Construction law quarterly

Welcome to the final edition of Construction Law Quarterly for 2025. In this edition, we cover a number of different topics from points of principle on descoping to recent case summaries. The Building Safety Act features heavily given its important role in how the industry adapts to changing legal requirements.Our first paper tackles the Court of Appeal decision in the case of Triathlon1. The Court of Appeal upheld the First-tier Tribunal’s (FtT) approach, emphasising that the Building Safety Act (BSA)2 places primary responsibility for remediation costs on developers, not the public purse. While government funding exists via the Building Safety Fund (BSF), the Court made clear this is a last resort and does not override statutory provisions dictating which connected parties should pay. Investors acquiring companies assume associated risks, even unforeseen ones such as those addressed by the BSA. The Court underscored that developers with ongoing interests in affected buildings remain at the top of the hierarchy for covering costs. The BSF, predating the Act, remains outside this framework, reinforcing the notion that public funding is not meant to relieve developers or their associates of their legal obligations.Our second paper flows from the outcomes of Triathlon1 insofar as the FtT’s judgement clarifies how remediation contribution orders should be applied, emphasising the importance of corporate relationships, proper governance, and the equitable allocation of remediation costs among those closely associated with property developments. The FtT’s judgement addressed the allocation of remediation costs linked to building safety, especially in the context of complex corporate structures and familial connections. The tribunal concluded that, in most cases, the financial and managerial links to Edgewater outweighed factors against making a remediation contribution order. Poor governance and record-keeping among the respondent companies heightened concerns about accountability. Crucially, the FtT emphasised that the financial burden should not fall on independent, external investors – as shown by its decision not to order Edgewater (Brighton) Limited to contribute, due to its genuinely independent shareholding. Instead, those with close connections to the developments were considered responsible for ensuring remediation funds. The tribunal’s clarification of ‘defect’, ‘building safety risk’, and ‘associated persons’ under the BSA is significant.The third paper in this edition tackles the thorny issue of descoping. Recent case law confirms that, unless a contract explicitly allows it, employers cannot omit work simply to give it to another contractor. Omission is permitted only if contractual terms are clear and sufficiently broad. Employers seeking to exit an unfavourable contract may attempt to use termination clauses, but an unqualified termination right must be expressly stated. Courts generally uphold such clauses if freely negotiated. However, they may intervene if the contract is oppressive or does not compensate the contractor for lost profits. Contractors should carefully assess contract provisions regarding omissions and termination for convenience to ensure adequate protection.Our final paper deals with letters of intent. Letters of intent, though a practical tool to commence work before a formal contract is signed, can lead to significant risks if not clearly defined. Key points include clarifying which letter applies, ensuring the scope, dates, termination terms, and expenditure caps are explicit and adhered to, and addressing insurance responsibilities. Failure to do so can result in disputes over payment and liability, especially if work continues beyond agreed limitations or if the formal contract is never executed. The Supreme Court advises parties to finalise agreements before work starts, but acknowledges this is not always feasible in practice.As ever, should you have a short article or legal update that you would be interested in submitting for inclusion in a future issue please contact Rebecca Rivers at [email protected] content and the opinions expressed have been provided for information purposes only. It should not be relied on as a substitute for specific legal advice on any particular topic.The Court of Appeal has upheld the decision of the FtT, on appeal from the Upper Tribunal (Lands Chamber), in Triathlon Homes LLP v Stratford Village Development Partnership & Others1.The Court of Appeal dismissed both grounds of appeal advanced by the Appellants, Stratford Village Development Partnership (SVDP) and Get Living PLC.The Court also confirmed that the FtT had been correct in holding that:Partner Sarah Dyer and Principal Associate Sean Garbutt acted for the successful Respondent, Triathlon Homes LLP (Triathlon).Triathlon is a limited liability partnership which provides affordable housing at East Village, which is the former Athletes Village for the London 2012 Olympic Games. East Village is now a large permanent residential estate providing nearly 3000 new homes, most contained in 66 blocks of between 8 and 12 storeys.The appeal concerns five buildings (the Blocks) in an area of the village known as N26. Triathlon is the long leaseholder of all or part of each of the Blocks.The Athletes Village was owned and developed by a special purpose vehicle (SPV) called Stratford Village Development Partnership (SVDP). At the time of development, SVDP was wholly owned by the Olympic Delivery Authority (ODA). Following completion of London 2012, SVDP was sold into the private sector and, at the time of the