Developer to pay £900,000 in damages over building defects

The builders of a Hartlepool housing development have been ordered to pay almost £900,000 in damages to the owners of 10 homes that have suffered defects and damage as a result of defective piles. However, the final bill could be higher, once the High Court ruling in respect of 10 lead cases is applied to a number of other homes suffering defects. Ramsey J found that Shepherd Homes (SHL), which built the 94-home Eden Park development on a former landfill site between 2002 and 2004, is liable to the 10 lead claimants for breaches under the Buildmark Cover and the Defective Premises Act 1972. He also found SHL liable under the sales contracts of the eight claimants who bought their homes direct from the developer. He said: “There can be no question that the claimants have each suffered from the fact that the houses that they bought have had defective piles. It has caused them worry and concern and prevented them from moving home when they wanted to or from fully enjoying the houses which they have purchased. “In such circumstances, there is great sympathy with the position in which the claimants have found themselves and an obvious wish to provide the claimants with proper damages. “On the basis of my findings on these lead cases, it is hoped that the parties will be able to resolve the claims on the remaining properties.” Rather than compensating the homeowners with damages to represent the full cost of repiling the properties – which will involve the partial demolition and rebuilding – he ruled that damages should be calculated on the basis of the loss in value of the affected properties. Ramsay J ruled that a limited amount of additional damages could also be awarded for distress and convenience, but continued: “As a matter of policy, the damages for this loss are modest and the physical aspects must be differentiated from the considerable worry, anxiety and other problems that the claimants have undoubtedly suffered because of SHL’s breaches but for which there is no recovery of damages in law. “I have therefore based my award generally on a figure of some £150 per person per year for the limited aspect where the law permits recovery.” He added: “On the basis of my findings on these lead cases it is hoped that the parties will be able to resolve the claims on the remaining properties.” Harrison and others v Shepherd Homes Ltd and others Technology and Construction (Ramsey J) 11 July 2011. Andrew Bartlett QC, Robert Stokell and Crispin Winser (instructed by Tilly Bailey & Irvine LLP, of Wunyard) appeared for the claimants; Roger Stewart QC, Anneliese Day and Sian Mirchandani (instructed by Weightmans LLP, of Manchester) appeared for the first defendant.