Developer’s judicial review challenge rejected by High Court
9 September 2025
Guest Contributor Alice Grant
Introduction
In Rydon Group Holdings Ltd v Secretary of State for Levelling Up, Housing and Communities [2025] EWHC 2182 (Admin), the High Court dismissed a judicial review challenge brought by Rydon, a developer criticised in the Grenfell Tower Inquiry Phase 2 Report. The Court held that the government’s decisions, principally the designation of the Claimant as ‘unfit’ to carry out remediation works, were contractual in nature. As such, they were governed by private law and not amenable to judicial review, save under allegations of fraud, corruption, or bad faith. Rydon remains excluded from carrying out the remediation works and is liable to reimburse costs through the Building Safety Fund (BSF).
Factual Background
In the wake of the Grenfell Tower fire, the government established the BSF to finance remediation of unsafe cladding and a contractual framework for developers, the Self-Remediation Terms (SRTs). Developers were required to sign the SRTs in order to join the Responsible Actors Scheme (RAS), thereby avoiding statutory restrictions imposed under the Building Safety Act 2022 (BSA 2022) and the Building Safety (Responsible Actors Scheme and Prohibitions) Regulations 2023 (RAS Regulations 2023).
By August 2023, three high-rise blocks developed by Rydon, known as the Cable Street Buildings, had reached the funding approval stage under the BSF. In September 2023, Rydon signed the SRTs and joined the Responsible Actors Scheme (RAS). Rydon requested that the Cable Street Buildings be withdrawn from the BSF so that it could undertake the remediation itself. On 28 February 2024, however, the Secretary of State designated Rydon as a ‘Designated Participant Developer’ under the SRTs, thereby deeming it ‘unfit’ to carry out the remediation works.
Rydon Maintenance, a subsidiary of the Claimant, had been the principal contractor of the Grenfell Tower refurbishment. In the Grenfell Inquiry Phase 2 Report, Rydon was considered to have had “considerable responsibility for the fire” through “inadequate thought to fire safety” and poor oversight of subcontractors (at [4]).
The Court’s Reasoning
The judicial review concerned three decisions of the Secretary of State: (i) designating Rydon as unfit to undertake remediation; (ii) directing that remediation proceed within the BSF pursuant to Clause 7.7(B) of the SRTs; and (iii) requiring the Cable Street Buildings to remain within the BSF pursuant to Clause 13.2 of the SRTs. The central question before the Court concerned whether the impugned decisions of the Secretary of State were amenable to judicial review on any or all grounds pleaded by the Claimant.
Grounds Pleaded by the Claimant
The Claimant advanced multiple grounds: (i) breach of natural justice by procedural unfairness, (ii) breach of the Tameside duty of inquiry, (iii) failure to take into account material considerations, (iv) predetermination, (v) improper motive, and (vi) Wednesbury irrationality (at [58]). The Court dismissed all grounds. It held that there was no breach of natural justice, since Rydon was already aware of the concerns raised by residents and had the opportunity to respond ([83]–[84]). On Tameside duty, Choudhury J held that there was no failure to undertake sufficient inquiry ([93]–[102]). No obviously material considerations were overlooked, thus the third ground failed (at [112]). The allegations of predetermination and improper purpose were rejected for want of evidence ([114]–[123]). Finally, the claim of irrationality could not succeed: the decision was reasonably based not only on technical competence but also on questions of trust in light of the Grenfell Inquiry findings ([124]–[128]).
Amenability to Judicial Review
The determinative issue concerned whether the decisions under challenge were justiciable in public law. The Claimant contended that the SRTs, though a contract, were in substance a regulatory instrument under the BSA 2022 and the RAS Regulations 2023. On this basis, the full range of judicial review grounds should apply. The Defendant contended that the decisions were contractual in nature, and that judicial review was limited to allegations defined in Mercury Energy and Mauritius v CT Power: fraud, corruption, or bad faith. Choudhury J upheld the contractual nature of the SRTs: “that a contract has a statutory background or is entered into against a backdrop of strong ministerial encouragement does not transform contractual obligations into public law duties,” (at [68]).
Comment
Contract or Public Law?
Rydon argued that the SRTs were not entered into voluntarily, in the typical manner of a commercial contract. Developers who refused to sign risked being placed on the ‘Prohibitions List’ under the RAS, excluding them from large-scale development altogether (at [71]–[73]). According to the Claimant, the agreement constituted “a means of enforcing statutory objectives in the public interest.”
Whilst the Court acknowledged that the negotiations “may have been somewhat lop-sided” (at [72]), it rejected the submission that this rendered the decisions justiciable under public law. Choudhury J emphasised the decisions were taken “in the exercise of contractual powers”, pursuant to the terms of the Self Remediation Contract. Moreover, the existence of regulatory or political pressure to sign the contract, in the form of ‘severe’ consequences if not signed, did not alter the fundamental nature of the agreement. Further, there was nothing unlawful about the process of negotiation, in which Rydon chose not to participate (at [73]–[75]).
Rydon reaffirms the government’s entitlement to rely on public interest considerations when negotiating and enforcing commercial contracts. The Court’s reasoning is consistent with the broader line of authority, reflected in Lord Sales’ analysis in State of Mauritius v CT Power Ltd [2019] UKPC 27 (at [63]–[66]). In Hampshire County Council v Supportways Community Services Ltd [2006] EWCA Civ 1035, Lord Neuberger observed that where a contractual obligation between a public body and a private entity is framed by reference to a statutory duty, it does not “render that obligation a public law duty,” (at [36]). For public law remedies to be made available, Choudhry J held: “more would be required in the form of “at the very least, a relevant and sufficient nexus” between the contractual obligation in question and a relevant public law power.” Looking forward, the scope of what constitutes a ‘relevant and sufficient nexus’ remains a question of law to be further clarified.
Post-Grenfell considerations
The Court held that the term ‘unfit’, properly understood, was not confined to technical competence: it extended to questions of trust, confidence and wider public interest. Even though Rydon had competently remediated other works, and indeed, the third party commissioned by the Secretary of State supported Rydon’s remediation plan, the Inquiry findings had eroded trust in the developer (at [108]). Choudhury J emphasised that such findings were an important consideration in determining whether residents and the wider public could have confidence in Rydon undertaking remediation ([107]–[109], [124]–[128]). Accordingly, the Court upheld the government’s decision that the Claimant was ‘unfit’ to carry out remediation in respect of the Cable Street Buildings.
