Construction sector faces ongoing legal and regulatory change in 2026

Disputes remain firmly at the forefront and show  no signs of slowing downThe construction sector continues to be a focus area for legal and regulatory changes. The Building Safety Act 2022 (“BSA”) altered the landscape, and the changes in the law introduced have given rise to a significant number of fire and building safety disputes. As we discuss further in this chapter, the Supreme Court has now confirmed that developers have a right under the Defective Premises Act 1972 (“DPA”) to recover the costs of remediating buildings from relevant parties in the supply chain and can benefit from the extended limitation periods arising under section 135 of  the BSA. Against a government mantra of swifter fire safety remediation and a 2029 deadline for unsafe cladding removal, the new duties and liabilities introduced under the BSA continue to give rise to significant financial orders against construction businesses, including on a non-fault basis. Additionally, the Remediation Acceleration Plan (RAP) and proposed powers sought under the Remediation Bill, give rise to potentially severe penalties for any failures to remediate buildings within government’s timescales.Such a seismic shift in duties, liabilities and remedies has an equivalent impact on the potential for coverage disputes, particularly in areas of  unchartered territory. Chloe DerrickPartner  Policyholder DisputesJesal ParekhAssociatePolicyholder DisputesZara OkereaforAssociate Policyholder DisputesThe RAP is the government’s central delivery vehicle aimed at fast forwarding the remediation of buildings with unsafe cladding. When first published on 2 December 2024, the RAP highlighted that following the Grenfell tragedy, remediation work had been completed on only 1,436 of the 4,834 unsafe buildings identified at that time.The government’s intention via the RAP is clear.  Every building over 11 metres (11m+) with unsafe cladding must be fixed, and buildings must be fixed faster. Avoidance is not an option.Alongside the RAP objectives first set out in December 2024, on 17 July 2025 the government outlined a range of additional measures aimed at overcoming perceived barriers to remediation. Included in the new measures to be introduced was an outline of the government’s intention to bring forward a Remediation Bill as soon as parliamentary time allows, intended to “create a hard ‘endpoint’ for remediation”. The intended Remediation Bill will include a Legal Duty to Remediate which will compel landlords to remediate buildings within fixed timescales or face criminal prosecution. Where landlords fail to fix buildings, new powers are to be introduced, which will include a Remediation Backstop to ensure works are completed. In tandem with seeking new powers under the Remediation Bill, the government is reviewing Ordnance Survey records to identify relevant 11m+ buildings with potentially unsafe cladding and where necessary, it is contacting relevant parties to review their fire risk assessments and discuss their proposed programme for remediation. ConstructionThe government’s message to the industry is  explicitly stated: avoidance is not an option. By the end of 2029, every 11m+ building with unsafe cladding must either have been remediated, have a date for completion, or its landlords will face strong sanctions and stringent penalties.Under the Legal Duty to Remediate, the RAP now confirms that: 1. It will be an offence for any person to obstruct another from assessing or remediating an unsafe building 11m+ in height, without a reasonable excuse. Any party “whose actions unreasonably hinder progress” may be subject to financial penalties.2. By the end of 2029, any landlord who has failed to remediate a building over 18 metres (18m+) “without reasonable excuse”, will face criminal prosecution, with unlimited fines and/or imprisonment. 3. For buildings between 11 and 18 metres, those that have not been remediated or scheduled for completion by the end of 2029 will be escalated to the government’s regulatory partners “for investigation and enforcement”.4. Local authorities and Homes England will have new Remediation Backstop powers where, if the timeline for completing cladding remediation has passed or if relevant enforcement options have been exhausted, an application may be made to the First-tier Tribunal for such authorities to undertake remedial works themselves directly - with the landlord liable for any costs that would not normally have been covered by government. Of further note, is that, if the landlord does not or cannot pay those costs, then the building may be subject to an enforced sale to fund repayment. 5. There will be a new dedicated Remediation Enforcement Unit within the Building Safety Regulator (“BSR”), to progress the enforcement of 18m+ buildings that are not progressing to the RAP timescales.The government’s proposals are significant.  4Construction5The Policyholder Review 2026Cladding and fire safety claimsWe address elsewhere in this publication the insurability of fines and penalties (see here).Against a backdrop of significant sanctions and in advance of the government’s deadlines, policyholders will be under significant pressure to push forward remediation works and the insurance industry must engage in resolving any disputes that are slowing down remediation, where indemnities are potentially available. Policyholders must push forward any unresolved insurance issues, and where appropriate, take further action to resolve coverage disputes. If insurers fail to engage on coverage and remediation is delayed, policyholders should consider claims under Section 13A of the Insurance Act 2015, to seek payment from insurers for any losses that arise because of a delay in paying sums due within  a reasonable time.Analysis from Solomonic confirms that the number of cladding and fire safety claims issued in the High Court has decreased for the first time in five years.Cladding and fire safety claims - five year reviewHigh Court claims issued 2021 - 202518161412Volume of claims10864201312864Q1Q258 87 7Q32021Total: 31Q4Q1Source: Solomonic App databaseData correct as of 15 December 2025 Excludes Insolvency & Companies ListQ2Q32022Total: 32Q4In conjunction with Solomonic, we have analysed the number of High Court claims issued over  the last five years, which relate to cladding and  fire safety1.Since 2021, there have been 257 such claims issued, with claims peaking in 2023 and 2024, no doubt  due to the introduction of