application, was part of a corporate group which included SVPH1. SVPH2 and QDDAV, all of which were ultimately owned by Get Living PLC (Get Living).The properties at N26 were subsequently leased to individuals by both Triathlon and Get Living, with ≈60% of the units leased by Triathlon, and the balance leased by Get Living.Following the Grenfell Tragedy, inspections were undertaken across the village by the management company East Village Management Limited (EVML) which identified a number of building safety defects. Thereafter a waking watch was put in place and a remedial scheme for N26 designed and tendered.The majority of the costs of the tender process and remedial works were funded by the Government’s BSF.Triathlon’s share of the remedial works and professional fees were estimated at some £16 million (referred to in the judgement as the ‘Major Works’).In addition, future costs of fire evacuation officers and fire alarm decommissioning to the conclusion of the works were estimated in the region of £760k as well as Triathlon’s costs incurred in respect of the waking watch, fire evacuation officer, and tender of the remedial works at just over £1 million (referred to in the judgement as the ‘Triathlon Additional Costs’).Triathlon applied for RCOs to be made against SVDP (in its role as developer) and Get Living (in its role as the parent company of SVDP as well as the freehold landlord entities SVPH-1 Limited and SVPH-2 Limited). Triathlon sought its share of the Major Works costs and future costs to be paid by SVDP/Get Living (together the Respondents) to EVML (as the entity that will be incurring the Major Work and future costs), with the historic Triathlon Additional Costs being sought to be paid to Triathlon.The FtT – heard by the Upper Tribunal President and Deputy President acting in their capacity as FtT judges – had agreed with Triathlon and made five RCOs against the Appellants (one in respect of each of the Blocks), ordering them to pay in total:The Appellants appealed against the FtT’s decision on two grounds, arguing that the FtT had erred:The Court of Appeal dismissed both grounds of appeal.The Appellants contended that the FtT had erred (in 10 separate respects) in concluding that it was just and equitable to make RCOs against SVDP and Get Living for the costs of the Major Works (for which EVML has funding from the BSF).The Court of Appeal dismissed all 10 sub-grounds.Some key points made in the judgement include:The Court of Appeal did not accept this. They commented that in the extracts the Appellants relied upon as purportedly creating this assumption, the FtT were making two different points. The first point was that the policy or ‘central purpose’ of the BSA was to place primary responsibility on the developer. This was not disputed – and indeed was endorsed by the Supreme Court in its recent judgement in URS v BDW3.The second point that the FtT had been making was the ‘public purse’ point (also discussed further below). The Court of Appeal noted that while it is true that Government has made public funding available ‘in the shape of the Fund’, is to that this was to the provisions of the Act which which parties with a to the building if to, to the the FtT were in concluding that as between SVDP and Get Living on the and the public on the it was to the public should the works the and its associates to the buildings and can (in the case of Get well to the Court of Appeal also that the SVDP was in public by the a public did not the further that Get Living had with the of the blocks – in the in the case was the had developed the its It that Get Living was not the of that is the for an a company which a to which it it of the development, the Court of Appeal noted that the had the between acquiring the or acquiring to they the of to included the the Court of Appeal was of a building safety which addressed by under which the parent of a also be made to being at in any BSA provides a of to the with a number of making as to how the costs of remediation which would have on the from which the BSA should be identified by the FtT and by the Court of Appeal is that a responsible for the an in the building should at the top of the hierarchy or of those will the BSF, on the not its place in the hierarchy of those the Act as of the costs which the are from but outside the Act in Appellants had also that the FtT were to that an be made in respect of costs incurred before of the BSA into This issue to the million of costs that were incurred by Triathlon before of appeal was also Court of Appeal the recent Supreme Court judgement in URS v that the judgement ‘in that is of the provisions of the BSA that has also noted that is policy would have to at the had acted and on with by before into is a decision from the Court of a number of important for the industry building developers and as well as for in building safety The judgement provides an decision on the the and will be applied by the as well as the of of the on the of the Supreme recent judgement in URS v it that the purpose of the BSA is to place primary responsibility for building safety on the it confirms that seeking to on the of of corporate structures if long the of are to with the will the or hierarchy of liability in which the and its associates at the may also of funding from the to to those from those ultimately responsible (in of the in the funding from the that the of must use to the and this to the the Appellants, SVDP and Get Living were to appeal to the Supreme Court on two of appeal the Court of Appeal was to that a remediation contribution order under BSA can be made in respect of