IN Brief:
- Five Urban Splash-associated entities have been ordered to contribute a combined £46,500,650 towards remediation at seven Manchester buildings.
- The tribunal accepted £60.64m in reasonable remediation expenditure before applying reductions and adjustments to the final orders.
- The decision examines the circumstances in which developers and associated companies can be required to fund historic building safety remediation.
Five entities associated with Urban Splash have been ordered to contribute £46.5m towards fire-safety remediation at seven Manchester residential buildings, following a First-tier Tribunal decision under the Building Safety Act 2022.
The tribunal issued remediation contribution orders totalling £46,500,650 on 5 November, concluding proceedings brought by the Secretary of State for Housing, Communities and Local Government. The applications concerned the recovery of public money spent addressing historic building defects, together with the responsibilities of developers and associated companies.
The seven buildings were developed between approximately 2000 and 2008. They comprise Burton Place, the Moho Building, the Chips Building, Emmeline House, Box Works, the Christabel Building, and Sylvia House.
Investigations identified fire-safety deficiencies involving combustible materials, inadequate cavity barriers, ineffective fire stopping, and failures of compartmentation. The defects affected elements intended to prevent or restrict the spread of fire and smoke through the buildings.
Fire compartmentation relies on the construction of barriers between different areas, including walls, floors, and the junctions between structural elements. Openings for pipes, ducts, cables, and other services require appropriate fire stopping to maintain the intended performance of those barriers.
Cavity barriers serve a related function within concealed spaces. Where barriers are absent, incorrectly installed, or otherwise ineffective, fire may spread through cavities and bypass parts of the building's fire-protection strategy.
Combustible materials can introduce additional hazards, depending on their location, construction, and interaction with other components. The remediation programme addressed a combination of these defects rather than a single isolated problem affecting every building in the same way.
Following the identification of the deficiencies, government funding was used to carry out remediation under the Building Safety Fund. The fund was established in 2020 to support work addressing serious fire-safety risks in eligible residential buildings following the Grenfell Tower fire.
The tribunal accepted that £60,638,548, including VAT, had been reasonably incurred or was expected to be incurred on the remediation works. Approximately £52.5m had been provided through the Building Safety Fund, but the orders ultimately made against the respondents totalled £46.5m after reductions and adjustments.
The distinction between accepted remediation expenditure and the amount ordered for repayment is significant. The tribunal was required to consider the reasonable costs of the works and then determine whether, and to what extent, particular respondents should be required to contribute under the legislation.
The five respondents subject to orders are Urban Splash Limited, Urban Splash Developments Limited, Urban Splash Group Holdings Limited, Urban Splash Work Limited, and Stubbs Mill LLP. The tribunal examined their individual circumstances and relationships with the developments before determining whether contribution orders were appropriate.
No orders were made against four other respondents: TBI 2000 Limited, TM Freeholds Limited, SURE Residential A Limited, and SURE Residential LLP. Their treatment demonstrates that the statutory test did not produce identical outcomes for every company named in the proceedings.
Section 124 of the Building Safety Act permits a remediation contribution order where the tribunal considers it just and equitable. The legislation identifies categories of parties that may be required to contribute, including developers and certain entities associated with them.
Qualifying as a developer or associated company does not automatically determine liability. The tribunal must still consider the relevant circumstances before deciding whether an order should be made, including the relationship between the respondent, the original development, and the remediation expenditure.
That distinction was particularly important in the Urban Splash proceedings because the respondents occupied different positions within the wider corporate structure. Some were connected with the original development activities, while others had relationships requiring separate consideration under the statutory provisions.
The tribunal also examined the reasonableness of the remediation programme. Urban Splash challenged aspects of the work and argued that alternative approaches could have addressed the defects at lower cost.
The decision did not require the chosen remediation scheme to be the least expensive conceivable option. Instead, the tribunal assessed whether the expenditure fell within a reasonable professional response to the defects identified and the circumstances in which the work was undertaken.
Remediation strategies can differ in the extent of investigation, material replacement, temporary protection, access arrangements, and reinstatement required. Assessing expenditure therefore involves more than comparing the headline cost of alternative construction methods; the available evidence, safety requirements, and technical uncertainties must also be considered.
The tribunal accepted the government's position on the fire-safety evidence and concluded that the remediation expenditure was reasonable. It nevertheless reduced the amount recoverable after considering wider circumstances, including failings in government regulation and oversight before the building safety crisis.
A 10% reduction formed part of the calculation, alongside other adjustments. The tribunal expressly distinguished this from a finding that government was legally responsible for a fixed percentage of the original construction defects.
Urban Splash had also provided assistance during the investigations into the buildings. The tribunal acknowledged that cooperation while maintaining a distinction between helping to identify defects and accepting financial responsibility for the resulting remediation.
Urban Splash has described the financial liability as significant relative to the size of its business and expressed disappointment that the orders extend to entities which it says played no part in the original development of the affected buildings.
The company is reviewing the decision and has indicated that it wishes to establish a constructive way forward with the government while protecting its continuing development activities and employees.
The orders demonstrate the extent to which remediation liabilities can arise from projects completed many years before the introduction of the Building Safety Act. They also show that associated-company liability is subject to an individual statutory assessment rather than automatically following corporate ownership or branding.
With the total contribution fixed at £46,500,650, the immediate question concerns how the respondents will address the orders and the government's recovery of the remediation expenditure. Any further legal or commercial steps will need to be assessed against the tribunal's findings and the circumstances of the individual entities.
