Cladding Remediation Case Law Adriatic Land

Cladding Remediation Case Law took a major step forward when the Court of Appeal handed down its decision in Adriatic Land 5 Ltd v Long Leaseholders at Hippersley Point. The judgment answers a question affecting thousands of remediation projects: can a landlord recover legal and professional costs connected with cladding and wider building safety remediation from leaseholders through the service charge - especially when those costs were incurred around the time the Building Safety Act 2022 (BSA) came into force?

In clear terms, the Court of Appeal held that:

Legal and professional costs incurred in connection with a section 20ZA consultation dispensation application are within the scope of paragraph 9 of Schedule 8 to the BSA (i.e., they are the kind of costs the paragraph addresses).

Paragraph 9 does not apply retrospectively to costs incurred before 28 June 2022 (the BSA leaseholder-protection commencement).

Even if paragraph 9 were assumed to operate retrospectively, that would not breach the human rights protection of property (Article 1 of Protocol 1 of the European Convention on Human Rights).

Put simply: for qualifying leaseholders, landlords cannot recover post-28 June 2022 legal or professional costs relating to liability for relevant defects (including dispensation costs) via service charge; but pre-28 June 2022 costs remain potentially recoverable, subject to the usual lease and reasonableness tests. This is the central takeaway for anyone following Cladding Remediation Case Law Adriatic Land.

The building, the dispute, and how it reached the Court of Appeal

Hippersley Point is a mid-2010s residential-led building with more than five storeys. Fire safety defects emerged and the freeholder sought to progress urgent works. To avoid delay, the landlord applied for dispensation from the statutory consultation requirements under section 20 of the Landlord and Tenant Act 1985. The First-tier Tribunal granted dispensation because the building was unsafe, but later attached a costs condition preventing recovery of dispensation-application costs from leaseholders.

On appeal, the Upper Tribunal agreed the costs condition was not an appropriate use of the dispensation jurisdiction, yet still concluded that paragraph 9 of Schedule 8 to the BSA separately barred the recovery of those legal/professional costs from qualifying leaseholders. The landlord appealed again - this time to the Court of Appeal - raising three pointed issues that now define Cladding Remediation Case Law Adriatic Land.

The statutory framework that matters

Schedule 8: the Leaseholder Protections

Part 5 of the BSA contains the leaseholder protection regime, and Schedule 8 sets the rules on what may or may not be passed through service charges for “relevant defects” in “relevant buildings.” Among other provisions, the schedule:

Bars service charges for cladding remediation for qualifying leaseholders (paragraph 8).

Caps and limits certain non-cladding remediation costs (paragraphs 3–7).

And, crucially for Cladding Remediation Case Law Adriatic Land, paragraph 9 prevents landlords from charging leaseholders for “legal or other professional services” relating to the liability (or potential liability) of any person in connection with relevant defects.

The term “qualifying lease” captures long residential leases meeting the Act’s criteria, and “relevant building” generally captures multi-dwelling buildings at or above the statutory height thresholds. Paragraph 10 of Schedule 8 contains the mechanics: if a cost is in a category where “no service charge is payable,” it cannot be treated as a relevant cost and must be adjusted for in the accounts.

Other Routes to Recovery

The BSA is not merely a blocking regime. It also introduces tools to redirect cost liability towards those responsible or better placed to pay, including Remediation Contribution Orders, Building Liability Orders, extended limitation for defective premises claims, and specific product liability routes. These tools form the background to proportionality and public-interest arguments considered by the Court.

The three questions the Court of Appeal answered

Scope: Do dispensation-application costs fall within the phrase “legal or other professional services relating to the liability (or potential liability) of any person” in paragraph 9?

Retrospectivity: Does paragraph 9 apply to costs that were incurred before 28 June 2022?

A1P1 (Human Rights): If paragraph 9 were retrospective, would that unlawfully deprive landlords of property (accrued contractual rights) without compensation?

Each answer shapes the practical implication of the Cladding Remediation Case Law decision in Adriatic Land.

Issue 1 - Scope: dispensation costs are within paragraph 9

The landlord argued that paragraph 9 targets costs of pursuing third-party wrongdoers (developers, contractors, manufacturers), not costs of seeking dispensation from consultation. The Court of Appeal disagreed. The words “relating to the liability (or potential liability) of any person” are broad. They capture liability considerations for landlords as well as others, and they encompass the enabling legal steps needed to manage and carry out remediation, such as obtaining dispensation to accelerate safety works.

If the regime shields leaseholders from remediation costs, it would be anomalous to let associated legal and professional fees - incurred precisely to enable remediation - slip through the net. The Court therefore held that dispensation-application costs are indeed “legal or other professional services” relating to liability created by relevant defects.

