Lawbite: Court of Appeal considers retrospectivity of Building Safety Act 2022

The Court of Appeal has this week handed down two landmark judgments which consider the retrospective effect of various aspects of the Building Safety Act 2022 (BSA). The hearings were held in March 2025. This LawBite focuses on the Triathlon Homes decision.

In the Triathlon decision the Court of Appeal unanimously dismissed the appeal and concluded that a remediation contribution order (RCO) can be made in respect of costs incurred before s.124 of the BSA (which give the Tribunal the power to make RCOs) came into force on 28 June 2022. It also concluded that it was “just and equitable” for the FTT to have made the RCO against the respondents. In doing so it offered useful guidance on the “just and equitable” test.

This decision will be of interest to landlords, tenants, investors and developers of residential and certain mixed use building in England which fall within the criteria of relevant buildings under the BSA, and those entitled to seek, or who could be subject to, a RCO.

First Tier Tribunal’s assessment

The first instance Triathlon decision was the first substantive decision from the First-tier Tribunal (FTT) on RCOs. In it the FTT ruled that the developer of the Olympic Village in London and its parent company should pay £18m towards cladding remediation.

RCOs

An RCO allows an interested person (as defined in s.124(5) of the BSA) to apply to the FTT for an order requiring a current or former landlord or developer of the building, or someone “associated” with them, to meet the costs incurred or to be incurred in remedying or otherwise in connection with a relevant defect. In reaching its decision the FTT must consider whether it is “just and equitable” to make an order.

A relevant defect is a defect in a relevant building arising from anything done or not done in connection with relevant works which causes a building safety risk. A relevant building is a self-contained building in England that contains at least two dwellings and is at least 11 metres high or has at least 5 storeys. Relevant works are works undertaken or commissioned in the construction or conversion of a relevant building to residential use  during the period 30 years ending on 28 June 2022 (when this provision came into force).  Works which themselves were to remedy a relevant defect can also be relevant works even if carried out after that date.

“Just and equitable”

The main ground of appeal was the question of whether it was “just and equitable” for the FTT to have made the RCO on the facts.

In its decision the FTT had observed that s.124 gives no guidance on how the FTT is to decide what is “just and equitable” in any particular case, and it is not possible to identify a particular approach which should be taken when exercising this discretionary power.

The FTT did however say that the power should be exercised “having regard to the purpose of the 2022 Act and all relevant factors”.  That meant having regard to Parliament’s stated aim that the remedy should apply irrespective of fault, and that the financial burden of the building safety requirements should sit on those with the broadest shoulders, in this case the developer and its parent company. Public funding should be a “matter of last resort.”

The Court of Appeal agreed with this assessment, save as to the FTT’s suggestion that it could never be “just and equitable” for certain parties under s.124(3) to avoid liability. There could be instances where it would not be appropriate for the parties listed under s124(3) to be liable, even if this ultimately led to the works being funded by the public purse. One example given is where a director of a landlord was also a director of other companies which have no other connection with the landlord or its group and had nothing to do with the development and be engaged in entirely different businesses. The “just and equitable” discretion afforded to the Tribunal allowed it to decide not the make a RCO against such a company if the facts required it.

The Court of Appeal found that the FTT was correct to have not given much or any weight to the below in reaching its conclusions:

• that the developer was previously in public ownership
• that the beneficial owners of the developer and its parent company had changed since the Olympic Village was developed
• the applicant’s motivation in seeking a RCO – unless it was argued that a litigant was acting out of malice or the like, which wasn’t the case in this instance.  What was important was that the applicant had standing to apply for a RCO, which it did
• that there was no expectation on the part of the public authorities that the Building Safety Fund which had been used to fund the remedial works would be repaid
• that the applicant could have pursued other potential claims (e.g. contractual claims) available to it rather than apply for a RCO

Retrospectivity

The other main ground for appeal related to the FTT’s conclusion that an RCO could be made in relation to costs incurred before s.124 came into effect.

Although s.124 didn’t give a clear direction on the point, the Tribunal had felt it was correct to read the section in a way that benefited leaseholders, that being a consistent objective in the BSA, and the Court of Appeal agreed.

The Court of Appeal stated that whilst as a matter of legal policy, changes in the law shouldn’t take effect retrospectively, Parliament does have the power to make new law which has retrospective effect. Denying s.124 retrospective effect “would result in RCOs being unavailable in circumstances where Parliament could be expected to have intended that such relief should be available and inconsistencies could arise were it not to be.” Reference was also made to the Supreme Court’s judgment in the case of URS Corporation Ltd v BDW Trading Ltd which was seen to support a retrospective interpretation of s.124 of the BSA.

Where does this leave us?

• It is incredibly useful to have clarity from the Court of Appeal on these complex points
• The decision confirms the broad reach of the BSA and that RCOs could capture costs incurred before the relevant provisions came into effect
• The guidance on the “just and equitable” test will also be useful for both the Tribunal and parties in ongoing and future applications to the Tribunal