the BSA. For 2025, whilst substantial disputes are ongoing, there has been a significant reduction in the number of High Court claims issued. In circumstances where there are still thousands of buildings to be remediated, that decrease may be the result of the BSA leading parties to seek new remedies in the Property Chamber of the Firsttier Tribunal, which are not available in traditional litigation. As we anticipated last year, it is possible 1 The Solomonic dataset is produced on claims that contain any of the following topics: Grenfell, cladding, fire safety issues, Defective Premises Act,     Building Safety Act or Fire Safety Act. Construction164Q1Q22023Total: 431412Q310Q4Q1149 9Q2Q32024Total: 46Q411Q12Q2Q32025Total: 28Q4that we may see an influx of claims returning to the High Court for determination when disputes arise as to which party should ultimately bear the costs of any Remediation Orders made.Equally, the reduction in claims issued over the past 12 months might be reflective of the Supreme Court’s judgment in URS v BDW. Now that construction supply chain professionals face longtail exposures under the DPA, developers may be opting to conduct remediation works first, with recovery actions to be pursued at a later date. If that is the case, we may see a wave of professional indemnity (PI) claims issued by building owners and developers against their third-party supply chain contractors in due course.Building Safety Act 2022 (BSA)From an insurance coverage perspective:6Construction7The Policyholder Review 2026On 28 June 2022, the BSA introduced sweeping legal and regulatory changes, impacting liability and insurance cover. It is a radical piece of legislation which has reshaped building safety and shifted the law. Since its introduction, the construction industry has had to grapple with extended limitation periods, alongside new duties of care and causes of action. Limitation for Defective Premises Act (DPA)  claims (section 135)As set out in our 2025 edition of The Policyholder Review one of the most widely commented upon shifts in the law following the introduction of the BSA is the significant retrospective extension of the limitation periods that apply to claims pursued  under the DPA. To re-cap, prior to the introduction of the BSA, any cause of action in respect of a breach of duty imposed by the DPA could only be brought within six years from the date the dwelling was completed. As of 28 June 2022 however, the BSA2 applied the following special time limits for certain actions in respect of building defects: • For buildings completed after 28 June 2022, claims can be commenced up to 15 years from the date the right of action accrued; and • For buildings completed prior to 28 June 2022, claims can be commenced up to 30 years from the date the right of action accrued. Additionally, claims can now be brought under the DPA for defective refurbishment or rectification works to existing dwellings, with an applicable 15-year limitation period. For such “further work” claims, the cause of action (and the start of time running) accrues from the date the further work  is finished. All of this means that claims have been reawakened against developers, contractors and consultants, who prior to June 2022, might reasonably have taken the view that they had no liability exposure on historical projects post-Grenfell. 2  3  4  BSA, section 135BDW Trading Ltd v Ardmore Construction Ltd [2024] EWHC 3235 (TCC)• The impact of the new limitation periods  continues to give rise to coverage disputes.  We are increasingly seeing coverage disputes  being resolved on an urgent basis, often as the underlying claim reaches some form of alternative dispute resolution or is subject to a significant litigation step. Additionally, now that building safety claims can be adjudicated following the Technology and Construction Court (TCC) decision in BDW Trading v Ardmore Construction3, the expedited timetables at which adjudicated claims are determined means that policyholders facing building safety claims subject to adjudication are similarly going to be seeking confirmations of coverage much more quickly. • As to the underlying causes of action, the introduction of the BSA and the DPAs extended limitation periods has given rise to claims against a policyholder which would previously have been statute-barred. Whilst each case will turn on its own facts, exclusions for fire safety have developed over time. Although such exclusions have become the norm, rather than the exception, that has not always been the case. Policyholders should revisit their historic firesafety claim notifications from 2017 to review whether any coverage declinatures were because of a fire safety exclusion, or some other exclusion (for example a contractual warranty exclusion). If so, the decision may be disputable, if claims are now being advanced under the DPA.• Similarly, as DPA claims increase in significance due to the renewed limitation periods, policyholders should continue to be alert to potential coverage points being raised around the possibility of whether the DPA imposes strict liability, which would mean that a claimant does not have to prove fault or negligence (with potential implications for professional indemnity cover and whether there is a wrongful act). For policyholders for whom this issue might be relevant, this is a point we raised in The Policyholder Review 2025. At the time of writing, it remains the case that there is no authority from the court which finds that DPA claims are based on a strict liability (fitness for purpose obligation), rather than a duty to use reasonable skill and care. Based on present authority, DPA claims should therefore be indemnifiable under PI policies, as supported by the court’s considerations of reasonable skill and care within the context of a DPA claim as, for example, was observed in Vainker4.ConstructionVainker v Marbank Construction Ltd & Ors [2024] EWHC 667URS Corporation v BDW Trading 8Construction9Amidst the ongoing focus on the scope of construction professionals’ duties of care, the  court is not shying away from setting significant precedents which alter the legal landscape for the construction industry. In December 2024, seven Supreme Court justices sat to determine a number of points of significance under the BSA and DPA, in URS Corporation v BDW Trading5. Judgment was handed down on 21 May 2025, with the justices unanimously dismissing URS’s appeal on all four grounds. In this landmark judgment, the Supreme Court reached a decision