Mulalley refurbished five 1960s concrete tower blocks in Gosport between 2006 and 2008 for Kelsey Housing Association using an expanded polystyrene (EPS) external wall insulation (EWI) cladding system.
It was only after the Grenfell Tower fire in 2017 that alarm bells rang over the use of such systems. By this time, the Gosport towers were owned by Martlet Homes Ltd (part of the Hyde Group), which sought £8m in damages from Mulalley. (Only four of the towers were subject to litigation as the fifth was too long ago to sue over.)
Despite Mulalley’s denial of liability, His Honour Judge Stephen Davies at the Technology & Construction Court yesterday handed down his judgment in favour of the claimant, Martlet Homes.
The judge also awarded Martlet damages for the substantial costs of the waking watch service that it had been obliged to implement as a temporary mitigation measure for the risks posed by the cladding pending its removal.
In total, Hyde was awarded £10.8m in damages and costs.
Mulalley contended that the products and designs it employed were all properly certified and authorised at the time. Among the potentially significant lines within judgement is the judge’s determination that “BBA (British Board of Agrément) certificates cannot be said to amount to a form of ‘guarantee’ or ‘passport’ to compliance with the Building Regulations”.
Law firm Norton Rose Fulbright, representing Martlet, described the judgment as “hugely significant“ given that it is the first High Court judgment on a claim concerning fire safety defects in cladding on a high rise building since the Grenfell Tower fire.
This is a significant win not only for the Hyde Group but for many UK building owners facing similar cladding issues, the law firm said, and for the construction industry as a whole, because it offers much needed guidance on the court’s approach to numerous significant issues affecting the hundreds of cladding disputes ongoing in the UK today.
Hyde Group chief executive Andy Hulme said: “This is a victory for all homeowners and justice for all those caught up in the cladding scandal, following the fire at Grenfell where 72 people tragically lost their lives. It sends a strong message to any others whose work is defective, that they cannot hide and must come forward to ensure homes are safe for people across the UK.”
Simon Ramsden, partner at Norton Rose Fulbright, said: “We’re extremely proud of the role our team played in delivering this outcome on behalf of the Hyde Group, which we hope will promote the resolution of the many cladding related disputes thanks to the court’s guidance delivered today.”
Others also recognise the case to be significant. Mary-Anne Bowring, managing director of property consultant Ringley, said: "The ruling is a landmark that gives hope to millions of residents living in unsafe buildings by opening the potential for legal action against other construction contractors who installed unsafe cladding.
"Leaseholders can now rest assured that Hyde acted properly not only in the first instance by not charging them and that there will be no later cost in the service charge thanks to the recovery via the High Court.
"The ruling is also good news for housing associations that shouldered the financial burden of remediating unsafe buildings, which has eaten into their capacity to deliver much needed affordable homes.
"However, it is not enough to simply expect developers and housing associations to launch further legal action off the back of today's judgement in order to recover the money spent on fixing unsafe buildings. It is time for the government to step up and use its immense sources to improve the fire safety of tall buildings, recuperating the costs for those responsible for dodgy construction work afterwards.
"Given the cost-of-living crisis driven primarily by spiralling energy costs, cladding remediation can be dovetailed with a mass state-funded retrofitting programme, helping achieve two key policy goals – achieving net zero and guaranteeing the safety of residents – in one go."
The full judgment can be found at: Martlet Homes Ltd v Mulalley & Co Ltd [2022] EWHC 1813 (TCC)
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