Cladding in Court

Many significant developments regarding fire and building safety have occurred in recent years. The construction industry has kept busy trying to adhere to bills and legislative changes to avoid disputes. More guidance has landed now that the Courts have issued the long awaited first substantive judgment on fire safety in a post-Grenfell world.

In the early 1960s five high-rise towers were built in Hampshire to provide affordable housing. As a result of the Grenfell tragedy, Martlet Homes began to investigate the materials used in these high-rise properties which had been refurbished via a design and build contract between 2005 - 2008. Refurbishment works by the contractor, Mullaley & Co Limited, included retrofitting insulation to the external walls of the existing concrete properties. This incorporated expanded polystyrene insulation board which, it was alleged, meant that the cladding system failed to comply with the Building Regulations at the time of the contract. There were also installation defects in relation to the provision of fire barriers. Martlet sought £8m in damages from Mullaley. The damages included the cost of investigating and remedying, by removal and replacement, the insulation and the cost of associated interim measures. Whilst Mullaley accepted that there had been some defective installation, they maintained that the breaches did not cause Martlet any loss. Mullaley argued that underlying the dispute was the fact that the insulation would have needed to be replaced in a post-Grenfell world due to increased fire safety standards. Martlet denied this arguing that Mullaly was in breach of contract for not making it comply in any event.

The Court found in favour of Martlet.

As to the insulation issue, the Court found that the contract required strict compliance with laws (i.e. the Building Regulations 2000) and the Employer's Requirements stated that works were to be in accordance with industry codes of practice (i.e the BBA and BRE).

The Building Regulations 2000 stated "external walls adequately resist the spread of fire over the walls … having regards to the height, use and position of the building". The BRE recommended that combustible insulation (i.e. that containing polyester) should not be specified for high-rise residential buildings unless it meets performance standards and has been tested. As such, the Court found that Mullaley was in breach of contract in this respect.

As to the installation breach, experts found that the works did not comply with the relevant fire safety requirements and industry standards and the Court allowed Martlet to recover costs incurred to repair those defects.

It should be noted that the Court's decision turned on the case facts, in particular, industry standards and strict contractual provisions. As such, how this judgment will affect other contracts and other products remains yet to be seen. Nonetheless, this judgment will be met with great interest from any party involved in the construction industry. Parties currently negotiating contracts may wish to bear the Court's decision in mind when considering contractor's obligations going forward.