that supported developers, and sought to progress swifter remediation of fire safety defects by expanding the scope of liability for remediating defects. Developers now have a right under the DPA to recover the costs of remediating buildings from their contractors and consultants. The Policyholder Review 2026• Appeal Ground 3 - Did URS owe BDW a duty under Section 1(1)(a) of the DPA?: Section 1(1)(a) imposes a duty on persons building dwellings for work conducted to be carried out in a workmanlike or professional manner and with proper materials, so that the dwelling is fit for habitation. URS contended that this duty did not extend to developers as the purpose of the DPA was to protect the purchasers of new dwellings only and it was not intended to be a recourse for developers against their subcontractors, who could use other avenues to bring claims. Again, the Supreme Court rejected this augment, finding that the DPA was intended to encapsulate first owners including those who order the construction of a dwelling (i.e. developers). Therefore, BDW was owed a duty by URS  under the DPA. They can also benefit from the extended limitation periods arising under section 135 of the BSA. Background facts URS had been retained by BDW (a property developer) as the structural design engineer on the construction of 12 residential tower blocks. The tower blocks contained fire safety defects in the form of inadequate structural designs, although by the time BDW discovered this in 2019, it had sold the premises. Nevertheless, prompted by the Grenfell Tower fire, BDW took it upon itself to carry out the remedial works. As URS was responsible for the alleged negligent design of the tower blocks, BDW sought to recover the remediation costs from URS. In March 2020, given its contractual claim against URS was statute barred, BDW brought a tortious claim alleging that URS had breached its duty to exercise reasonable skill and care. BDW was successful at first instance, and on  appeal to the Court of Appeal where it also obtained permission to amend its pleading to include a DPA claim and contribution claims against URS, given the extended limitation period. The Supreme Court’s judgment addressed the following four grounds and in doing so, provided much needed clarity on a consultant’s duty of care in defective premises claim. 5  • Ground 1 - Scope of duty and the “voluntariness principle”: It was agreed between the parties that URS owed BDW a duty of care in tort to avoid pure economic loss (i.e. avoid the costs of structural repairs). The key question in dispute was whether this duty of care extended to losses that had been “voluntarily” incurred by BDW. URS argued that there was no legal liability for BDW to undertake the remedial works and, therefore, the losses were “voluntary”. The Supreme Court rejected this argument, finding that there was no principle in English law that stated that, where a party has incurred losses which it had no legal obligation to assume and which it has incurred voluntarily, it could not seek to recover those losses from another liable third party. Overall, the Supreme Court held that BDW had no “realistic alternative” than to carry out the repair works. Ground 1 was dismissed, finding there was no rule of law that meant the repair costs fell outside the scope of the duty of care or were too remote.• Ground 2 - application of section 135 of the BSA: It was agreed between the parties that section 135 of the BSA applied to a claim brought under section 1 of the DPA. However, URS contended that the retrospective extension should not apply to related claims in negligence, or for contribution. Further, URS’s stance was that, as BDW’s remedial works were carried out voluntarily and prior to the enactment of the BSA, the extended limitation periods should not apply. In contrast, BDW’s position (unsurprisingly) was that the amended limitation periods under the BSA were to be treated as having always been in force. The Supreme Court rejected URS’s argument, observing that it would be “legally incoherent” to have differing limitation positions between claims advanced by homeowners against BDW under the DPA, and claims for negligence and/or contribution by BDW against URS. There was no reason to restrict the application of section 135 of the BSA to claims made under the DPA and in line with the purpose of the BSA, it determined that the retrospectivity should extend to claims in negligence and for contributions. In practice, this means that, for buildings completed prior to 28 June 2022, building safety claims pursued by developers against their subcontractors, equally have a potential 30-year limitation period.• Appeal Ground 4 - Could BDW bring a claim against URS under section 1 of the Civil Liability (Contribution) Act 1978 (“CLA”): In the circumstances of this case, no action had been commenced by the homeowners against BDW. Accordingly, URS argued that a right to recover a contribution does not arise until either a judgment, admission of liability, or settlement, are obtained for the same loss. In contrast, BDW’s stance was that a right to contribution arose at practical completion, when damage was first suffered by a claimant homeowner. Lord Leggatt rejected both positions - finding instead that the right to recover arises when (i) damage is suffered by the claimant for which two parties are liable (“D1” and “D2”), and (ii) D1 must have paid for, been ordered to pay, or agreed to pay, compensation for such damage. A “payment in kind” by way of carrying out remedial works, is sufficient to establish (ii). It is at this point that a cause of action for contribution is crystallised  and the limitation period of two years under  the CLA begins. Further discussion on the decision in URS v BDW can be found here.ConstructionURS Corporation Ltd v BDW Trading Ltd [2025] UKSC 2110Construction11What does this wider liability for remediating fire safety  defects mean for professional indemnity insurance?An influx of claims against construction professionals?Many policyholders (and their insurers) had been monitoring the outcome of URS to establish whether they owe potential longtail liabilities to developers. The outcome is that liabilities under the DPA are now considerably wider in scope, and there is likely to be a wave of professional indemnity claims by building owners and developers against their third-party supply chain contractors.Some of the coverage issues that might arise include:The Policyholder Review 2026• Subrogation: An insurer has a right to