The Building Safety Act cases to watch

Simon Allison and Oliver Park round up the major appeals under this hugely significant legislation that are due to be heard in the next six months. Question I am advising a landlord (who also developed the building, which is a block of flats 30m tall) on the Building Safety Act 2022 and there still seems to be a lot of uncertainty about how some of the provisions in the 2022 Act operate. Are any appeals relating to the Act being heard soon, and, if so, what is their potential significance? Answer The operation of the 2022 Act – and in particular Part 5, which relates to protection for leaseholders from having to pay for the cost of remediation and other related matters – remains unclear in a number of respects. There are a number of different appeals currently in the system which are likely to provide useful clarity on various aspects of the Act, including several key cases to look out for over the next six months. Explanation URS Corporation Ltd v BDW Trading Ltd [2023] EWCA Civ 772; [2023] PLSCS 116 will be heard by the Supreme Court this month. The 2022 Act element relates to whether the retrospective extended limitation periods under section 135 apply to claims brought before it came into force on 28 June 2022. Section 135 extended certain limitation periods under the Defective Premises Act 1972, and BDW Trading subsequently applied to amend its claim to rely on the same. It was given permission to do so on the basis that the claims were reasonably arguable. This is contested by URS. The Court of Appeal thought the language of the statute in this respect was unambiguous and was supposed to have retrospective effect, and so found for the claimant. However, the Court of Appeal, recognising that the point was novel and may have a broader application, granted permission to appeal. The appeal in Adriatic Land 5 Ltd v Long Leaseholders at Hippersley Point [2023] UKUT 271 (LC); [2024] EGLR 2 will focus on the question whether the leaseholder protection provisions in Schedule 8 of the 2022 Act should have retrospective effect. Most of the provisions use the phrase “no service charge is payable” in respect of a particular matter. But does that mean that from the date the 2022 Act came into force (28 June 2022) no service charge is payable in respect of the matters where costs are incurred from that date, or does it mean that any service charge, even if relating to costs incurred many years earlier, is no longer payable? The Upper Tribunal considered the latter of those options to be correct, and its construction of the 2022 Act is now to be reconsidered by the Court of Appeal in March 2025. If the Upper Tribunal is correct, the effect (it is said) would be to retrospectively write off at least tens of millions of pounds of expenditure by landlords, without compensation. That potentially raises arguments under the Human Rights Act 1998, on the basis of interference with landlords’ rights under Article 1 of Protocol 1 to the European Convention on Human Rights. The secretary of state has intervened in the appeal generally, no doubt with an eye to that argument. A further question that arises in this appeal is what the scope is of paragraph 9 of Schedule 8 of the 2022 Act, which provides protection to leaseholders with a qualifying lease from the costs of legal or other professional services relating to the liability or potential liability of any person incurred as a result of a relevant defect. In this case, the costs incurred were the costs of seeking dispensation from the statutory need to consult leaseholders in respect of remediation work. A particularly widely anticipated appeal is that of Triathlon Homes LLP v Stratford Village Development Partnership and others [2024] UKFTT 26 (PC); [2024] PLSCS 16, due to be heard by the Court of Appeal in March 2025, following on immediately from the Hippersley appeal, with the same panel of judges. The First-Tier Tribunal decision in this case is currently the leading case on remediation contribution orders, and in particular when it will be “just and equitable” to make such an order. In the FTT, an experienced bench took a relatively narrow view of what had to be considered when interpreting what would be just and equitable, and this forms one of the grounds for appeal. Another plank of the appeal is challenging the FTT’s reasoning for making the RCO, which appeared to be that, as the relevant sections of the 2022 Act were aimed at developers, this was a factor in why an order against a developer would be just and equitable. A further key contentious point will be to consider whether an RCO can be made in respect of costs that a party has paid prior to the Act coming into force – in effect yet again raising the question of the extent to which the Act has retrospective effect. The FTT considered it could, but now it is for the Court of Appeal to decide. Finally, it is worth noting the appeal in Almacantar Centre Point Nominees v Leaseholders of Centre Point House LC-2024-352, to be heard by the Upper Tribunal on 18 and 19 December 2024. This appeal concerns the proper operation of paragraph 8 of Schedule 8 of the 2022 Act, which is the provision that protects leaseholders with a qualifying lease from having to pay for cladding remediation. Questions to be considered will include: what is a “cladding system”? How unsafe is “unsafe”, and what needs to be unsafe? Does the protection apply to all buildings, irrespective of their age? So, hopefully, some answers are on their way, but undoubtedly more appeals on important points will follow later in 2025 as more and more difficult issues arise and work their way through the system. Simon Allison is a barrister at Landmark Chambers and Oliver Park is an associate at Charles Russell Speechlys LLP Image © Simon Chapman/LNP/Shutterstock