Redrow PLC & Ors, R (On the Application Of) v Secretary of State for Levelling Up, Housing and Communities

Factual and Procedural Background

This appeal arises from an order dated 7 July 2023, dismissing the appellants' renewed application for permission to bring judicial review proceedings challenging a decision dated 26 August 2022 by the respondent. The decision allocated funds from the Building Safety Fund ("BSF") to interested parties to carry out major cladding remedial works on two high-rise developments built by the appellants. If lawful, the appellants face a prima facie liability to reimburse the BSF approximately £30 million. The BSF was established following the Grenfell Tower disaster to fund remediation of unsafe cladding on high-rise residential buildings where responsible entities are unwilling or unable to pay. The appellants had signed a pledge committing to remediation and reimbursement obligations but disputed their liability in respect of the two developments in question, Hemisphere and Jupiter 2, where insurers had accepted liability for the defects under relevant insurance policies. The respondent proceeded with BSF funding allocations despite ongoing insurance claims and the appellants’ refusal to reimburse the BSF. The appellants initiated judicial review proceedings challenging the lawfulness and fairness of the funding allocation decision. The claim was initially refused on papers and on renewal following a hearing, leading to this appeal.

Legal Issues Presented

1. Whether the appellants have the necessary standing to bring the judicial review claim.
2. Whether the claim was brought promptly within the applicable time limits.
3. Whether the respondent's decision to allocate BSF funds was lawful, specifically whether it complied with the BSF guidance and properly considered the insurers' position and the urgency of remedial works.
4. Whether the decision-making process was fair, including whether the appellants had a proper opportunity to participate and whether adequate reasons were provided for the decision.

Arguments of the Parties

Appellants' Arguments

• The appellants contended that the BSF guidance required that funding only be allocated where responsible entities were unwilling or unable to pay, and that the respondent failed to properly consider the insurers’ acceptance of liability, which made the appellants not "unable" to pay.
• They argued the respondent’s decision was unlawful for not following the BSF guidance and that the funding allocation should not have been made while insurance claims were unresolved.
• The appellants asserted they lacked a contractual obligation to reimburse the BSF in respect of the two developments and therefore had standing to challenge the decision.
• They claimed the procedure was unfair as they were denied proper participation and adequate reasons for the decision.

Respondent's Arguments

• The respondent submitted that the appellants lacked standing as they were strangers to the funding decision and had expressly not committed to reimburse the BSF for the two developments.
• It was argued that the appellants delayed bringing the claim and that the claim was not brought promptly.
• The respondent maintained the decision was lawful and complied with the BSF guidance, which only required that responsible entities take all reasonable steps to recover costs, not exhaust all avenues.
• The respondent emphasized the urgency of remedial works and the need to allocate funding promptly to ensure residents’ safety.
• The respondent contended the appellants had ample opportunity to participate and were aware of the reasons for the decision.

Table of Precedents Cited

Court's Reasoning and Analysis

The court first addressed standing, concluding that the appellants had a sufficient interest due to the significant financial consequences of the funding decision, despite lacking contractual rights at the time. The court noted that future cases would be governed by the Deed of Bilateral Contract (DBC), which includes limited challenge provisions, but this did not affect standing in the present case.

Regarding promptness, the court found the claim was brought within the statutory time limit and that the appellants were justified in waiting for a promised substantive response from the respondent before issuing the pre-action protocol letter. The court rejected arguments that the delay caused prejudice or that earlier action would have altered the outcome.

On lawfulness, the court held that the BSF guidance was relevant and that parties affected by BSF funding decisions were entitled to expect adherence to it. The court rejected the appellants’ interpretation that funding could only be allocated once all claims against insurers were exhausted, finding instead that the guidance required only that all reasonable steps be taken to recover costs. The court emphasized the importance of urgency in the BSF’s objectives, concluding that the respondent lawfully allocated funds given the insurers’ delay in payment and the need to commence remedial works promptly.

On fairness, the court found the appellants had ample opportunity to participate prior to the decision and were aware of the reasons for it, as these had been clearly communicated in extensive correspondence. Although the respondent failed to provide a promised detailed response to a key letter, the court concluded this did not render the decision unlawful because the principal objections had been considered and answered beforehand.

Holding and Implications

The court’s final decision was to DISMISS THE APPEAL.

This means the respondent’s decision to allocate funds from the BSF to the interested parties was lawful, fair, and made in accordance with the BSF guidance. The appellants have standing to challenge such decisions, and claims must be brought promptly, but in this case the appellants’ grounds failed on both lawfulness and procedural fairness. The decision confirms the importance of urgency in BSF funding and clarifies that unresolved insurance claims do not preclude the lawful allocation of BSF funds. No new precedent was established beyond the specific application of existing principles to the BSF context, and the ruling primarily affects the parties by upholding the funding allocation and the appellants’ obligation to reimburse the BSF.