bring a claim in an insured’s name to recover a loss it has paid under the policy once the insured has been indemnified. For parties able to pursue recovery actions against the construction supply chain, the operation of the policy’s subrogation clause will be highly relevant, particularly where the cost of any remediation works exceeds policy limits. It is not unusual for policies to contain differing subrogation provisions (either favouring the insured or insurer). Insureds should consider the subrogation clause’s terms at the settlement of  the underlying claim if third-party recovery actions are envisaged.In a similar vein, the decision in URS also confirmed that developers may bring contribution claims against third parties under the Civil Liability (Contribution Act) 1978 even where no other party is liable and no other claim is brought against the developer. Again, this widens the scope of the supply chain’s exposure to developer claims.Longtail liabilitiesAs to what this means in practice, construction supply chain professionals now face similar longtail exposures, with limitation periods of up to 30 years under the DPA. Those businesses should also bear in mind that a developer may opt to conduct remediation works on a building unilaterally, and then later launch a recovery action against the  third-party contractors.Is it (finally) time for coverage to crystallise?While the industry has been seeking to establish who carries potential liabilities for fire safety remediation costs, many construction insureds who have notified large fire safety exposures have received sweeping general reservations of rights from their insurers, pending claims or developments.Now that the right for developers to pursue thirdparty contractor claims has been made clear in URS, coverage stances must crystallise. We are beginning to see an influx of coverage disputes as a result. • Notification disputes: potential liabilities where claims are not advanced until sometime later will almost always give rise to insurers considering the notification provisions of the policy and any prior awareness. Many policyholders will have already reviewed their involvement in legacy projects and considered their exposure, but it  is important that supply chain businesses now also do so.• Legal liability: whether the remediation costs arose as a result of a legal liability or were incurred “voluntarily” is also a point which may give rise to coverage disputes. The judgment in URS provides some helpful analysis for what costs can be considered “truly voluntary” where there is no realistic alternative but for the insured to carry out remedial works. In light of the Supreme Court’s judgment, it may also now be easier for policyholders to trigger cover under a policy, given insurers will need to take into consideration the requirement to incur costs on a ‘voluntary’ basis to achieve building safety. Policyholders should give regard to whether their policy wording provides cover for costs incurred in relation to “compulsory remediation” or costs in relation to “voluntary remediation” and the distinction between both.• Policy exclusions: the scope and application of any policy exclusions (for example, workmanship exclusions) will continue to be a key battleground when seeking to agree the amount of the indemnity due under the policy.The judgment in URS provides some helpful analysis for what costs can be considered ‘truly voluntary’ where there is no realistic alternative but for the insured to carry out remedial works. Policy exclusions pose a further coverage issue. The scope and application of any policy exclusions, such as workmanship exclusions, will continue to be a key battleground when seeking to agree the amount of indemnity due under  the policy.Importantly, the decision confirms a duty can be owed to a developer as the first owner of the building and therefore consultants and designers may owe duties ‘up the chain’ thereby extending the risks for policyholders. This may lead to an increase in contribution claims and policyholders should be prudent in checking whether their policies provide cover for contribution claims.An insurer has a right to bring a claim in an insured’s name to recover a loss it has paid under the policy once the insured has been indemnified. For parties able to pursue recovery actions against the construction supply chain, the operation of the policy’s subrogation clause will be highly relevant, particularly where the cost of any remediation works exceeds policy limits.It is not unusual for policies to contain differing subrogation provisions, favouring either the insured or insurer. Insureds should consider the subrogation clause’s terms at the settlement of  the underlying claim if third-party recovery actions are envisaged.ConstructionRemediation Orders  The Chocolate Box12Construction13Empire Square(section 123)The Policyholder Review 2026On 5 June 2025, the FTT provided its decision for Section 123 of the BSA provides the First-tier Tribunal (FTT) with the power and discretion to issue a Remediation Order (RO) against landlords requiring them to remediate defective buildings  and/or take specified relevant steps in relation  to a defect.Following the introduction of the BSA, the first RO was granted in 2022 in Kedai6. This case provided some helpful insights into how the FTT would assess whether there was a “relevant defect” to be remediated (as defined by section 120 of the BSA). The test to be applied here is whether the relevant defect caused a “building safety risk”7, applying industry knowledge at the date of the hearing. We first considered the scope of ROs in our 2025 edition of The Policyholder Review, which included an analysis of the state of play following the decisions in Grey GR Limited Partnership8 and Di Bari9. Since then, we have seen further new law on the scope and application of ROs, which provides additional clarity for businesses subject to BSA orders.6  Waite & others v Kedai Limited LON/00AY/HYI/2022/0005 & 00167  A “Building Safety Risk” as defined by BSA section 120(5): “a risk to the safety if people in or about the building arising from - (a) the spread of fire,     or (b) the collapse of the building or any part of it”. 