legal tool for ensuring that responsible parties (e.g. developers and “associated persons”) meet the cost of remediating building safety defects.

Unlike Remediation Orders, which automatically require a landlord to fix proven defects, the Tribunal must deem it “just and equitable” to order an RCO. The recent First Tier Tribunal (FTT) decision in Grey GR Limited Partnership v Edgewater (Stevenage) Limited and Others provides much-anticipated guidance on how the Tribunal will apply the “just and equitable” test, especially when assessing liability across interconnected networks of associated companies.

What happened?

Vista Tower, an office-turned-residential tower block in Stevenage, hit the headlines when post-Grenfell inspections found the building had significant fire safety defects. The government took legal action against Grey, the building’s freeholder, and, in April 2024, the FTT issued a Remediation Order requiring Grey to fix the defects.

Grey then used the new and largely untested RCO process to claim its costs back from the original developer Edgewater as well as 95 companies qualifying as “associated persons” by virtue of their shared directorships.

What did the Tribunal decide?

• The FTT ordered Edgewater and over 70 of the associated companies to jointly and severally contribute £13.2m towards the remediation costs, despite the associated companies having no direct ownership or construction role.
• As the original developer, Edgewater sits at the top of the liability hierarchy with “no doubt” it should pay.
• Regarding the associated persons, common directorship alone may not justify the making an RCO, but additional linking factors might (e.g. common branding, family connections, financial dealings). Ultimately, whether it is “just and equitable” for an associate to contribute is highly fact sensitive and in the discretion of the Tribunal.
• Given the “fluid, disorganised and blurred” corporate network, the FTT determined that a single RCO making multiple respondents “jointly and severally” liable was more equitable than individual cost-share orders.
• The FTT also clarified which defects/costs should be included in an RCO. Adopting a broad approach, the test is not whether work is strictly necessary to comply with Building Regulations but whether it falls within a ‘reasonable range‘ of responses to address the defects.

What can we learn from this?

Although fact sensitive and not binding in later cases, this FTT decision sheds welcome light on how the “just and equitable” test will be handled in RCO cases. It’s evident that the range of reasonable remediation costs is wide, and that developers and sufficiently linked associated companies are in the Tribunal’s sights when it comes to facing liability to pay for them.

The FTT stressed that each case will be judged on its own merits. As more RCO applications come through, the clearer the guidance will become on how Tribunals approach them.

Need more clarity on building safety matters as the legislative landscape develops? Don’t hesitate to get in touch. Our team is on hand to offer clear and commercial legal support.

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This article contains information of general interest about current legal issues, but does not provide legal advice. It is prepared for the general information of our clients and other interested parties. This article should not be relied upon in any specific situation without appropriate legal advice. If you require legal advice on any of the issues raised in this article, please contact one of our specialist construction lawyers.

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