The High Court has delivered its first judgment concerning fire safety external wall insulation in Martlet Homes Ltd v Mulalley & Co Ltd [2022] EWHC 1813 (TCC).
The case concerned works to refurbish five tower blocks in Gosport with an external wall insultation system (EWI) that included combustible expanded polystyrene insulation (EPS), fire breaks and render covering carried out between 2005 and 2008. The claimant owner of the blocks sought to recover from the defendant building contractor £8m in damages for costs incurred from 2017 onwards in investigating and remedying, removing and replacing the EWI and providing a waking watch in the meantime.
While the defendant admitted some defects in the installation of the EWI, it denied that they justified the replacement work carried out between 2018 and 2020 and argued that the real reason for the replacement scheme was the heightened specification requirements following the Grenfell Tower fire.
No particular problem was experienced with the cladding system following practical completion. The case focused on the causation of loss – the claimant alleging installation and specification breaches by the defendant – and the quantum of recoverable loss with regard to the replacement scheme costs incurred versus the defendant’s alternative repair scheme costs and the waking watch costs.
Under the terms of the contract, the defendant was responsible for the design, including design it had obtained from others, as well as the execution of the works, and was required to comply with all prevailing statutes and local authority bylaws, which included building regulations. The Building Regulations 2000, in force at the date of the contract, required that the building should be designed and constructed so that the unseen spread of fire and smoke within concealed spaces in its structure and fabric was inhibited and that the external walls should adequately resist the spread of fire over the walls and from one building to another. The Building Regulations 2010, which apply today, are materially identical in those respects.
There were defects in the installation of both the fire barriers and the EPS and even if there had been no installation breaches the defendant would have been in breach because of the system specified. The building regulations recommended that a combination of the combustible EPS and an organic surface render comprised in the EWI system installed should not be specified for use in high-rise residential blocks unless shown by testing to have met the relevant standards. No such testing had been carried out.
Applying the “but for” test of causation, the court found the installation breaches an effective cause of the loss suffered by the claimant which led to the decision to replace the cladding, and so the defendant was liable for such loss. Without the specification breaches, however, it would have been unreasonable to have allowed the claimant to recover more than the cost of the remedial works. There was also a causal link between the breaches and the waking watch which was implemented when some of the installation and specification breaches had become apparent. Such costs were not too remote and reasonable mitigation compared to a full-scale evacuation.
Louise Clark is a property law consultant and mediator
