Developer to fight £48mn government fire safety bill on human rights grounds

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A property developer is gearing up to fight a landmark lawsuit over post-Grenfell building safety costs, arguing the UK government’s “retrospective” demand for £48mn to cover remedial works breaches human rights law.

The housing department is suing Urban Splash, co-founded by Manchester regeneration entrepreneur Tom Bloxham, in an important test of the government’s powers to recoup public money spent replacing cladding on buildings across the country.

Property lawyers said it was the biggest such case brought by the government set to proceed to a final hearing. Barring a last-minute settlement, the case is due to begin on Monday at a property tribunal in Manchester.

The dispute is part of the wider legal fallout from the devastating fire at Grenfell Tower in west London in 2017, which exposed construction flaws in properties across the UK.

The government in 2020 set up the taxpayer-backed Building Safety Fund, spending about £2bn to fix fire safety problems following the Grenfell disaster, which killed 72 people.

About £48mn was spent on seven Urban Splash developments in Manchester, including the Moho Building, the Chips Building and the Box Works. The total includes “waking watch” fire safety patrols, as well as building works.

The government is trying to recover the funds through legal proceedings initiated against Urban Splash in 2024 by former Conservative housing secretary Michael Gove. It is also pursuing two other developers for smaller sums.

Bloxham, who is credited with helping to revitalise Manchester city centre, donated £8,807 to the Labour Party in 2020, according to Electoral Commission records.

The Ministry of Housing, Communities and Local Government is seeking to use powers under the Building Safety Act 2022 to force the company to reimburse the public purse through a so-called Remediation Contribution Order (RCO).

Kerry Bretherton KC, representing the government, said in court documents that Urban Splash “could have chosen to do the right thing and remediate the buildings itself, as the government consistently called on the whole industry to do in the aftermath of Grenfell. It did not”.

Ten other entities named as respondents, which the government contends are associated with Urban Splash, are also defending the case.

Lawyers for the company said the government was seeking the “retrospective application of building standards” and pointed to the “historical failings of the government in relation to building safety regulation”.

Nicholas Dennys KC, for Urban Splash, said in court documents that this “offends the principle of legal certainty” and human rights law.

The seven buildings “came under intense professional scrutiny and were found to comply with the relevant construction product regulation, product testing standards, the relevant Building Regulations and associated guidance at the time”, he said.

Dennys also said the government had not just undertaken safety fixes during the works but “enhancement” to the buildings, including upgraded windows and balcony decking.

He warned that the government’s demand for payment would cause company financial difficulties, triggering job losses and threatening construction of new homes.

But Bretherton, for the government, said the main responsibility for funding fire safety remediation lay with the developer. “Those connected to the building should pay rather than the taxpayer,” she said.

Bretherton also said the works were undertaken following expert advice.

The case is of wider significance for the property sector. Amanda Gourlay, barrister at Magdalen Chambers, said that while the tribunal case would not set a formal legal precedent, the tribunal’s “reasoning will be closely scrutinised and given the amount of money at stake, an appeal from the unsuccessful party would not be surprising”.