{"id":2370,"date":"2026-02-03T14:56:08","date_gmt":"2026-02-03T14:56:08","guid":{"rendered":"https:\/\/fenchurchlaw.com\/en-uk\/?p=2370"},"modified":"2026-02-03T14:56:08","modified_gmt":"2026-02-03T14:56:08","slug":"new-guidance-on-the-scope-of-rcos-the-upper-tribunals-judgment-in-edgewater-stevenage-limited-and-others-v-grey-gr-limited-partnership","status":"publish","type":"post","link":"https:\/\/fenchurchlaw.com\/en-uk\/new-guidance-on-the-scope-of-rcos-the-upper-tribunals-judgment-in-edgewater-stevenage-limited-and-others-v-grey-gr-limited-partnership\/","title":{"rendered":"New Guidance on the Scope of RCOs: The Upper Tribunal\u2019s Judgment in Edgewater (Stevenage) Limited and Others v Grey GR Limited Partnership"},"content":{"rendered":"

Last week, the Upper Tribunal (Lands Chamber) (\u201cUT<\/strong>\u201d) handed down its judgment in a highly-anticipated appeal against a swathe of Remediation Contribution Orders (\u201cRCOs<\/strong>\u201d), providing further guidance on the scope of section 124 of the Building Safety Act 2022 (\u201cBSA<\/strong>\u201d).<\/p>\n

In dismissing the appeal on all grounds, Mr Justice Edwin Johnson confirmed that:<\/p>\n

    \n
  1. The First-tier Tribunal (\u201cFTT<\/strong>\u201d) 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 \u201cvery fact sensitive exercise<\/em>\u201d);<\/li>\n
  2. 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 \u201cvery wide<\/em>\u201d and are not capable of exhaustion;<\/li>\n
  3. 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;<\/li>\n
  4. Reference to a building safety risk in section 120(5) of the BSA is a reference to \u201cany risk<\/em>\u201d which satisfies the conditions of the BSA, and is not a reference to risks above a particular level; and<\/li>\n
  5. 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.<\/li>\n<\/ol>\n

    We highlight our key takeaways for those operating in the construction and property sectors below.<\/p>\n

    Background to the appeal<\/u><\/strong><\/p>\n

    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 (\u201cGrey<\/strong>\u201d) in 2018.<\/p>\n

    Soon after, post-Grenfell investigations led to the discovery of significant fire safety defects in the building\u2019s external walls and a Remediation Order was issued requiring Grey to remedy those defects by 9 September 2025.<\/p>\n

    On 24 January 2025, Grey was granted RCOs against 76 corporate entities associated with the developer, Edgewater (Stevenage) Limited (the \u201cAppellants<\/strong>\u201d). Controversially, those RCOs declared each of the 76 Appellants jointly and severally liable for the total sum payable, which was in excess of \u00a313 million.<\/p>\n

    The RCOs were appealed on a number of grounds.<\/p>\n

    Joint and several liability for RCOs<\/u><\/strong><\/p>\n

    The first ground of appeal concerned whether the FTT had the jurisdiction to issue an RCO on a joint and several basis.<\/p>\n

    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 \u201ca specified body corporate or partnership\u201d <\/em>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.<\/p>\n

    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 (\u201cBLO<\/strong>\u201d) pursuant to section 130 of the BSA. Those proceedings have not yet come to trial, but the Appellants\u2019 argument as to the scope of the wording in section 124(2) lead to an interesting analysis of the distinction between RCOs and BLOs.<\/p>\n

    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 \u201cfairly rigid in its operation\u201d<\/em>: the liability to which the original body is subject can be made transmissible to associated parties.<\/p>\n

    In contrast, under section 124 RCOs are \u201cmore flexible and open ended\u201d<\/em>: it is for the FTT to decide what amount should be paid, and by whom, and on what basis.<\/p>\n

    Ultimately, Mr Justice Johnson held that the Appellants\u2019 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:<\/p>\n

    \u201cIf 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.\u201d<\/em><\/p>\n

    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 \u201cvery fact sensitive exercise<\/em>\u201d).<\/p>\n

    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.<\/p>\n

    The \u201cjust and equitable\u201d test<\/u><\/strong><\/p>\n

    The Appellants\u2019 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.<\/p>\n

    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 \u201cfluid, disorganised and blurred network\u201d<\/em> 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\u2019 evidence on this point did not impress the UT, with Mr Justice Johnson describing it as \u201cincomplete and unsatisfactory<\/em>\u201d, a factor which appears to have weighed heavily on him when considering the grounds of appeal.<\/p>\n

    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\u2019s discretion is \u201cvery wide<\/em>\u201d 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 \u201cwould be at risk of committing the basic error of attempting to re-write Section 124(1)\u201d<\/em>.<\/p>\n

    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.<\/p>\n

    The meaning of \u201cbuilding safety risk\u201d in section 120(5) of the BSA<\/u><\/strong><\/p>\n

    One area in which the UT disagreed with the FTT was the meaning of \u201cbuilding safety risk\u201d<\/em> under section 120(5) of the BSA.<\/p>\n

    The FTT had defined a \u201cbuilding safety risk<\/em>\u201d restrictively, as any risk which exceeded the \u201clow\u201d or tolerable category used in PAS9980 assessments. Mr Justice Johnson was careful to correct that interpretation however, advising that section 120(5) \u201cmeans what it says<\/em>\u201d.<\/p>\n

    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.<\/p>\n

    Whilst not mentioned in the judgment, that analysis is consistent with the FTT\u2019s recent decision of 6 January 2026 in\u00a0Canary Riverside Estate<\/em>\u00a0(LON\/00BG\/BSA\/2024\/0005 LON\/00BG\/BSB\/2024\/009) which held that \u201cany risk\u201d of fire spread or structural collapse, however small, is enough to constitute a building safety risk under section 120.<\/p>\n

    The reasonableness of remedial costs<\/u><\/strong><\/p>\n

    Finally, the Appellants challenged the reasonableness of one aspect of the costs incurred. Namely, the removal of combustible foam insulation from cavity walls.<\/p>\n

    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.<\/p>\n

    In considering the reasonableness of the works, the FTT had placed \u201csignificant weight\u201d 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\u2019s PAS9980 report had concluded that the foam insulation was \u201chigh risk\u201d and needed to be removed.<\/p>\n

    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.<\/p>\n

    Implications<\/u><\/strong><\/p>\n

    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.<\/p>\n

    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\u2019s reasoning.<\/p>\n

    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\u00a0[2025] EWCA Civ 856<\/em>).<\/p>\n

    Authors<\/strong><\/p>\n

    Rob Goodship, Partner<\/a><\/p>\n

    Abigail Smith, Associate<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

    Last week, the Upper Tribunal (Lands Chamber) (\u201cUT\u201d) handed down its judgment in a highly-anticipated appeal against a swathe of […]<\/p>\n","protected":false},"author":70,"featured_media":2371,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[3],"tags":[247],"class_list":["post-2370","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-construction-risks"],"acf":[],"yoast_head":"\nNew Guidance on the Scope of RCOs: The Upper Tribunal\u2019s Judgment in Edgewater (Stevenage) Limited and Others v Grey GR Limited Partnership - Fenchurch Law UK<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/fenchurchlaw.com\/en-uk\/new-guidance-on-the-scope-of-rcos-the-upper-tribunals-judgment-in-edgewater-stevenage-limited-and-others-v-grey-gr-limited-partnership\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"New Guidance on the Scope of RCOs: The Upper Tribunal\u2019s Judgment in Edgewater (Stevenage) Limited and Others v Grey GR Limited Partnership - 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