Building Safety Act 2022 – What Is A "Risk" And Whose Liability Is It Anyway? Upper Tribunal Provides Clarification

A landmark decision from the Upper Tribunal (UT) has reaffirmed the extensive reach of the Building Safety Act 2022 (BSA) - confirming that companies associated with a developer can be held jointly and severally liable for the costs of fixing building safety defects, even where they did not directly participate in the development itself.

The case of Edgewater (Stevenage) Limited & Ors v Grey GR Limited Partnership concerned Vista Tower in Stevenage, a former office building converted into residential flats in 2016-2017. Following the Grenfell Tower tragedy, investigations revealed fire safety defects in the building's external walls, including combustible insulation materials. The current freeholder, Grey GR Limited Partnership (Grey), incurred substantial costs remedying these defects and sought to recover those costs from the original developer and over 90 associated companies.

This decision provides the clearest judicial guidance to date on how widely the BSA's “associated company” provisions can apply. In this article, set out the implications of the decision for business, and will be essential reading for developers, investors, and corporate groups operating within the residential sector.

The Building Safety Act framework

Under the BSA, tribunals can make "remediation contribution orders" requiring developers and their associated companies to pay towards the costs of remedying building safety defects. A key feature of this legislation is its broad definition of "associated" companies, which extends liability beyond the developer itself to include any company sharing common directors during a specified period, or where one controls another.

The First-tier Tribunal (FtT) made an order requiring approximately 60 companies to pay the remediation costs on a joint and several basis, meaning Grey could pursue any of them for the full amount. The companies appealed on four grounds:

• Ground 1: The FtT lacked jurisdiction to make a single RCO imposing joint and several liability on multiple respondents.
• Ground 2: The FtT erred in its approach to determining whether it was "just and equitable" to make the order, wrongly imposing an evidential burden on respondents and drawing adverse inferences from their failure to explain their corporate relationships.
• Ground 3: The FtT wrongly concluded that a "building safety risk" includes any risk above "low" risk, when only an "intolerable" risk should qualify.
• Ground 4: The FtT wrongly concluded that it was just and equitable to include the costs of replacing certain wall types in their entirety.

Decision - Ground 1: Joint and several liability upheld

The appellants' primary argument under Ground 1 was that the FtT had no power to impose joint and several liability, contending that the statute only permitted separate orders against individual companies. The UT rejected this, finding that the power to make orders against multiple respondents on a joint and several basis was clearly within the tribunal's jurisdiction. The legislation uses deliberately broad language, and restricting liability to separate, apportioned shares would undermine Parliament's evident purpose of ensuring remediation costs are borne by those responsible for defective buildings.

This represents a significant confirmation that the BSA can reach across entire corporate networks.

Decision - Ground 2: "Just and Equitable" test properly applied

Under Ground 2, the appellants argued that it was only "just and equitable" to make orders against companies that had directly participated in the development or received profits from it. Again, the UT disagreed. The FtT had made careful factual findings that the various companies formed part of a wider corporate structure controlled by common beneficial owners. On the evidence, the tribunal found the corporate relationships were "opaque", with "complex and interconnected" dealings between entities. In these circumstances, treating the network of companies as collectively responsible was entirely proper.

The UT stressed that Parliament intentionally left the “just and equitable” test broad. There is no requirement for direct participation in the development; what matters is whether, on all the facts, it would be fair for the company to contribute.

Decision - Ground 3: Clarifying the meaning of "building safety risk"

Ground 3 addressed an important question of statutory interpretation concerning what constitutes a "building safety risk" under the Act. Although this ground was academically moot, the UT addressed it for future guidance. The appellants argued that a “building safety risk” must be “intolerable”, and that risks considered “tolerable” or “medium” under PAS 9980 should fall outside the Act.

The FtT had rejected this argument, concluding that any risk above "low" risk could constitute a building safety risk. The UT went further still, holding that the statutory reference to "a risk" simply means any risk, without any threshold requirement. The statute describes "a risk to the safety of people arising from the spread of fire or collapse", without qualifying adjectives such as "significant" or "intolerable". Parliament had used qualifying language elsewhere in the legislation where it intended to impose a threshold-for example, references to "critical risk" in other provisions-demonstrating that the absence of such language in the building safety risk definition was deliberate.

This interpretation supports a broad application of the remediation provisions. Whether a risk qualifies as a building safety risk will depend on whether it satisfies the statutory conditions: it must relate to a defect, it must concern the safety of people in or about the building, and it must arise from the spread of fire or structural collapse. The level of risk, however, is not a barrier to establishing jurisdiction.

Decision - Ground 4: Reasonableness of remediation costs

Finally, under Ground 4, the appellants challenged the inclusion of costs to replace the Type 1 wall in full, arguing it was disproportionate based on expert evidence. The UT declined to interfere. It emphasised the well-established principle that appellate courts should not disturb findings of fact made by the tribunal that originally heard the evidence. The UT had found that Grey reasonably relied on professional advice and faced significant time pressure, and these were conclusions it was entitled to reach on the evidence before it.

The role of Explanatory Notes

The UT also clarified the limited value of the BSA's Explanatory Notes. Because the commentary on Sections 116–125 was published after the BSA was passed, it carries little weight in interpreting Parliament's intention. Post‑enactment notes may reflect a department's view of the legislation, but they are not a guide to what Parliament meant and should be treated as no more authoritative than academic commentary.

Key takeaways and next steps

This ruling has clear consequences for developers, landlords, and corporate groups. The BSA casts a wide net, and companies connected through shared directors, ownership, or group structures may face liability for remediation costs even if they had no direct involvement in the original project.

Tribunals will look beyond formal company structures and examine the substance of corporate relationships. Groups operating through multiple entities should expect close scrutiny, particularly where records are incomplete or financial arrangements appear opaque. Clear, well‑documented corporate evidence will be essential for any business defending RCO claims.

The UT's clarification of “building safety risk” is equally significant: risks cannot be dismissed as merely “tolerable” or “medium”. Any defect‑related fire‑spread or structural risk may trigger the BSA, regardless of severity.

Overall, the decision confirms:

• the broad interpretation of “associated companies”;
• the tribunal's extensive powers to impose liability across corporate networks; and
• the low threshold for establishing a building safety risk.

Read the original article on GowlingWLG.com

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.