A Vivid Reminder: Fire Safety Defects Can Trigger Cover
Ten years on from Grenfell, fire safety defects remain one of the defining issues in the built environment. Against that backdrop, the recent decision in Vivid Housing Ltd v Allianz Global Corporate & Specialty SE [2025] offers important guidance on how the courts approach ‘imminent damage’ and reinforces the need for insurers to be part of the solution rather than an obstacle to remediation.
At Fenchurch Law, we have advised on several imminent danger cases, an example being Nova House, Slough – which involved a variety of fire safety and structural issues. The decision in Vivid, which involved an application for summary judgment, sits squarely within this developing line of authority and offers policyholders helpful clarity.
The Policy
The operative clause at the heart of this application is Clause 3(a), which states:
Clause 3(a) Operative Clause
"The Insurers agree to indemnify the Insured against the cost of repairing, replacing and/or strengthening the Premises following and consequent upon a Defect which becomes manifest and is notified to Insurers during the Period of Insurance and not excluded herein causing any of the following events:
(i) destruction of the Premises; or
(ii) physical damage to the Premises; or
(iii) the threat of imminent destruction or physical damage to the Premises which requires immediate remedial measures for the prevention of destruction or physical damage within the Period of Insurance."
The Dispute
Vivid submitted a claim in May 2019, contending that several building safety defects had manifested at the Property, and that they all fell within the Policy's definition of "Defect", thereby triggering the Operative Clause. Allianz denied that contention.
The summary judgment application focused solely on the meaning and scope of sub-clause(iii):
"the threat of imminent destruction or physical damage to the Premises which requires immediate remedial measures for the prevention of destruction or physical damage within the Period of Insurance."
The key question here, assuming that there were such “Defects”, was whether there was a risk of imminent damage.
The Defects
- Defect 1 (Rockpanel cladding): Vivid alleged that combustible RP cladding and foam insulation were used on a building over 18m high without proper testing or barriers. It also said that combustible debris in cavities could enable fire and smoke to spread externally.
- Defect 2 (vertical cavity barriers): Vivid contended that required vertical cavity barriers were missing, allowing fire or smoke to spread unnoticed throughout the building.
- Defect 3 (horizontal cavity barriers): Vivid claimed that missing or faulty cavity barriers at party walls, slab edges, and window openings could allow fire and smoke to spread undetected throughout the development.
- Defect 4 (Rockclad bracketry): Vivid states that RP cladding panels were not properly secured to vertical rails, with brackets that were inadequately supported or overstressed, posing a risk of detachment or damage.
- Defect 5 (building debris): Vivid claimed that debris left in building cavities created a fire hazard, facilitated fire spread, and enabled water to enter flats, causing further damage.
Allianz’s Position
Allianz argued that “imminent” required a serious and immediate likelihood of damage occurring soon, which it said was not the case as of August 2019.
In their view, the clause did not cover threats that would materialise only if a non-imminent event occurred, nor extend to circumstances where remedial measures are not immediately necessary to prevent destruction or damage within the policy period.
There was no likelihood of damage occurring soon as at August 2019, Allianz said, because:
(i) Vivid’s response in the notification to whether urgent repairs were required was “N/A.”
(ii) The only measures implemented during the policy period were “Waking Watch” arrangements, which were not intended to prevent property damage.
(iii) No damage occurred during the policy period, despite the absence of remedial works.
Vivid’s Position
Vivid, by contrast, contended that “imminent damage” should be assessed objectively, and that there was no requirement that the destruction or physical damage should happen soon. On its proper construction, they said that sub-clause (iii) applied where a reasonable observer would conclude that there was a realistic prospect of physical damage requiring immediate remedial measures to prevent it.
As to each of the defects, Vivid argued that:
(i) Defects 1, 2, 3 and 5 made the development vulnerable to physical damage in the event of fire, giving rise to a realistic prospect that imminent physical damage might occur. That risk was constant given the frequency of fires, supported by evidence of similar incidents.
(ii) Defect 4 put the cladding panels and bracketry at risk of deformation and detachment, giving rise to a realistic prospect that imminent physical damage might occur.