Practical consequence: Treat advice, case preparation, expert input, and advocacy for dispensation or other remediation-linked applications as squarely within paragraph 9’s scope. In the language of Cladding Remediation Case Law Adriatic Land, they are not “ordinary management” or routine administration detached from defect liability; they are embedded in the liability landscape.

Issue 2 - Retrospectivity: paragraph 9 does not apply to costs incurred before 28 June 2022

This is the pivot of Cladding Remediation Case Law Adriatic Land. The Court applied the standard presumption against retrospectivity. Unless Parliament clearly states otherwise, legislation is read to avoid altering the legal consequences of past events or extinguishing accrued rights. Paragraph 9 is framed in the present tense (“no service charge is payable”) and contains no explicit language reaching back to undo pre-commencement entitlements.

The Court then addressed what it means for a cost to be “incurred.” It adopted the orthodox position: a cost is incurred when the liability to pay crystallises - typically when an invoice is issued or payment becomes due under a retainer or contract. Estimates or budgets are not “incurred costs” until liability to the professional arises.

The rule for timing:

Pre-28 June 2022 incurred legal/professional costs are outside paragraph 9’s prohibition and remain subject to the usual lease and reasonableness tests.

On/after 28 June 2022 incurred costs fall within paragraph 9 and cannot be passed to qualifying leaseholders through the service charge.

This timing rule is now a cornerstone of Cladding Remediation Case Law Adriatic Land. It requires landlords and managing agents to audit ledgers and supporting documents carefully to align each cost with the correct side of the commencement line.

Practical Examples:

A solicitor’s invoice dated 20 June 2022 for work done in May–June is a pre-commencement cost and, in principle, recoverable (subject to lease/LTA reasonableness).

A counsel fee note first issued on 5 July 2022 for a hearing listed in July is a post-commencement cost. Even if some preparatory work occurred earlier, the cost is generally treated as incurred when liability crystallises. Apportionment may be possible where the evidence clearly separates pre- and post-commencement work.

Issue 3 - A1P1: even if retrospective, paragraph 9 would still be compatible

The landlord advanced a human rights argument: if paragraph 9 operated retrospectively, it would strip landlords of accrued contractual rights to recover service charges - “possessions” protected by A1P1 - without compensation.

The Court approached this in two steps. First, it accepted that accrued contractual rights are capable of being “possessions.” Second, it asked whether a retrospective application of paragraph 9 would amount to a deprivation (which typically requires compensation) or a control of use (where proportionality is the touchstone and compensation may not be required).

It concluded that, even on a retrospective reading, paragraph 9 would be a control-of-use measure. The regime regulates how property rights - including service-charge rights - may be used in a defined social-economic context, rather than confiscating those rights outright. The broader BSA framework creates alternative avenues to allocate and recover costs (for example, via contribution or liability orders), undercutting the idea that landlords are left with no meaningful use of their rights.

On proportionality, the Court highlighted the exceptional public interest: the need to remediate unsafe buildings, protect leaseholders from crippling charges, and restore confidence in lending and insurance markets. Against that backdrop, and given Parliament’s wide discretion in socio-economic policy, the measure was proportionate. Therefore, human rights considerations did not require the Court to “read down” paragraph 9 to avoid retrospectivity.

This A1P1 analysis does not change the primary holding on ordinary construction (that paragraph 9 is prospective only), but it is a powerful reinforcement of the overall legal landscape in Cladding Remediation Case Law Adriatic Land.

Why Cladding Remediation Case Law Adriatic Land Matters

Landlords, managing agents, and freeholder groups

Run an “incurred date” audit. Review every legal and professional invoice linked to remediation, dispensation, expert investigations, and strategy. Pin each cost to an incurred date. Expect to apportion fees where a retainer straddles the commencement date and the evidence allows a fair split.

Do not levy post-commencement legal/professional costs on qualifying leaseholders under paragraph 9. Adjust service-charge accounts in line with paragraph 10 (credits, reductions, or repayments as needed).

Pursue alternative recovery routes for barred costs: consider Remediation Contribution Orders and other statutory mechanisms designed to redirect liability up the chain to developers, associated companies, or contributors.

Maintain a robust evidence trail for reasonableness on any pre-commencement recovery: keep time records, scopes of work, and justification for professional input. Reasonableness challenges are likely.

RMCs/RTMs and resident-led governance

Budget for paragraph 9 impacts. Where post-commencement legal/professional costs cannot be passed on to qualifying leaseholders, cash flow planning becomes essential.

