The Week That Was - 28 October 2022
Welcome to The Week That Was, a round-up of key events in the construction sector over the last seven days.
A first instance decision in Martlet Homes Limited -v- Mulalley and Co Limited  is the first reported High Court judgment since the Grenfell Tower fire for a claimant building owner against a design and construction defendant.
On the facts the Court found that the claimant could recover the cost of replacing the cladding, the cost of repair and that of a "waking watch", all being deemed not too remote to be irrecoverable and were reasonable given the alternative and more costly evacuation process. Perhaps most significantly, HHJ Davies found that the argument that “everyone else was doing it” did not, on a proper application of the “Bolam” principle, operate as "a get out of jail free card".
As a result, the builder was found liable for circa £8 million in damages for the costs of investigating, removing, and replacing cladding, including an extensive claim for "waking watch" costs.
To read the whole case, please click here.
Remediation schemes and fire issues
St James’s Oncology SPC Limited v Lendlease  confirms a very generous approach for recovery by claimants when building regulations have been breached and for the recovery of costs of schemes when remediation has not yet been undertaken.
The judge found against Lendlease (design and build contractor) on almost every single issue and confirmed many points in relation to claims for damages when building regulations have been breached.
The judge found that the simple argument that “this received building control sign off” is not in itself a defence. Perhaps even more significantly in terms of quantum the judge confirmed the principles in existing caselaw discussed in Axa Insurance UK Plc v Cunningham Lindsey .
To the read the whole case in more detail, please click here.
Manufacturers anticipating recession as product sales fall
After a two-year period of growth for construction product manufacturers, the third quarter of 2022 has seen a fall in sales, as demand for repair and maintenance decreases. This is the first reduction since nationwide lockdowns were introduced to tackle the COVID-19 pandemic in 2020.
Latest figures from the Construction Product Association shows that the decrease was limited to heavy-side manufacturers. However, light-side manufacturers reported the lowest rise in sales. Over half of the former are anticipating a decline in sales over the next year and just under a quarter of the latter reporting the same.
Whilst economic uncertainty is expected to continue, 82% of heavy-side firms and 61% of light-side firms have reported that they expect overall costs to increase over the next year, with many citing a rise in fuel costs as an important factor.
To find read more on this, please click here.
Construction firms to make additional payments to help staff
Contracting firm, BAM, is the latest to offer a one-off cost of living payment to its staff to support workers during challenging economic times. The firm stated that by providing the majority of its 6,000 staff a £750 payment they hoped to "try to support and ease some of the burden" that their colleagues were facing in light of the cost-of-living crisis.
BAM joins a list of businesses including Skanska (£750 to approximately 1,300 colleagues), Sisk (£900 to all UK staff), Keltbray (£1,000 to almost all employees) and Galliford Try (£750 to approximately half of all UK colleagues).
For more details, please click here.
Thomas Barnes & Sons plc v Blackburn with Darwen Borough Council  EWHC 2598 (TCC)
In the above case, HHJ Stephen Davies commented on the evidence of the factual witnesses. He criticised the contractor's witness statements which were "replete with commentary and opinion", despite including confirmations of compliance with PD 57AC. The witness statement in question contained copious reference to and comments relating to various documents, many of which they had not seen at the time of writing. This was taken into account when assessing witness credibility.
In addition, it was considered whether to draw adverse inferences from the defendant's failure to call certain witnesses, outlining various situations in which such a failure might arise and how a court would react. It was stated that where a party has been unable to call a witness for reasons outside its control, where it would plainly be wrong for the court to hold that against the party, that party would need to adduce proof that it had made reasonable efforts to trace and call the witness.
The full judgment can be found here.
Key stats on high-rise buildings
The latest statistics released by the Department for Levelling Up, Housing and Communities show that 1 in 10 residential high-rises identified in the aftermath of the 2017 Grenfell Tower fire still use aluminium composite materials ("ACM")
In total, 48 buildings have yet to be fully remediated and are unlikely to meet the new Building Regulations. Of this number, 24 have not begun remedial works and a further 9 have gone no further than announcing their intention to remediate. The majority of these buildings are concentrated around Manchester and Greater London with Brent and Tower Hamlets both having between 10-20 identified buildings in their local authority areas alone.
345 (representing 7 out of 10) of the identified high-rises have been fully remediated and received building control sign-off, while a further 93 have had the ACM cladding fully removed or are complete and awaiting sign off.
The full data release from the Department for Levelling Up, Housing and Communities can be found here.
Authors for this week's edition: Fiona Engledow, Jonathan Chambers and Emma Higgins
Disclaimer: The information in this publication is for guidance purposes only and does not constitute legal advice. We attempt to ensure that the content is current as at the date of publication, but we do not guarantee that it remains up to date. You should seek legal or other professional advice before acting or relying on any of the content.