Construct.law - Summer 2024
Judicial guidance on the Building Safety Fund’s decision to fund remedial works
By Mike O’Connor
In the wake of the Grenfell Tower disaster in 2017, the Building Safety Fund (BSF) was established to address life safety fire risks associated with cladding on high-rise residential buildings with the aim of facilitating remediation works quickly and proportionately, ensuring residents are safe and maximising cost recovery from those responsible for the installation of cladding. It is therefore little surprise that the courts seem reluctant to interfere with the allocation of funds from BSF for remediation of high-rise residential buildings with defective or combustible cladding and the Court of Appeal’s decision in the case of Redrow PLC & Ors, V Secretary of State for Levelling Up, Housing and Communities [2024] EWCA Civ 65, underscores this position.
Summary of Facts
Redrow was the developer of two high-rise developments in Birmingham, known as Hemisphere and Jupiter 2. Purchasers of long leases in these developments had acquired a Zurich 10 Year Home Warranty Policy, with East West Insurance Co Limited being the insurer. Both Hemisphere and Jupiter 2 were found to have cladding defects requiring extensive remedial work. The insurer accepted coverage for the cladding defects on both buildings. Despite the acceptance of coverage, the long leaseholders also applied to the BSF for funding of the remedial works. Redrow objected to the application for funding on the basis that a third party (the insurer) had agreed to fund the remedial works claiming the BSF applications should be withdrawn or refused, and there should be no perceived obligation for Redrow to repay the BSF. Redrow had also signed a pledge agreeing to remediate or fund works and to reimburse any government funding received for buildings they developed or refurbished.
Decision
The appellant’s main contention was that the BSF guidance required applicants to exhaust all other avenues of funding before seeking BSF support. However, the Court found the BSF guidance did not require all other claims to be pursued to final resolution before an application for funding could be made. Instead, it required that all reasonable steps be taken to recover costs from responsible parties, including insurers. The fact that steps had been taken but not concluded would not prevent a successful application to the BSF. The Court further emphasised the urgency of remedial works and the need for speed as a significant factor in the decision-making process, aligning with the BSF’s objective to address cladding issues quickly to ensure resident’s safety. Ultimately, the Court upheld the lawfulness of BSF’s decision to allocate funds from for the cladding remedial works on these developments.
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