The recent First-tier Tribunal decision in Secretary of State for Housing, Communities and Local Government v EDR Builders / Hollybrook has attracted attention as the first Remediation Contribution Order obtained by central Government, and for the scale of the award.
Its real significance, however, lies elsewhere.
The decision offers important guidance on a recurring issue across building safety disputes: to what extent a building owner’s chosen remedial strategy can be second-guessed after the event, particularly where it is said that the works could – and should – have been carried out more cheaply.
Although the case arises in the context of a Remediation Contribution Order (RCO), the underlying principles are of much wider relevance. For local authorities and registered providers, they go to the heart of recovery strategies across contractual claims, professional negligence actions, building warranty claims and statutory routes.
The decision in context
In Hollybrook, the Tribunal was asked to consider whether remediation costs of approximately £3.7 million should be reduced on the basis that a cheaper alternative scheme could have been adopted.
That argument will be familiar to anyone involved in building safety disputes.
The Tribunal rejected it in clear terms. The relevant question was not whether a more economical solution could be identified with the benefit of hindsight, but whether the works actually carried out fell within “the band of reasonable responses” to the defects. If they did, the fact that a cheaper option may have existed was not, in itself, a basis for reducing recovery.
That is a practical, and significant, finding.
A common battleground across multiple claim routes
In practice, these issues rarely arise in isolation.
For local authorities and registered providers managing defective buildings, cost recovery is often pursued through parallel or overlapping routes, including:
- claims against contractors under design and build contracts;
- professional negligence claims against architects and consultants;
- claims under structural warranties; and
- increasingly, statutory claims such as RCOs.
Different routes bring different legal frameworks. But the same core dispute frequently arises – Was the claimant’s remedial response justified – or has it done more than was necessary?
Respondents, whether contractors, consultants or insurers, will often seek to reduce exposure by arguing:
- that a more limited scheme would have sufficed;
- that the works undertaken go beyond what was required to address the defect; or
- that the claimant has failed to mitigate its loss.
These arguments are often framed slightly differently depending on the claim: “mitigation”, “betterment”, “scope of works” or “cover”- but they are, in substance, the same.
Reasonableness, not perfection
The significance of Hollybrook is that it reinforces a more grounded approach to those arguments.
The Tribunal’s focus on whether the works fell within a reasonable range of responses reflects the reality that remediation decisions are rarely straightforward. They are taken:
- against the backdrop of resident safety concerns;
- often under regulatory and reputational pressure;
- with incomplete or evolving technical information; and
- in circumstances where delay carries its own risks.
In that context, the identification of a cheaper or more limited scheme after the event is not, of itself, determinative.
That logic is equally applicable in claims against the professional team and contractors. Arguments based on hindsight – suggesting that a different design, specification or remedial approach ought to have been adopted – must be viewed through the lens of what was reasonable at the time, not what can be constructed later with the benefit of full information.
Implications for contractor and professional team claims
In contractual and negligence claims, these issues often arise under the heading of mitigation.
Employers are required to take reasonable steps to mitigate their loss. But that does not require them to pursue the cheapest possible solution, nor to take on additional risk in doing so. The question is whether the steps taken were reasonable in the circumstances.
The Hollybrook approach aligns with that principle. It recognises that:
- there may be a range of reasonable remedial options;
- different experts may legitimately take different views; and
- a claimant is not to be penalised simply because another solution can be identified after the fact.
Similarly, arguments of betterment are frequently advanced but often not supported by robust evidence. As the Tribunal’s approach indicates, it is not enough to assert that works have gone beyond repair. The extent and value of any betterment must be properly established.
The position in building warranty claims
The same underlying issue frequently arises in building warranty disputes.
Warranty providers will typically scrutinise:
- whether the claimed works are attributable to insured defects;
- whether they fall within the scope of cover; and
- whether the costs are properly recoverable.
Within that framework, it is common for insurers to argue that the remedial scheme is excessive, or that a more limited intervention would have been sufficient.
Again, the Tribunal’s reasoning is instructive. Where a policyholder can demonstrate that the adopted scheme fell within a reasonable range of responses to the defects and associated risks, attempts to deconstruct that scheme by reference to hypothetical alternatives may carry less weight.
This is particularly relevant in fire safety cases. Where defects undermine the fire strategy, the least intrusive option is not always the most appropriate. Decisions are often driven by risk tolerance, regulatory expectations and the potential consequences of failure.
A practical point on process and evidence
One further notable aspect of the decision was the Tribunal’s treatment of the suggestion that a PAS 9980 assessment should have been undertaken before works commenced. The Tribunal rejected the idea that it was unreasonable not to revisit the scheme on that basis, particularly where doing so would have caused delay.
This reflects a broader theme.
In many building safety disputes, respondents seek to rely on procedural or technical criticisms of the route taken by the claimant. While those points may be relevant, they are unlikely to be decisive if the overall remedial strategy can be shown to have been reasonable in context.
For claimants, the message is clear: contemporaneous evidence matters. Decision-making processes, expert advice, and the rationale for selecting a particular scheme should be clearly documented. That evidence is often critical in demonstrating that the chosen approach sits within the reasonable range.
Recovery strategy: A joined-up approach
For local authorities and registered providers, the key takeaway is not confined to RCOs.
The same principles apply across the full spectrum of recovery routes. Whether the claim is pursued against:
- a contractor;
- a member of the professional team;
- a warranty provider; or
- an associated entity under the Building Safety Act,
the ability to demonstrate that the remediation strategy was a reasonable response to the defects and associated risks is likely to be central.
In practice, that requires a joined-up approach:
- technical advice aligned with legal strategy;
- early consideration of how decisions will be evidenced; and
- a clear understanding of how different recovery routes interact.
Conclusion
Hollybrook is not, on its face, a building warranty case, nor is it concerned with contractual liability in the traditional sense. But its reasoning has wider application.
It is a reminder that recovery should not be undermined by retrospective comparisons with cheaper, theoretical alternatives. The focus is on whether the claimant acted reasonably in responding to the defects it faced.
For those responsible for managing building safety risk across large portfolios, that is a point of real practical importance.
Remediation decisions are taken in real time, often under significant pressure. The law, as this decision illustrates, is capable of recognising that reality.
About the author
Greg Carter is a Partner in the Construction Team at Winckworth Sherwood LLP. He specialises in building safety and complex building defect claims, with particular expertise in building warranty disputes and insurer litigation within the construction sphere. If you would like to discuss any of the issues raised in this article, please feel free to contact him.
Disclaimer
This article is intended for general information purposes only and does not constitute legal advice. Specific advice should be sought in relation to particular circumstances.