Government intervenes in legal battle over Olympic village owner’s £18m cladding bill

They argued that issuing retrospective bills for costs incurred before the act came into force was “fundamental to the overarching aim” of the legislation.

Michael Walsh, representing the government, said: “The safety of those living in buildings with fire safety risks is of paramount importance to the secretary of state. The proper and effective operation of the Building Safety Act is central to that mission.

“The key justification for the Building Safety Act was to allow recovery of costs of remediation by those responsible and remove it from the shoulders of leaseholders... It is an equitable redistribution.”

The tribunal ruling, handed down in January 2024, was the first use of a new power called a remediation contribution order, or RCO, under the Building Safety Act.

It was hailed as a victory by leaseholders who have been unable to sell their flats since defects were uncovered, as well as Triathlon Homes, the housing association that brought the action.

Mr Walsh said the secretary of state’s position was that an RCO can be made in respect of costs incurred before the act came into force in June 2022. He said: “The overall purpose of the Building Safety Act... is to protect leaseholders from paying for remediation... Retrospectivity is fundamental to this overarching aim.”

The appeal began on Wednesday. Get Living had permission to appeal the tribunal ruling on three grounds but chose to pursue only two. These are whether the ruling was “just and equitable” and whether the “retrospectivity” of the RCO rendered it invalid.

Jonathan Selby KC, representing Get Living, told the court that remediation works were underway and Get Living was looking to pursue the building’s original contractor, Galliford Try, for costs.

He said: “In this case, where the remediation works are funded and Triathlon is not being required to pay for the works, and where there are other claims available to allow the funding to be recouped, we submit that the tribunal erred and the presence of other claims should be a material factor against the making of an RCO in this case.”

The complex ownership structure of the former Olympic village is central to the case. The freeholder of the site is Stratford Village Development Partnership (SVDP), which is a subsidiary of Get Living. SVDP was sold to the consortium of investors that owns Get Living after the Olympic Games.

The original ruling recognised that Get Living was not involved in decisions about the design or construction of the buildings. However, it said that the way in which it purchased SVDP meant it had taken on “latent and consequential liabilities” as well as its assets.

Underneath SVDP is East Village Management Limited (EVML), the superior leaseholder. EVML is the principle accountable person under the Building Safety Act 2022 and must make the buildings safe. EVML cannot issue a demand for building safety remediation, because leaseholders are protected by the Building Safety Act.

Beneath EVML are various Get Living companies offering market-rent tenancies and Triathlon Homes, which offers social rent, intermediate rent and shared ownership to residents.

Mr Selby said: “As the tribunal found, the remediation works are being funded regardless of the outcome of the RCO application. So this is not a case where any of Triathlon, EVML or any other leaseholders are having to await the outcome of any other claims before funding is secured.”

He said the tribunal ruling required Get Living to pay for the fire safety fixes before it had the chance to recover costs from contractors.

“The respondents are required under the RCOs to bear the whole cost of the remedial works,” he said. “And before they make that payment they are unable to obtain contributions from others, in particular contractors and consultants, because they can only be pursued in the High Court.

“That, we say, is not just and equitable when the statutory purpose of getting the buildings fixed is being achieved.”

Mr Selby addressed the criticism that Get Living assumed this risk when it purchased SVDP, because it bought the company rather than the property.

“But those risks were to be mitigated by warranties from the consultants and contractors engaged on behalf of SVDP to carry out the development,” he said.

SVDP was sold to the consortium of investors that own Get Living in 2014. Mr Selby added: “If this claim had come up in 2011, someone, maybe a group of leaseholders, would have sued SVDP as the developer. SVDP would have brought in Galliford Try as the contractor and then Galliford Try would no doubt have brought in the architect, maybe the fire engineer.

“That claim would wend its way through High Court process, most likely settle… The developer would have got all the proceeds of the litigation before having to pay over money. But the effect of an RCO is to cut through that whole process, and understandably so if you need the money to get the work done.

“But if the work is being done, we say it’s not just and equitable to make the developer pay first, before opportunity has been had to follow through on the claims.”

A spokesperson for Triathlon said: “This case has always been about who should pay to fix fire safety defects. It’s for five buildings, but we have hundreds of residents in a further 36 buildings waiting for essential safety work.

“East Village residents need confidence the funding will be in place to make their homes safe. The Building Safety Act and the supporting regulations are very clear that primary responsibility for the costs of remediation lies with the developer.

Get Living said: “The safety of residents is always our highest priority; we would never seek to compromise on this.

“The building safety remediation work subject to this legal case started in January 2023 and is due to complete next month.

“East Village is the former London 2012 athletes’ village built by the government and their contractors. It is their faulty construction work we have been working hard to fix.

“We are appealing a judgement which, while ruling that Get Living was not at fault, still laid financial liability at our door. That cannot be just or equitable and does nothing to encourage new investment into infrastructure and housing, at the time the UK needs it most.

“We are taking legal action against the government-appointed contractors at fault here to recover the costs. We are in active discussions with the government, the original developer of East Village, to ensure further work required continues without delay.”

The appeal concluded on Friday and a judgment is expected by May.