Redrow loses £30m challenge to Building Safety Fund decision to repair Birmingham cladding

Property developer Redrow has lost a court challenge to the government’s decision to fund repairs to the cladding of two Birmingham tower blocks through the Building Safety Fund. The fund was set up in the wake of the Grenfell Tower fire of June 2017 to replace dangerous cladding and to ensure that tenants and homeowners don’t end up bearing the cost of unsafe contraction. The case centres on two Birmingham tower blocks developed by Redrow, Jupiter 2 and Hemisphere which need the cladding changed. The BSF is funding the management companies of those properties to repair the cladding, which is estimated to cost £30m. Under the BSF’s rules, Redrow, as the developer, is obliged to repay the BSF. Redrow argued the government should never have funded the repairs as there was an insurance policy in place that would cover the costs. According to the ruling, Redrow had already been in touch with the insurer, which had agreed to fund the repairs. However, according to the ruling, the government administrators of the BSF told Redrow the government would fund the repairs, that Redrow must refund the money, and Redrow should seek repayment from the insurance company. According to the ruling, the insurance company wrote to Redrow to say that, as the BSF was funding the repairs, Redrow was liable so it wouldn’t pay out. This is a statement that the judge said “may not be sound in law”. Even so, Redrow challenged the decision all the way to the Court of Appeal, which heard the case in May. According to the judgment handed down today, lawyers for the company argued that the BSF should have taken the insurance policy into account and waited until issues with the insurance company were resolved. They also argued the BSF was using speed as a “trump card” and failing to take into account other important factors. The three-judge panel dismissed these arguments today. According to Lord Justice Coulson, speed “may not necessarily be a trump card in every situation” but it is a “significant factor in any decision to allocate funding under the BSF”. “That is because the whole basis for the BSF was the need urgently to address the cladding issues revealed by the Grenfell Tower disaster. That is why… the objective of the BSF is to resolve the problems ‘quickly’, so that residents were and felt safe ‘now’, and why it is said that the problems will be addressed ‘as quickly as possible’.” The judge added: “The need to act with speed is therefore baked into the whole rationale for the BSF.” As for the suggestion that the BSF “should and could have waited” on the insurance company, the judge said he rejected the argument. He said there was no factual, legal or common sense reason for the BSF to delay its decision to provide funding. Redrow PLC & ors (claimants/appellants) v The Secretary of State for Levelling Up, Housing and Communities (defendant/respondent) & ors Court of Appeal (Coulson LJ, Dingemans LJ, Stuart Smith LJ) 14 June 2024