8  CAM/26UH/HYI/2022/00049  Di Bari and others v Avon Ground Rents Ltd LOM/00AP/HYI/2022/001710  Secretary of State for Levelling Up, Homes and Communities v Grey GR Limited Partnership CHI/00HN/HYI/2023/0008:     The Chocolate Box, Bournemoutha RO sought by leaseholders against the landlord of Empire Square11, as developed by Berkley Homes. In addition to the RO sought by the leaseholders, the landlord also sought a Remediation Contribution Order (RCO) against Berkley Homes. In 2023, the Secretary of State made an application for an RO against Grey GR Limited Partnership in relation to a building in Bournemouth known as The Chocolate Box10, a development of 59 residential properties, over 12 storeys. The decision provides a helpful framework of the core threshold requirements under section 123, relevant to the granting of a RO, including that: it must be a “relevant building (section 117(2)); the respondent must be a “relevant landlord or management company” (section 120(5)); and there must be “relevant defects” that cause a building safety risk (section 120(2)). Importantly, even if each of those thresholds are met, The Chocolate Box confirms that the tribunal retains full discretion, and it is not compelled to  make a RO. Matters have however moved on again since The Chocolate Box, with Empire Square (considered over) providing further guidance on the test for making a RO. The test is not “fair and just” as The Chocolate Box suggested, but rather the FTT has a broader, unfettered, discretion, so long as the decision achieves remediation and is within the  range of reasonable decisions.The case is a notable one, as it is the first time the FTT considered whether to make a RO in circumstances where the developer, Berkley Homes, was positively asserting that it would remediate the building. In 2022, Berkley Homes had also signed up to the Developer Pledge (a government initiative which required developers  to commit to remediate life critical fire safety defects in buildings over 11 metres), although by  the time of the hearing in April 2025 works had  not commenced. The FTT granted the RO against the landlord and ordered a RCO against Berkley Homes (albeit both were suspended, on the grounds that this the best way to achieve remediation in the shortest possible time). In relation to the RO:• There is now a shift from a “fair and just” test to a “purposive approach” - which the FTT explained as a solution focussed, rather than blame focussed, approach. • The FTT considered that in line with the principal focus of the BSA, non-fault purposive approach to remediating buildings as soon as reasonably possible should be adopted. • The purpose of a RO is to achieve practical remediation of life-threatening safety defects for the safety of leaseholders (not simply redress for non-compliance) and the FTTs assessment of what the best answer is here is unfettered. • The FTTs decision must simply be “within a range of reasonable decisions” and its decision is not open to challenge “unless no reasonable decision maker, on the facts known to it, could have come to the same decision”.11  Robert Zampetti & Others v Fairhold Athena Limited LON/00BE/HYI/2023/0013.ConstructionImportantly, the FTT also confirmed that the landlord’s (incurred and continuing) costs in relation to the RO could be recovered from the developer under an RCO, including its legal costs and the costs of expert reports. Additionally, as was the case here, a RO and RCO could be made on suspended terms, to provide the developer with an opportunity to get on with the remediation of the building, failing which the landlord must do so under the RO, with the costs of such action to be recovered from the developer under the RCO. Either way, the FTT’s stance was that the developer was the appropriate body, who was going to pay. 2 HillsideMore recently, on 16 September 2025, the FTT handed down another important decision on the interpretation of ROs, in 2 Hillside, where an application for a RO had been brought by leaseholders against the landlord12. The decision provides yet further clarity on the scope and application of ROs in relation to “relevant defects”. Under section 123(2) of the BSA the FTT has now confirmed that, whilst it has the power to specify  the “relevant defects” to be remedied, it cannot dictate how those defects should be remedied and “how the landlord goes about remediation must be  a matter for it”. Additionally, the remediation works are not “relevant steps” under the BSA. Instead, for the purposes of section 140(4A), “relevant steps” (being the actions necessary to address a “relevant defect”) are the mitigation steps, whilst remedial works are being carried out. That is a point which is also made clear in The Leaseholder and Freeholder Reform Act 2024 (LFRA 2024) which inserted the definition of relevant steps into the BSA from 31 October 2024. The LFRA 2024 now confirms that, in law, relevant steps (i.e. interim or temporary measures such as fire sprinklers, waking watches and temporary accommodation) fall within a relevant landlord’s responsibility - although a developer or previous landlord can be required to contribute to the costs of remedying or, where applicable, taking such mitigating steps in relation to relevant defects (with such costs recoverable, retrospectively and prospectively, under RCOs).AnalysisAny landlord seeking to argue against a RO on grounds that it is unfair, will face an uphill battle. Against a mantra of unfettered discretion focused on achieving remediation as quickly as possible, it is clearly going to be very difficult for any landlord to establish that no reasonable decision maker, on  the facts known to it, would have come to the  same decision.As we have highlighted previously, an approach that focuses on achieving remediation, rather than assessing whether there is legal culpability challenges well-established legal principles. An outcome-based remedy means that potentially, a policyholder may be liable even if it acted responsibly, which may give rise to coverage disputes around how such remedies fit within the realms of indemnity insurance. As to resultant claims against developers, we expect that as was the case in Empire Square, developers will want to take the opportunity to control and undertake the remediation works in place of the landlord as, in our experience, costs can otherwise spiral significantly, with disputes arising over the reasonableness and scope of the remediation works later down the line. This point increases in significance now that it is confirmed under the LFRA 2024 that it is the landlords’ responsibility to undertake the “relevant steps”, with such costs recoverable, retrospectively and prospectively, from developers under RCOs. Again, the costs of waking watches, temporary accommodation and expert reports prior to the