The Court’s Decision
The Court considered whether the defects created a threat of imminent destruction or damage sufficient to engage the policy.
As to the fire safety defects, the Court held that it could not be said there was no realistic prospect of establishing a serious risk of fire and imminent damage, particularly given the implementation of Waking Watch measures, which reflected an ongoing fire concern. Put differently, the presence of a Waking Watch did not undermine the concern of a present or imminent danger. Quite the opposite, it was that very concern which required the Waking Watch to begin with.
The court emphasised that the policy required not only an imminent threat but also that immediate remedial works are necessary to prevent destruction or damage within the period of cover. Whether this threshold is met is fact-sensitive; typically, imminent threats necessitate immediate repair or mitigation. Temporary measures such as Waking Watch do not negate the need for remedial works.
Ultimately, the court concluded:
"Vivid’s case on the construction of the policy clause and whether the policy responds has a real prospect of success in relation to all Defects other than Defect 4, and the application for summary judgment is refused."
In respect of Defect 4 (Rockclad bracketry), which was unrelated to fire risk, the Court found in Allianz’s favour and granted summary judgment.
For Defects 1, 2, 3 and 5, the Court accepted that the fire‑related risks created a realistic prospect of imminent damage.
ANALYSIS
Why Did the Court Exclude Defect 4?
Defect 4 involved the risk of deformation and detachment of cladding panels and bracketry. Intuitively, one might say this creates a clear risk of physical damage. However, the court held that the defect did not amount to a fire‑related risk and did not require “immediate remedial measures” to avoid destruction or damage within the policy period.
Two nuanced reasons are at play:
- Immediacy: the deformation risk was progressive, not acute.
- Requirement for immediate works: unlike fire safety defects, the defect did not necessitate urgent intervention to avoid catastrophic loss.
This highlights a key theme in imminent danger cases: the immediacy of required remedial work often drives the outcome more than the nature of the defect itself.
Why Vivid Matters
Similar wording has been scrutinised before, most notably in Manchikalapati & others v Zurich Insurance plc & others [2019] (“Zagora”), and the court’s approach in Vivid aligns with and develops that earlier guidance.
In Zagora, the court held that imminence requires a real and present risk, not a remote or hypothetical possibility. Vivid adopts that framework but clarifies how it applies to fire safety defects, emphasising:
- fire events are inherently unpredictable;
- where fire‑related defects exist, the risk of damage is constant; and
- temporary measures (e.g., Waking Watch) do not remove the underlying risk.
CONCLUSION
The decision in Vivid is consistent with previous case law and provides helpful confirmation that:
- Fire safety defects can constitute imminent danger;
- Temporary measures such as Waking Watch do not exclude immediacy;
- The courts will continue to apply the principles developed in Zagora; and
- Insurers must recognise their role in enabling, rather than hindering, fire safety remediation.
For policyholders, the judgment offers helpful reassurance. For insurers, it is a reminder that narrow constructions of imminent danger are increasingly difficult to sustain.
Importantly, policyholders should not be required to wait for an actual fire incident before their insurance coverage becomes applicable. The judgment clarifies that waiting for harm to occur before responding to the risk is both unreasonable and contrary to the purpose of fire safety provisions.
Chloe Franklin is an Associate at Fenchurch Law
New Guidance on the Scope of RCOs: The Upper Tribunal’s Judgment in Edgewater (Stevenage) Limited and Others v Grey GR Limited Partnership
Last week, the Upper Tribunal (Lands Chamber) (“UT”) handed down its judgment in a highly-anticipated appeal against a swathe of Remediation Contribution Orders (“RCOs”), providing further guidance on the scope of section 124 of the Building Safety Act 2022 (“BSA”).
