Cladding and fire safety updates – no get out of jail free cards available

Following 1) Martlet Homes Ltd v Mulalley &Co Ltd and 2) LDC (Portfolio One) Ltd v George Downing Construction Ltd and European Sheeting Ltd, the High Court has found in favour of allowing building owners to recover the costs of remedying defective or unsafe cladding, and for waking-watch costs.

In both cases, the Technology and Construction Court (TCC) has taken a tough approach in establishing a breach of contractors obligations, setting the bar high for contractors who are looking to challenge the reasonableness of remedial works carried out by the building owner.

The decision of the Martlet v Mulalley case is discussed below:

1. Martlet Homes Ltd v Mulalley &Co Ltd

This was the first judgement given by the High Court since the Grenfell Tower disaster in 2017. The judgement considered the replacement of cladding and recovering waking watch costs.

The claim was brought by Martlet Homes as building owner against Mulalley as contractor for 1) the costs of replacing combustible cladding 2) cost of waking watch pending the replacement.

Martlet argued that the specification of a certain type of cladding was a breach of contract and its installation of that cladding was also defective.

Defective cladding 

Mulalleys position was that the cladding was not defective and that the decision to replace the cladding was as a result of the Grenfell disaster, in that it was no longer considered safe.  They also disputed that the cladding was improperly installed and in breach of building regulations.

Damages were awarded in favour of Martlet and in relation to the cladding, the Court decided that Mulalley had not exercised reasonable care and skill in selecting that cladding, as any reasonable competent contractor would have known that the Building Regulations contained a clear recommendation to avoid the type of cladding system in question for high rise residential buildings unless testing had been carried out.

The Court was explicit that just because the use of that cladding was common, it was not a get out of jail free card.

Waking watch costs

Mulalley argued that Martlet should not be able to recover waking watch costs as they were too remote but this was rejected by the Court who concluded that the waking watch was a reasonably contemplated consequence of the breaches.

The TCC awarded damages of over £8 million to Martlet, covering both the waking watch costs and the remedial works.  Case law is continuing to evolve in this area but it is clear that the TCC is taking a robust stance on the requirements stipulated by the Building Regulations and are not entertaining any arguments that unsafe cladding commonly used, renders it as reasonable.

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