Out-Law News 4 min. read

Fire safety ruling has implications for cladding disputes

Construction companies contracted to design and build cladding systems for buildings may have to pick up the cost of replacing those systems in light of a new ruling by the High Court in London.

The judgment provides an insight into how the courts in England and Wales will retrospectively assess contractors’ duties around and compliance with building safety obligations.

This is the first judgment in a cladding defects case since the Grenfell Tower fire in June 2017. It does not, however, relate to the ACM type of cladding that was on the Grenfell Tower. The relevant cladding system in this case was an external wall insulation (EWI) system with EPS (expanded polystyrene) boards. This case is likely to be relevant to disputes that have arisen since Grenfell over the cost of replacing combustible and defective cladding installations.

The case before the High Court concerned a dispute between building owner Martlet Homes and construction contractor Mulalley & Co. Pinsent Masons acted for Mulalley & Co.

Mulalley entered into a contract with Kelsey Housing Association, Martlet’s predecessor, in 2005 to design and build a cladding system for five Hampshire residential tower blocks. In the aftermath of the Grenfell Tower fire in June 2017, Martlet decided to replace the cladding. Martlet claimed Mulalley should be liable for the cost involved with the remedial work because of defects in the installation of that cladding and for the ‘waking watch’ fire safety patrol service it introduced as a temporary mitigation measure before the cladding could be removed.

Mulalley admitted certain installation defects. It successfully argued that the installation defects could have been remediated with limited repairs.

However, the court also held that the design of the cladding system was defective. Mulalley’s designer and specialist supplier specified a well-known proprietary EWI cladding system, the Sto Therm Classic System, on the basis that it had a British Board of Agrément (BBA) certificate as evidence of compliance with building regulations.

The Court held that BBA certificates are not a guarantee or passport to compliance with building regulations and in effect are nothing more than an aid to establish the suitability of a material for a particular purpose. The court acknowledged that in practise BBA certificates were intended to be relied on by the industry in respect of building regulation compliance. However, it said that this cannot be relied upon as absolute proof of compliance or “operate as a get out of jail free card”.

The system specified in the BBA certificate, although never actually subjected to a fire test, was found on the balance of probabilities to be deficient.

The court also considered the guidance in the 2003 edition of BR135, a relevant fire safety standard, and whether a BS8414-1 fire test was required to demonstrate compliance with the building regulations. This is important because the applicable Approved Document B (ADB) at the time of the contract was ADB 2002. ‘Approved documents’ provide practical guidance on meeting building safety requirements. ADB 2002 did not expressly prohibit combustible insulation in buildings over 18 meters in height unless the system had passed a fire test. In a change coming into effect part way through construction of this project, ADB 2006 came into force in April 2007. ADB 2006 does prohibit such use unless a successful fire test has been carried out.

The court found that for the Sto system, ADB 2002, through its reference to the ‘advice’ in BR135, did actually also require a fire test. The court said that this was because it contained sufficient variation in material selection and design from the systems that were specifically referenced in BR 135.

As a result, Mulalley was found to be in breach of its contractual obligation to comply with BR 135 (2003) and the design was deemed defective. Mulalley was held liable for the cost of replacement of the cladding.

The court also determined that Mulalley was liable for ‘waking watch’ costs Martlet incurred, albeit with some reductions on the full cost. This suggests that the courts will give building owners a degree of leeway over the costs they can claim from contractors when they have introduced such temporary precautionary measures, as many have done since pursuing remedial works in the aftermath of Grenfell.

The High Court’s ruling comes at a time when building and fire safety requirements are being stiffened in England and Wales. This comes after a post-Grenfell review of building regulations and fire safety was conducted.

The Building Safety Act 2022 was published in May, with the Health and Safety Executive taking on the role of building safety regulator in the UK. The new legislation includes a new regime for ‘higher risk’ buildings during design and construction and occupation.

Earlier this month, the government published two consultations on the detail of how the new building safety regime will work – one for building control for higher risk buildings during the construction phase and one for occupied buildings.

Aspects of the new regime have already come into force, but much of the major change will happen in October 2023 when new developments will be subject to much more stringent regulatory oversight.

The new consultation on building control clarifies what developers need to do during this period while transitional arrangements under the Act apply. It also details how the new regime will apply in the context of refurbishments to existing in-scope buildings, as well as what changes to construction control plans will be considered sufficiently major to require to be submitted to the HSE for re-approval if the original plans had already been approved by the regulator.

New fire safety laws took effect in England in May this year too. That legislation put beyond doubt that external walls, balconies, windows and flat entrance doors within multi-occupied residential buildings of all heights fall within the scope of existing fire safety legislation. Other proposals have been outlined to complement that legislation and further fire safety regulations will take effect in January 2023.

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