In dismissing the appeal on all grounds, Mr Justice Edwin Johnson confirmed that:
- The First-tier Tribunal (“FTT”) have jurisdiction to make RCOs against multiple parties on a joint and several basis, provided that it is just and equitable to do so (which, he was careful to note, will be a “very fact sensitive exercise”);
- The factors which the FTT may take into account when considering whether it is just and equitable to make the order under section 124(1) of the BSA are “very wide” and are not capable of exhaustion;
- Whilst the initial burden is on the applicant to put forward a case as to why it is just and equitable to award an RCO, the evidential burden is ultimately shared between the parties;
- Reference to a building safety risk in section 120(5) of the BSA is a reference to “any risk” which satisfies the conditions of the BSA, and is not a reference to risks above a particular level; and
- The question of whether remedial costs are reasonable will depend on a number of factors, including any reliance on expert reports as to the scope of the works and the time pressure that stakeholders are under to remediate continuing risks to residents.
We highlight our key takeaways for those operating in the construction and property sectors below.
Background to the appeal
The appeal relates to the development of Vista Tower, a residential high-rise building in Stevenage, the freehold of which was sold to the Respondent, Grey GR Limited Partnership (“Grey”) in 2018.
Soon after, post-Grenfell investigations led to the discovery of significant fire safety defects in the building’s external walls and a Remediation Order was issued requiring Grey to remedy those defects by 9 September 2025.
On 24 January 2025, Grey was granted RCOs against 76 corporate entities associated with the developer, Edgewater (Stevenage) Limited (the “Appellants”). Controversially, those RCOs declared each of the 76 Appellants jointly and severally liable for the total sum payable, which was in excess of £13 million.
The RCOs were appealed on a number of grounds.
Joint and several liability for RCOs
The first ground of appeal concerned whether the FTT had the jurisdiction to issue an RCO on a joint and several basis.
The Appellants, in arguing that it did not, relied on the fact that section 124(2) of the BSA describes an RCO as an order against “a specified body corporate or partnership” in the singular, rather than in the plural. In other words, the Appellants said that whilst it is open to the FTT to make a series of orders against different entities, it cannot impose a joint liability under the same order.
Interestingly, in parallel with the RCO application, Grey has commenced proceedings in the High Court (Technology and Construction Court), against the developer and two other Appellants, for a Building Liability Order (“BLO”) pursuant to section 130 of the BSA. Those proceedings have not yet come to trial, but the Appellants’ argument as to the scope of the wording in section 124(2) lead to an interesting analysis of the distinction between RCOs and BLOs.
The UT confirmed that section 130 has a different jurisdiction to section 124, and works in a different way. Section 130 applies where a body corporate has a liability under (a) the Defective Premises Act 1972 or section 38 of the Building Act 1984, or (b) as a result of a building safety risk, and is “fairly rigid in its operation”: the liability to which the original body is subject can be made transmissible to associated parties.
In contrast, under section 124 RCOs are “more flexible and open ended”: it is for the FTT to decide what amount should be paid, and by whom, and on what basis.
Ultimately, Mr Justice Johnson held that the Appellants’ singular interpretation of section 124(2) was too narrow, identifying no reason why it could not be read as a plural. Most significantly, however, he identified an obvious problem with enforcement where one or more respondent is impecunious:
“If one then assumes a situation, which will not be uncommon, where some of the respondents are or may be unable to pay, the applicant party or parties will be left with something resembling a colander, in terms of their ability to recover the total sum ordered to be paid.”
In that scenario, where an applicant is prevented from obtaining the necessary funds for remediation, the statutory purpose of the BSA is clearly frustrated. For that reason, the UT has held that the FTT does have the power to make joint and several RCOs, noting that it will not be the starting position in every case, and that it must carefully consider whether it is just and equitable to do so (which is likely to be a “very fact sensitive exercise”).
Notably, the Appellants also argued that their inability to seek contributions from others in FTT proceedings (pursuant to the Civil Liability (Contribution) Act 1978) was another reason why joint and several liability should not be imposed. However, the UT rejected that argument on the basis that Parliament had intended not to concern itself with the question of contribution in relation to RCOs (but presumably had done so in relation to BLOs, which are pursued via court proceedings) and, in any event, the issue of apportionment/contribution could be dealt with as part of the just and equitable analysis, where circumstances required.
