Retrospectivity under the Building Safety Act 2022: A note on the Court of Appeal hearings in Adriatic Land 5 Ltd v Long Leaseholders at Hippersley Point and Stratford Village Development Partnership v Triathlon Homes LLP

This post discusses a key overlapping issue raised in the appeals from the Upper Tribunal decision in Adriatic Land v Hippersley Point and the First Tier Tribunal (FTT) decision in Triathlon Homes LLP v Stratford Village Development Partnership: do the leaseholder protections in the Building Safety Act 2022 (BSA) apply only to costs incurred after 28 June 2022 (the ‘commencement date’ of Part 5 which includes the key provisions at issue, paragraph 9 of Schedule 8 and section 124)? Both appeals were heard by the Court of Appeal (Newey, Nugee, Holgate LJJ) in the week of 17 March 2025. As we await judgment this post outlines the retrospectivity issues discussed during the hearing.

Paragraph 9 states that ‘no service charge is payable under a qualifying lease in respect of legal or other professional services relating to the liability…of any person incurred as a result of a relevant defect’. In Adriatic Land, the Upper Tribunal held (discussed here) that this prevented the landlord recovering the costs of a dispensation application incurred before the commencement date. If the Court of Appeal agrees, this is likely to signpost the approach to the leaseholder protections in Schedule 8 generally, which include protection against the hugely significant costs involved in remediation projects.

Section 124(1) provides that the FTT may make a remediation contribution order (RCO) if it considers it ‘just and equitable to do so’. The RCO requires a specified body ‘to make payments … for the purpose of meeting costs incurred or to be incurred in remedying, or otherwise in connection with, relevant defects’. Relevant defects (for both para 9 and section 124) are those stemming from works completed during the 30 year period ending with the commencement date, ie ‘backward looking’ defects. The RCO made against SVDP (the developer) and Get Living (associated with the freeholder and landlords) in Triathlon Homes (discussed here) included costs incurred before the commencement date.

Both appeals therefore involve the retrospectivity question. The Triathlon appeal also concerns whether the FTT had wrongly exercised the ‘just and equitable’ discretion, but this is not discussed here.  

Some sections of the BSA are explicit that the provision has retrospective effect. So, for example, section 135, which extends the limitation period for claims under the Defective Premises Act 1972 (DPA) from 6 years to 30 years retrospectively, states that it is to be ‘treated as always having been in force’. Section 149 (liability for past defaults relating to cladding products) is similarly clear. Both sections also have ‘safeguards’ (referred to as such during the hearing) that require the court to dismiss an action if this is necessary to avoid a breach of the defendant’s Convention rights. Neither section 124 nor para 9 have the Convention rights safeguard or express statements about retrospectivity; so the question of retrospectivity turns on what the statute means, having regard to the ordinary principles of statutory construction.

The starting point is to look to the plain meaning of the words used. Opinions differed. Some counsel argued the provisions are clear: there are no temporal limitations, and retrospectivity was intended.  If, however, the words are ambiguous the task of the court is to give effect to Parliament’s purpose, reading the provisions in the context of the Act as a whole and in the historical context of the situation that led to its enactment (see Lord Bingham in R (Quintavalle) v Secretary of State for Health). There is a general presumption that Parliament does not intend a statute to have retrospective effect, based on concepts of fairness and legal certainty (see generally on retrospectivity of legislation, Wilson and others v. Secretary of State for Trade and Industry). However, there is a ‘sliding scale’ or ‘spectrum’ of retrospectivity’. If the statute changes the substantive law in relation to past events and produces unfair outcomes, the presumption is powerful and it is expected that Parliament would make clear that a retrospective impact is intended. Drawing on Craies on Legislation, counsel for the respondents in Adriatic Land suggested this was legislation providing for future consequences of past events and was not necessarily ‘retrospective’. There was, therefore, considerable discussion of the form of retrospectivity (if any) engaged and therefore the weight that should be attached to the presumption.

A witness statement from Mr Murphy, Head of Enforcement Strategy in the Safer and Greener Buildings Group in the Ministry of Housing, Communities & Local Government, explains the legislation is an ‘exceptional intervention’ to address the ‘unique circumstances surrounding the building safety crisis’ and is part of a set of legislative and non-legislative interventions to resolve the problem. It makes clear that retrospectivity is fundamental to the ability of the BSA to address historic defects during the 30 year period leading up to the Act with the overall goal to ensure that those with the broadest shoulders should pay.  It also explains the clear intent to protect leaseholders from costs (including legal costs) in relation to ‘relevant defects irrespective of when these costs were incurred or service charge demands issued’. During the hearing there was discussion of the extent to which external aids can be used as part of statutory interpretation and the weight to be given both to this witness statement and to the Explanatory Notes. There is a strong argument that the latter have a reduced weight because they were produced several weeks after Royal Assent and therefore were not approved by Parliament.

If, applying these principles of statutory construction, paragraph 9 has retrospective effect, a further issue was whether this would amount to a breach of the appellant’s Convention rights under Article 1 of Protocol 1. Mr Murphy’s witness statement states that the nuanced approach of the leaseholder protections means that the ‘human rights balance is intrinsically built into the policy’. Whether there is a breach will depend on how the A1P1 ‘possession’ is defined: is it broadly understood as the appellant’s property right, or in an atomised manner as the ‘accrued contractual right to payment’? This plays into the question of whether there is a deprivation or ‘control of use’, and whether an interference without compensation will involve a breach. If after that there is a prima facie breach, the further question is whether, pursuant to section 3 of the Human Rights Act 1998, words can be ‘read into’ paragraph 9 to avoid a breach.  

Counsel for the Secretary of State (as intervener) argued for an intermediate form of retrospectivity – that adopted by the Upper Tribunal in Adriatic Land. Thus, paragraph 9 prevents the landlord claiming from the leaseholder service charge sums outstanding at the commencement date, even in respect of costs incurred before then. This position is reflected in [986] of the Explanatory Notes accompanying the BSA (as applicable to Schedule 8 generally, not just paragraph 9). Admittedly it would lead to differential treatment between, as the Upper Tribunal put it, ‘diligent and less diligent service charge payers’ but if section 124 can be used for pre-commencement costs the diligent leaseholders who have already paid can apply for a RCO, as envisaged in [1012] of the Explanatory Notes.

This brief blog post gives a flavour of the complexity of the issues that will be addressed in the judgment which will, of course, also devote significant time to the ‘just and equitable’ discretion in section 124. Argument on this point canvassed whether RCOs should be made when the work is already underway and funded (by the ‘public purse’) and the factors relevant to the FTT’s discretion such as whether the applicant’s motive is relevant,  and whether is it unfair for an applicant to seek an RCO rather than pursue other remedial options first. No doubt many are eagerly awaiting the outcome in the Court of Appeal, but given its importance it would not be surprising if we have to wait even longer for the final say to be given by the Supreme Court.