The Cladding Bill
Building safety lawyers have spent four years patching gaps in the Building Safety Act 2022 and asking tribunals what Parliament meant. The Building Safety (Remediation of Unsafe Cladding etc) Bill is the government's answer.
A duty with teeth
The headline is a new statutory duty on "responsible entities": whoever must repair or maintain the external walls under a lease or legislation. It covers buildings with at least two dwellings that are at least 11 metres high or five storeys, completed before 28 June 2022.
Within ten months, the responsible entity must obtain a compliant fire risk assessment of the external walls from a suitable professional. It must then implement interim measures and remediate "as soon as reasonably practicable". "Properly remediated" means the risk is tolerable on a permanent basis, assuming full occupation and no waking watch. Cue the familiar question: what does "tolerable" mean?
Non-compliance is a criminal offence carrying up to two years' imprisonment. Regulators can also impose penalties of up to £500,000, repeatable for later periods. Group companies and controlling individuals can be made jointly and severally liable.
Pledge developers remediating under the Self Remediation Terms fall outside the new duties altogether. A carrot for those who signed; a stick for everyone else.
Regulators get bigger sticks
Local housing authorities, fire and rescue authorities and the Building Safety Regulator must now use their powers to secure remediation. They can also compel people to attend interview (not just invite them). Remediation Orders gain teeth too, with tribunal penalties of up to £500,000. Hopefully this will see a move away from powers exercised under the Housing Act 2004 which can cut across wider building safety legislation and schemes.
Retrospective? Partly. The penalties can apply to existing Remediation Orders, but not to failures that ended before the provisions came into force. The breach must continue after the new law takes effect.
The backstop
If the responsible party still will not act, the local housing authority or the HCA can seek a remediation management order. This lets the authority do anything the dutyholder could, from letting contracts to taking possession. Then it sends the bill. Its costs, plus a 15% administration charge, are recoverable as a debt and secured by a legal charge, with a power to appoint a receiver. Leaseholders are generally shielded from the administrative costs.
Where there is no effective owner, a tribunal can appoint a section 24 manager if the freehold has escheated or passed as bona vacantia. There are also new notification duties when an owner becomes insolvent.
Product claims: a bigger pool
For litigators, Part 5 is the main event. Section 149 now turns on "misleading conduct" and "unsafe" products, rather than “defective”. Causation requires only a contribution that is "more than trivial", and that is presumed unless rebutted.
Claimants no longer need a relevant interest in the building. Anyone suffering consequential economic loss can sue, including contractors facing liability, or costs, because of an unsafe cladding product.
Registers, FRAEWs and plans
Medium-rise buildings (11–18 metres, fewer than seven storeys) must be registered. External wall assessments must meet requirements set by regulations, which may adopt a BSI standard. That is the expected route to mandatory PAS 9980. The HCA must audit any assessment recommending works, and the remediation duties wait until it has done so. Responsible entities must also publish remediation compliance plans naming timetables, accountable individuals and beneficial owners.
Tidying up the 2022 Act
The Bill defines "self-contained part": a vertical division, capable of independent redevelopment, with services that are or could be independent. It also confirms that no Limitation Act time limit applies to applications for Remediation Orders, Remediation Contribution Orders or Building Liability Orders.
One question remains. Can a BLO be made where the underlying "relevant liability" is itself time-barred? The Bill does not say. Expect someone to test the point.