The “just and equitable” test
The Appellants’ secondary position was that it was not just and equitable to grant an RCO as some of the Appellants did not participate in the development, nor profit from it.
The FTT had considered the very limited evidence provided by the Appellants in relation to their corporate structure, and had found that they were part of a “fluid, disorganised and blurred network” which, rather than being financially separate, most likely had a tendency to take from whichever company had money when it was needed by another. The Appellants’ evidence on this point did not impress the UT, with Mr Justice Johnson describing it as “incomplete and unsatisfactory”, a factor which appears to have weighed heavily on him when considering the grounds of appeal.
In rejecting the argument that it was not just or equitable for the FTT to award the RCO on a joint and several basis, Mr Justice Johnson confirmed that the FTT’s discretion is “very wide” and that, in drafting section 124(1), Parliament had chosen not to list or limit the factors to be taken into account. He remarked that, if he were to try and list the factors on which the FTT might rely, he “would be at risk of committing the basic error of attempting to re-write Section 124(1)”.
Mr Justice Johnson also highlighted that, whilst the initial burden is on an applicant to put forward its case as to why it is just and equitable to make an RCO, that burden is not to be overstated, and it is for a respondent to put its case in response.
The meaning of “building safety risk” in section 120(5) of the BSA
One area in which the UT disagreed with the FTT was the meaning of “building safety risk” under section 120(5) of the BSA.
The FTT had defined a “building safety risk” restrictively, as any risk which exceeded the “low” or tolerable category used in PAS9980 assessments. Mr Justice Johnson was careful to correct that interpretation however, advising that section 120(5) “means what it says”.
In other words, it does not refer to any particular level of risk and refers instead to any risk which is captured by the BSA. If Parliament had intended to refer to risk at a particular level, it would have done so (as it had in other parts of the legislation). As no particular level of risk had been referenced in section 120, it was not for the FTT to rewrite the BSA.
Whilst not mentioned in the judgment, that analysis is consistent with the FTT’s recent decision of 6 January 2026 in Canary Riverside Estate (LON/00BG/BSA/2024/0005 LON/00BG/BSB/2024/009) which held that “any risk” of fire spread or structural collapse, however small, is enough to constitute a building safety risk under section 120.
The reasonableness of remedial costs
Finally, the Appellants challenged the reasonableness of one aspect of the costs incurred. Namely, the removal of combustible foam insulation from cavity walls.
Expert witnesses had agreed that, from a purely technical perspective, it had been disproportionate to remove the foam altogether, and a cheaper and simpler solution would have been to leave it in place with the addition of a cavity barrier as effective fire stopping.
In considering the reasonableness of the works, the FTT had placed “significant weight” on the agreement of the experts, but had also considered other factors that may have affected the scope of the works, including the need to implement the remedial scheme quickly in order to minimise the continuing risk to residents living in unsafe conditions, and the fact that Grey’s PAS9980 report had concluded that the foam insulation was “high risk” and needed to be removed.
The Upper Tribunal held that the costs incurred in removing the insulation were reasonable on the basis that it was not for Grey to question the advice of its fire engineers. Rather, it was reasonable for Grey to have relied upon the PAS9980 report and not to have revisited it later in order to reduce the scope of works, especially considering the time pressure it was under from the Secretary of State to minimise the continuing risk to residents.
Implications
The decision reads as a salutary tale to developers and their associates: not only does the FTT have jurisdiction to award RCOs on a joint and several basis, but that jurisdiction may extend to associates who have not participated in the development, or profited from it.
Clearly, that is more likely to be the case where (a) there is a question mark over whether the developer is financially able to meet its responsibility under the RCO, or (b) where respondents fail to provide a comprehensive explanation of corporate structures, or are part of financially fluid networks that cannot easily be isolated, all of which were significant factors in the UT’s reasoning.
Whether the Courts adopt the same analysis in relation to BLOs remains to be seen, although that is a significant possibility given how other UT judgments have been upheld by the Courts (for instance, Adriatic Land 5 Ltd v Long Leaseholders at Hippersley Point [2025] EWCA Civ 856).
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