completion of remedial works can potentially, be very significant - and any delays in carrying out remedial works will only cause such costs  to increase. Against a background of increasing liability, developers will no doubt wish to take control and push their insurers to indemnify the relevant steps, and the remedial works to be conducted, as soon  as possible - and action should be taken to crystallise and resolve any ongoing coverage  dispute causing a delay. While we had hoped that we would see more proactive engagement by insurers to seek to resolve coverage issues earlier, under the threat of ROs, so that the insurance funds needed to carry out necessary remediation works are received without delay, our team are instead witnessing an increase in building safety coverage disputes, as the underlying claims move forward or crystallise. Pursuant to section 13A of the Insurance Act 2015, it is an implied term of every insurance contract that the insurer must pay any sums due in respect of the claim within a reasonable time. If, as a result of any delay in payment, policyholders are facing ROs they might not otherwise have been subject to, section 13A claims for losses may follow against insurers as a result. Such losses might include: costs incurred in responding to an application for an RO; and any additional remediation costs that arise when measuring the costs of the remedial works ordered under a RO (assessed by reference to the building regulations in force at the time of the application hearing, rather than the regulations in place at the time of the works), against losses that might flow from claims in contract, tort or under the DPA.12  LON/00AE/BSA/2024/0503Remediation Contribution Orders (section 124)In addition to ROs, section 124 of the BSA makes provision for Remediation Contribution Orders (“RCOs”), pursuant to which the FTT may, on the application of an interested person, make an order that requires a “specified body corporate or partnership” to contribute towards the costs of remedying relevant defects if they are an “associated person”. This effectively pierces the corporate veil. Triathlon HomesOn 19 January 2024, the FTT handed down its first RCO in the case of Triathlon13. The RCO application concerned five residential building blocks in the former Olympic Village in Stratford, London. Triathlon, who owned the long leaseholds, sought RCOs under section 124 against: the original developer Stratford Village Development Partnership (“SVDP”); SVDP’s parent company (“Get Living Plc”); and East Village Management Ltd (“EVML”), a company established by agreement between SVDP and Triathlon, which was contractually responsible for remedying defects in the blocks. EVML had initially funded the remediation works through service charges levied on the leaseholders. The RCOs were sought to require SVDP and Get Living Plc to pay for Triathlon’s share of the remediation works, and to seek reimbursement  of historic costs incurred before the BSA came  into force. The RCOs ordered by the FTT were subject to appeal.On 8 July 2025, the Court of Appeal handed down judgment14 on whether the FTT erred in determining that it was “just and equitable” to make the RCOs; and if RCOs could apply retrospectively and for costs incurred before the BSA was implemented. 13  Triathlon Homes LLP v Stratford Village Development Partnership, LON/00BB/HYI/2022/0018-2214  [2025] EWCA Civ 846The Policyholder Review 202614 15ConstructionConstructionEqually, rather than a composite policy, the 16Construction17The Court of Appeal unanimously dismissed the appeal and upheld the FTT’s decision to grant RCOs against SVDP and Get Living Plc. • Just and Equitable: On Ground one, the court confirmed that the FTT decision was not flawed. It was the underlying policy of the BSA for developers and well-capitalised owners to be held primarily responsible for remediation costs, rather than the public purse; and RCOs are independent and largely non-fault-based remedies which are not contingent on the existence of other claims, such as contractual claims or service charge, or other avenues  of redress. • Retrospectivity: On Ground 2, the court similarly agreed with the FTT view that section 124 was intended to have retrospective interpretation, referencing the Supreme Court’s decision in URS v BDW, as to the retrospective effect of limitation periods under section 135 of the BSA. This will be particularly relevant, for leaseholders who were previously required to pay remediation costs, by way of service charges, prior to the enactment of the BSA. In reliance upon Triathlon, leaseholder can now seek to recover those losses on the basis that they are just and equitable (meaning that developers and their group companies may see claims originating out of already remediated buildings, where the works were paid for out of service charges prior to the BSA coming into force on 28 June 2022). A similar stance was reached by the Court of Appeal in Adriatic Land15, albeit subject to appeal.SDVP and Get Living Plc have successfully obtained permission to appeal Ground 2 (retrospectivity) to the Supreme Court, which will be heard by the same panel considering the appeal in Adriatic Land.  The decisions are significant for construction professionals in the context of legacy projects and are a reminder that even where there has been a change in beneficial owner of the developer, as was the case in Triathlon, it will not prevent the court from granting an RCO, as the starting position will almost always be whether it is just and equitable for the developer to pay the remediation costs. Additionally, an RCO’s ability to pierce the corporate veil remains a potentially significant issue. Any entity facing an RCO as an “associated” person should consider their policy wording carefully and, if needed, take coverage advice. Subject to the terms of each policy, coverage disputes might arise if the “associated” entity was not a party to the underlying contract(s) or involved in the developer and associated entity could feasibly be insured under separate policies with separate insurers and differing terms, which may further complicate the issue. The polluter pays principleAlongside Triathlon, further guidance and clarity on the application of RCOs was also provided by the FTT in Empire Square, which we have discussed. Whilst the original developer in that case, Berkley Homes, had confirmed that it would carry out the remediation works, that did not prevent the FTT from ordering a RCO. The case authorities continue