costs incurred before that into on to appeal was in respect of the just and equitable the appeal to be heard by the Supreme Court in Limited Partnership the landlord and sought remediation contribution orders to of the Building Safety Act against Edgewater Limited a and and a further companies in respect of a building in known as Following a in the the orders by a decision on 2025. In the were to make on a and is the first time that the FtT has considered the of remediation contribution orders the Upper Tribunal as the Triathlon Homes LLP v Stratford Village Development Partnership & The decision provides further about the of under BSA as well as of how the and under BSA would be applied in respect of with building had been the of an for a remediation order against under BSA by the of for and which in a remediation order being made in The FtT’s how have been to a building by of a remediation order may to their by for a remediation contribution order against the or is a over which residential It was in the as an and was into in works were to the external as part of the first respondent in the case was the of which had the of the building from to residential Edgewater long residential for each of the with a paid for those of The included investors and associated the freehold from as part of a of for the a the Grenfell concerns about fire safety in residential a was in the of all from such In in identified in the building but not to due to fire The was on 10 before fire was by of on sought funding from the Building Safety Fund to which was in part in The identified in and included and a of to building safety, a waking watch, were put in place at the significant was made in addressing and with new to the remedial of at the final case management in the remediation order a of remedial works and a for those works was into a funding with Homes to the fire safety in the The to legal for any to the and against and remedial works in and are for completion by 10 as to the made a remediation order against at the of the of in sought remediation contribution orders against the due to the significant and costs of million for the remediation of the the orders on the grounds that the identified were not for the purposes of of the and that it would not be and Triathlon, to do They also that the remedial works that had been undertaken by beyond the of an which they should be and if it were just and equitable to do the remediation order case of the FtT had on the of an agreed of defects. some in the remediation contribution order as to or not all of the works were in to and the correct for those FtT that a for the purpose of BSA as not or not in with and a building safety was not limited to with the Building with the Building was not the only in which be a ‘building safety is at of the BSA as to the safety of in or about the building from the of fire or the of the building or any part of The FtT considered that any – as the fire risks in residential buildings in to as an that fire would be – may be a building safety FtT the that the of an should be to that which is Instead, it that any such would be and would on was just and equitable in a given would be by the remedial works were of which on the before the was to be of the BSA provides that the FtT may make a remediation contribution order on the of an interested it it just and equitable to do FtT was by the Triathlon as to would be and It the that the remediation contribution order is not to be providing a to funding for remedial with the on of and to remedial it was just and equitable to make or include costs in a remediation it was considered to be to the remedial were a of or costs In while it was that some of the remedial works were not the advice to was that they were Following a of the different the FtT considered that it acted to on with works to a particular respondent should be in the the FtT to each of the in and to it would be and to an order. The FtT that the just and equitable is for in liability to ensure funding for remediation work is and or that the can be It also noted that the financial of should not the decision to issue remediation contribution order as the was a at the top of the hierarchy of in respect of was that a should be this conclusion was also on the that Edgewater had known of in the external and had to any had that the FtT of the was a and property which had been on of the fire and which had to a the Grenfell The FtT that did as an entity against which a remedial contribution order be but considered that Edgewater and its associates would be in the hierarchy of considered each of the at the time of the in in with the in This was the first time that the had addressed the of associated under number of points were made in respect of to make remediation contribution orders against associated corporate and a to the the FtT concluded that all but of the should also be to a remediation contribution order. In to those companies an order was the factors to Edgewater were to have those factors against making an order FtT noted that of the companies had and in a a of proper governance of property developers This concerns about company in to financial and in respect of covering the costs to fire safety point of particular is that the FtT considered that the burden of the should not fall on external investors the significant majority of the of Edgewater (Brighton) Limited (the second was genuinely it would not be just and equitable to make a remediation contribution order against that entity It also the that those with to the should ensure be made available for the FtT considered that it was just and