Earlier in July, and for the first time since the Grenfell Tower disaster in 2017, the Technology and Construction Court (TCC) issued a significant judgment in a case focused on the combustibility of cladding.

The cladding was installed by Mulalley & Co Ltd (“Mulalley) during a refurbishment of 5 tower blocks between 2005 and 2008 under a building contract with Kelsey Housing Association Limited (“Kelsey”). Martlet Homes Ltd (“Martlet”) acquired the tower blocks from Kelsey in 2017. Following Grenfell, Martlet carried out fire safety investigations, replaced the cladding installed by Mulalley and set up a waking watch until the cladding was removed. Martlet subsequently made a claim against Mulalley based on the arguments that:

1. the cladding fire barriers and the EPS insulation used were incorrectly installed (“Installation Breaches”); and
2. even if the installation breaches had not taken place, Mulalley’s use of EPS insulation was a breach of the building contract and of Building Regulations (“Specification Breaches”).

Mulalley accepted that there were some defects in relation to the Installation Breaches, but maintained that there was no causation between Mulalley’s Installation Breaches and the complete replacement of the cladding and introduction of the “waking watch” by Martlet. The basis of this argument was that Martlet’s decision to replace the cladding had been as a result of the discovery of the Specification Breaches, rather than the Installation Breaches, and the Specification Breaches could have been resolved by repair rather than replacement (which would have been much cheaper). In relation to the Specification Breaches, Mulalley relied on certificates from the British Board of Agrément (“BBA”) as evidence that the EPS insulation compiled with Building Regulations.

The court found in favour of Martlet, deciding:

1. in relation to the installation breaches, the TCC found that the cladding and insulation was defectively installed; and

2. under the building contract Mulalley was required to comply with Building Regulations. That depended on whether it had tested the cladding to ensure it passed the British Standard 8414-1 (BS 8414-1 test) test as recommended in the Building Research Establishment report 135 (BRE 135) and there was no evidence this testing had been done. Mulalley was also expected to exercise reasonable skill and care in the design of the cladding and any reasonably competent specifier would have known that BRE 135 clearly recommended avoiding specifying a cladding system such as this unless there was evidence that it met the BS 8414-1 test. Mulalley could not blindly rely on the BBA certificates or the “everyone else was doing it” argument as evidence of compliance. Therefore the use of the EPA insulation was a breach of Building Regulations.

3. The TCC also held that the part of the claim related to the use of a waking watch while the cladding was replaced was not too remote as it was a reasonably foreseeable consequence of Mulalley’s breaches, even if it was not widely held knowledge at the time the cladding was installed, due to the clear and serious fire risks imposed by the Installation Breaches and Specification Breaches.

Martlet was awarded approximately £8,000,000 in damages (the amount claimed) for the fire safety investigations, the removal of the defective cladding and its replacement and the provision of a waking watch. 

While future disputes will certainly be assessed on a case-by-case basis, this judgment provides a clear indication of the strict position that the TCC is likely to take in future cladding disputes and, in doing so, will heavily influence the views of claimants, defendants and their insurers regarding the likelihood of a successful claim being made, the size of such a claim and which remedial/safety measures are likely to be recoverable.