to demonstrate a ‘polluter pays principle’, which would follow the government’s legislative goal under the BSA to ensure that those who conducted the development, pay for the remedial works and the costs arising out of remedial orders where it is “just and equitable” to do so. The FTT decision in Empire Square that legal costs incurred in obtaining the RCO would be recoverable from Berkley Homes under section 124(2) is a further illustration of this, and developers remain the  focus point.As we discussed in last year’s The Policyholder Review 2025, it appears that boundaries are rapidly blurring between what appeared to have been the original aim of ROs and RCOs - being an alternative and more efficient tool to resolve disputes - and the characteristics of traditional litigation. Overall, the FTT has been granted the power to provide remedies that are far broader than would ordinarily be the case in litigated construction disputes proceeding in the TCC so that applicants can avoid the cost and complexities ordinarily associated with such litigation. The lines here are now blurring even further, and whilst the FTT may be focused on achieving remediation quickly, that does not mean expensive and lengthy litigation ramifications will not be felt by parties in knock-on coverage disputes, or later TCC claims flowing from RCOs. In the meantime, the burden of pursuing such TCC litigation to recover the costs from the ultimate responsible party is evidently being placed on developers (and their insurers). Given the quantum of building safety claims is often considerable (and typically complicated by insured and non-insured losses), it would be sensible for developers to revisit the subrogation rights and payment waterfall provisions in any relevant insurance policies, to better assess the likely recoveries that might flow from potential third party claims, and who receives the rewards of any third party claim first. The Policyholder Review 2026Constructiondevelopment at the material point in time.  15  Adriatic Land 5 Limited v Leaseholders of Hippersley Point [2025] EWCA Civ 856Building Liability Orders  18Construction19(section 130-132)In a similar vein to RCOs, another groundbreaking reform introduced by the BSA was the power now provided to the High Court to issue a Building Liability Order (“BLO”), which will make another specified body corporate jointly and severally liable for relevant liability. In considering whether to grant a BLO, the court will have regard to the facts in each case and  what is just and equitable in the circumstances. Different to RCOs, BLOs are secondary remedies and will only be granted where primary liability  has been established. However, BLOs are another enforcement mechanism available to the court to pierce the corporate veil and the challenges posed by special purpose vehicles (SPVs), in extending liability to associates of the original developer or landlord liable under the DPA, section 38 of the Building Act 1984 or as a result of some other widely defined “building safety risk”. This past year has been relatively quiet for BLOs  and there remains a limited number of precedents  on the application of this secondary remedy (or additional enforcement option) since the introduction of the BSA. The first ever BLOThe first BLO under section 130 of the BSA was granted in 381 Southwark Park Road16. The first defendant, Click St Andrews, was an special purpose vehicle (SPV), which had entered into a freehold purchase agreement (“FPA”) with the leaseholders and the right to manage company which required it to carry out some works. The court determined that Click St Andrews breached its obligations under the FPA and the question was whether its “relevant liability”17, could be extended to its parent, Click Group Holdings Ltd, as an “associated body corporate”18. Upon establishing liability, the court held a consequential hearing in December 2024 and determined it was just and equitable to make the BLO given the SPV could not meet the financial liability and the associated company need not be named in the original proceedings for a BLO to be made (although it would be sensible for them to be joined for effective case management). The case acts as a reminder to developers and the like that forming an “empty shell” of a SPV does not always provide upscale protection. The message following the BSA is that the court will not be reluctant to source alternative funds where SPVs are insolvent. As with RCOs, the court will interpret BLOs narrowly and only in circumstances whereby a “relevant liability” (i.e. circumstances that give rise to a building safety risk being either fire or structurally related) has been established. BDW v Ardmore19 also provided some commentary on when a BLO could be issued, suggesting that applicants could seek a BLO even before the relevant liability of the original entity has been established. Again, this represents another potential shift in the court’s attitude and approach to company liability - although the court equally acknowledged in that case that applications for information in connection with a BLO (under section 132) “ought… to be short and uncomplicated” and should not “impose on the court any obligation to become embroiled in assessments of the merits of disputed matters”, which might mean “that applications for information orders will be made sparingly in cases where liability is in issue”.Policyholders should take care to ensure that there is clear visibility over group structuring before setting up SPVs, as associated and parent companies may face greater. Similar care should be taken in relation to the group’s insurance arrangements. Policy terms should be reviewed closely and in particular; consideration should be given to which companies within a group structure fall within the definition of the ‘insured’. Providing detailed information to insurers on group company structures during the proposal process would be sensible, and may reduce potential coverage disputes down the line.The Policyholder Review 202616  381 Southwark Park Road RTM Company Ltd & Ors v Click St Andrews Ltd (in Liquidation) & Anor [2024] EWHC 3179 (TCC)17  Under section 130(3)(b) of the BSA.18  Under section 131 of the BSA, it was argued that Click Group Holdings Ltd was an “associated body corporate”.19  BDW Trading Ltd v Ardmore Construction Ltd & Ors [2025] EWHC 434 (TCC)20  [2024] EWCA Civ 156721  UKSC/2025/0026vvzvConstructionDamage and aggregation clarity in Construction All Risks insurance In December 2024, the Court