equitable in this case to make the and not the judgement of the FtT provides in respect of the of the tribunal to remediation contribution now and we are to have had their or the of their work under a contract part a not of any or on their part or the has been or put on but simply the work is being given to an contractor is to a employers to or at their convenience in order to a is so the it on the contract a contractor is to works not only has an to those works but also a to are of that right may be for the contract provisions an to omit work from the the in respect of of the work have or the works are simply or to the such as has been a or in the of contractor provisions an important However, while such contractual to omit works or some over the of works and the to exit they may also employers with to part a simply to of a being by another contractor for the to which a descoping or termination provides the with the to omit work or will on the particular of the are some which we a is right to omit work from the contained a an would not simply be to omit some or all of the of work in order to give it to an contractor – if has into a that is the should be generally by the While will include provisions the to the of the work to to in the of the particular for an to be to omit the contract must expressly the law limitations on such are two on which even an right to omit work may be They the of work which can be and the to work to a an cannot all the work from a or omit such a large of it that the would the of the This to the that the between the and the contractor must be and that the cannot use the omissions to from to be a so as to a with another contractor. a significant of work remains to be and all of the work is a is to that such a large the of a contract an to omit work for the purpose of it to another contractor has been the of recent before the and and the from the can be as contract for the of work on the contractor not only a to the work but a right to the work which it to are if the is to be to work from the contractor in order to have it by are work may be and given to provided the contractual provisions relied upon are to the The or for the of the work is the provisions of a contract do not an with the right to omit the of the work in it to exit it as a may employers to the termination provisions of the contract as an of the contractor is right to or be to do the contract must (in clear an unqualified right to any or on In such termination will be at the of the will uphold termination at will clauses – they will generally be as part of the between the parties which the will be to However, are limited in which the may not give to a termination for convenience such as the contract does not for the contractor to be for of and it would have on the balance of the both parties are entities and have freely and concluded a the would be to in the unless the from which put it at a and the contract in is would be a to are an may the to by or termination for from a it is important to the and of the or termination provisions in they are to and, in the being into is of being at the and at short and is any to the contractor by of clear provisions for the of or in the of termination at which for the contractor to be for such as of and that would have been on the balance of the of are the Construction as a of work as and, in some cases, before a formal contract has been known as their purpose is – to a contractor or to commence an of the works with some that they will paid and be in for the while the of the contractor or to its their of letters of do not have any their can from a letter which a to into a but which liability in to that future to a contract that the of the would always parties to into a formal contract commence work under a letter of intent, but this is not always you must use a letter of intent, to in some of the is not to to at the top of a letter of intent. This is – for – the parties cannot the contract and do not the letter of to their However, this is not a significant work has been and paid the will be to that was v & the had a letter of a contract and a which that the terms would not be by both While the formal contract was never signed, the that, the letter of intent, the of the parties as works and the a This was the that the letter of did not of the provisions that would be of a their letters of can be and between the have been and it is that the parties are before work starts, as to which letter is letter of intent. The case of Limited v the of this In that the had to from of of the between the terms was a liability if limited the liability to (in a for over do not the terms of a letter of it is only to and they it to be with the formal It is to be clear about the of work to be the letter of and is to the is and of expenditure is is just as important to to the agreed limitations any it is for to work has disputes can of the of letters of is that work continues outside the or in order to while the formal contract is negotiated. This can be if the formal contract is never agreed or signed, – about the and, most about In those and cannot be of payment the expenditure has been even if they have is to the insurance a letter of intent, but it is important that this is considered and will be for is a or a fire by the works under the letter of is to the works this not cover the or any which the contractor or to a liability that they not be to the letter of which will be responsible for insurance for which risks, and that the insurance is in Supreme Court that parties should first and to work we that is not always Letters of can be but if not