Synchronise reserve accounting with paragraph 10. Costs in “no service charge” categories cannot be treated as relevant costs. Implement clear year-end adjustments and narrative explanations to reduce dispute risk.

Leaseholders and advisers

Challenge improper pass-throughs. If a demand includes post-commencement legal or professional fees relating to defect liability, cite paragraph 9 and request correction.

Scrutinise pre-commencement items. They may still be recoverable, but only if permitted by the lease and reasonable in amount and scope. Ask for breakdowns, dates, and evidence of necessity.

Remember other protections. Cladding remediation itself is a zero-charge category for qualifying leaseholders, independent of paragraph 9’s legal-costs rule. Caps and limitations may also apply to non-cladding categories.

Developers, funders, and insurers

Expect increased use of contribution tools. As paragraph 9 shuts the service-charge route for post-commencement legal/professional costs, landlords and managers are incentivised to seek contribution orders and related claims, often alongside settlements tied to delivery milestones.

Factor litigation exposure into programme planning. Early resolution can de-risk programmes and reduce holding costs caused by prolonged disputes.

FAQs - Cladding Remediation Case Law Adriatic Land

Does Cladding Remediation Case Law decision in Adriatic Land let landlords recover historic cladding works from qualifying leaseholders?
No. Cladding remediation costs for qualifying leaseholders are in a separate, absolute “no service charge” category. The case deals with legal/professional costs (paragraph 9), not the cladding works bar (paragraph 8).

We raised an on-account demand in early June 2022 based on a cost budget, but the solicitor invoiced on 5 July 2022. Is it recoverable?
The controlling factor is when the cost was incurred. Budgets and estimates don’t count. If the liability crystallised on 5 July 2022, it is generally a post-commencement cost and, for qualifying leaseholders, cannot be recovered via service charge under paragraph 9.

We paid counsel’s fee note on 15 June 2022 for a hearing listed in July. Can we recover that through service charge?
Yes, in principle, because the cost was incurred (and paid) pre-commencement. It remains subject to the lease and reasonableness requirements, but paragraph 9 does not retrospectively bar it.

If paragraph 9 barred some historic costs, could landlords rely on human rights to override it?
The Court indicated that even a retrospective operation would likely be treated as a proportionate control of use, not a deprivation requiring compensation. Human rights arguments are unlikely to disapply the statutory scheme in typical cases.

Resources :

Design Defect Liability Case BDW v URS

Cladding Remediation Case Law Almacantar v De Valk

Application Checklist

Catalogue all legal/professional costs connected with relevant defects: solicitors, counsel, experts, tribunal/court fees, and application fees (e.g., dispensation).

Date-stamp each cost with the incurred date; gather the underlying invoices and retainer terms.

Apportion fairly where a single instruction straddles the commencement date and there is evidence to support a split.

Isolate post-commencement legal/professional costs from service-charge schedules for qualifying leases.

Reconcile accounts under paragraph 10: do not treat barred costs as relevant costs; make credits/repayments/reductions as appropriate.

Model funding impacts and consider Remediation Contribution Orders and other statutory routes for recovery.

Communicate clearly with leaseholders and stakeholders: explain the timing rule, the difference between cladding works and legal/professional costs, and how adjustments will be made.

Document reasonableness for any pre-commencement recovery: narratives, time entries, scopes, and necessity.

Key Takeaways

Timing is everything. In Cladding Remediation Case Law Adriatic Land, paragraph 9 only bites on costs incurred on or after 28 June 2022. Pre-commencement legal/professional costs can still be recoverable, subject to lease and reasonableness.

Dispensation costs are captured. Seeking section 20ZA dispensation is part of the liability landscape; the associated legal/professional costs sit within paragraph 9.

Cladding works are separate. Zero-charge for qualifying leaseholders under paragraph 8 is untouched by this ruling.

Human rights won’t unwind the regime. Even on a hypothetical retrospective reading, paragraph 9 would likely survive A1P1 scrutiny as a proportionate control of use.

Audit and adjust. Align ledgers to the incurred-date rule; apportion where justified; implement paragraph 10 adjustments.

Use the BSA toolbox. Where paragraph 9 blocks pass-through, escalate with contribution and liability orders or negotiated settlements.

Expect scrutiny. Transparency on dates, scopes, necessity, and reasonableness will reduce dispute exposure and speed up programme delivery.

Conclusion

The cladding remediation case law decision in Adriatic Land provides a clear rule that unlocks many stalled conversations between landlords, leaseholders, and their advisers. Treat paragraph 9 as a prospective bar for qualifying leases, apply the incurred-date test rigorously, and separate cladding works (a distinct zero-charge category) from legal/professional services. Then build your recovery strategy around the BSA’s contribution and liability mechanisms.

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