of Appeal handed down its judgment in Sky UK Limited v Riverstone Managing Agency20. The case concerned damage to the roof of Sky’s global headquarters in London during its construction. The roof, which is the largest flat timber roof in Europe, made up of 472 individual wooden cassettes, suffered extensive water ingress during its construction. Water entered the roof space because the contractor, Mace, had failed to provide protective measures by way of a temporary roof during a period of rainfall. Despite various drying-out attempts, by the time practical completion was achieved on 4 April 2016, the issue had not been rectified. Remedial works are ongoing and expected to complete in 2029.The policy coverage case concerns the application of key insurance law principles. Sky and Mace were both co-insureds under a ‘construction all risks’ policy, which covered the period of construction, plus a one year “maintenance period”. Both parties sought an indemnity from Insurers under the Construction All Risks (CAR) policy for damage that occurred during the period of insurance, damage that developed thereafter, and the costs of investigating the extent of the damage that had occurred to date. The CAR insurers contended that Sky and Mace were not entitled to any cover for “damage” that occurred after the Period of Insurance, nor for the costs of investigating the extent of the “damage”. It was also disputed whether multiple deductibles applied.The Court of Appeal found in favour of Sky and Mace on several key principles and the whilst the CAR insurers sought permission to appeal, that was refused by the Supreme Court21.The Period of Insurance and developing damage20Construction21The Policyholder Review 2026The meaning of physical ‘damage’The insuring clause required insurers to indemnify Sky and Mace against “physical loss or damage to Property Insured, occurring during the Period of Insurance, from any cause whatsoever”. Whilst insurers sought to argue that damage occurring after the Period of Insurance was not covered, the Court of Appeal found in favour of Sky and Mace on the following principles:• In a contract of insurance against damage to a property, an insurer promises to an insured, by way of a warranty, that the damage will not occur. Once the damage has occurred, the insurer is in breach of its primary obligation. The insurer’s secondary obligation is to pay damages for breach of its primary obligation.• Therefore, the measure of recovery in a property insurance claim is governed by  common law principles, i.e. to put the innocent party in the same position as if the breach  had not occurred.• The measure of recovery will be subject to express terms in the insurance policy, such as deductibles, limits and exclusions.• Such modifications and limitations must be achieved by clear wording. The temporal limit in the Insuring Clause (occurring during the Period of Insurance) did not provide the clear wording required to modify the common law principles. It does not purport to define or confine the loss for which the insurer is liable. If the insured damage has caused further damage, then subject to the usual principles of mitigation and remoteness, the insurer is liable for the loss resultant upon suffering that further damage. Put simply, the costs of remedying the foreseeable deterioration and development damage that occurred after the Period of Insurance, as a result of the insured damage that occurred during the Period of Insurance, were recoverable under the CAR policy. A point Lord Justice Popplewell found was consistent with authorities reaching back to 1850, and with commercial sense.It was the insurers’ position that, in order to be “damaged” within the meaning of the CAR policy, the timbers would have had to reach a condition requiring “immediate replacement or repair”, as anything short of that would not constitute damage. Insurers’ case here was that wetting, which could be cured by drying out, was not damage.Again, the Court of Appeal rejected the insurers’ position, finding instead that damage constituted any change to the physical nature of tangible property that impaired its value or usefulness,  even if the damage can be remedied.The application of deductibles It was disputed between the parties whether a deductible of £150,000 for “any one event” applied once to the whole of the claim, or separately in respect of damage to each cassette - in which  case the cover available would be minimal or  non-existent. Finding in favour of the policyholders, the Court of Appeal agreed that the “event” was the cause of the damage, and not the damage suffered to each individual cassette. The decision not to have a temporary roof was a single event. Therefore, a single deductible was applicable.The recoverability of investigation costsAn issue arose as to whether as to whether investigation costs fell within the policy’s Settlement Clause, which required insurers to “indemnify the Insured on the basis of the full cost of repairing, reinstating or replacing property lost or damaged…”. The Court of Appeal favourably determined that the costs of investigating what is reasonably necessary to remedy insured damage, and deterioration and development damage, are self-evidently part of “the full cost of repairing or reinstating” insured damage within the meaning of the Settlement Clause. Investigation costs are therefore recoverable, if they are reasonably incurred, even if no damage is discovered.ConstructionWhat is the impact of Sky & Mace v Riverstone for policyholders?The decision is a significant win for policyholders of time-relate occurrence policies. • Damage to a property is interpreted widely and includes any change to the physical nature of tangible property that impairs its value or usefulness, even if it is capable of remedy.• Damage occurring after a period of insurance that can be shown to have developed from  the damage occurring during the period of insurance can, in the absence of any intervening cause, be recoverable under the policy subject  to its term. Policyholders (and insurers) in existing disputes should reconsider their positions in light of this. However, if the policy is clearly worded to exclude cover, the courts will be reluctant to step away from that position. This emphasises the importance of closely considering policy wording.• Reasonable investigation costs incurred in investigating the cause and extent of damage should be recoverable.• Aggregation clauses that refer to “any one event” relate to the event causing the damage.