Grenfell Phase 2 Report: impact on contractors

This impact note focuses on the findings detailed in Phase 2 of the Grenfell Tower Inquiry, specifically concerning the appointed principal contractor and cladding subcontractor. It also explores recommendations that will generally impact contractors and the wider construction industry going forward.

The Phase 2 Report was published on 4 September 2024, and in considerable length outlines the circumstances and causes of the fire. Our earlier article outlines the main findings.

The Report’s Key Findings[1]:

To summarise, the key findings from the Report involving the principal contractor (Rydon) include:

• The principal contractor was responsible for the refurbishment of Grenfell Tower in 2015-16, which included combustible cladding.
• The principal contractor failed to act in accordance with the standards of a reasonably competent main contractor.
• The principal contractor was said to bear considerable responsibility for the fire. The following key examples were cited, particularly since the principal contractor:
• Engaged in discussions with the TMO about procurement of the refurbishment project and the costs budgets outside of a formal procurement regime.
• Failed to identify its own responsibilities for important aspects of the building’s design and in each case assumed that someone else was responsible for matters affecting fire safety.
• Took a casual approach to contractual relations for the refurbishment and did not properly understand the nature and scope of the obligations it had undertaken.
• Failed to coordinate the design work properly and make clear which contractor/party was responsible for what. There appears to have been confusion on the role of the fire engineer post-novation for example.
• Failed to investigate the competence of subcontractors and to adequately monitor or manage them throughout the project.
• Used an inexperienced team on the refurbishment that did not have sufficient knowledge of statutory requirements and guidance, Building Regulations or the Approved Documents applicable to the project.
• Relied entirely on the cladding subcontractor to draw attention to any errors in the design, however it did not specifically ask for a review of the architect’s work. Due to the lack of knowledge, it was in no position to know whether the right questions had been asked or to evaluate the information given to it.
• Had no, or no effective, system for ensuring that its employees received regular training during their employment.
• Failed to give sufficient importance to fire safety risks or the safety of the building’s occupants –for example it did not properly co-ordinate, supervise and monitor the work.
• Displayed a casual attitude to fire safety throughout the project. It relied on previous experience of certain fire safety matters rather than on any technical analysis or expertise.
• Was complacent about the need for fire engineering advice and also failed to realise that the final fire safety strategy had not been completed.
• Carried out inadequate inspections because it failed to detect some serious defects in workmanship, particularly in relation to cavity barriers.
• Focussed on cost budgets and value engineering. The Report notes that in “theory, “value engineering” involves making changes to the design or specification that reduce cost without sacrificing performance, but in our view it is in practice little more than a euphemism for reducing cost, because substituting a cheaper product for a more expensive one or altering the design or scope of the work in a way that reduces cost almost invariably involves a compromise of some kind, whether in content, performance or appearance. Certainly, in the present case the expression was being used by the parties simply to mean changes that would lead to a reduction in cost”[2].
• Failed to sufficiently review or meaningfully consider the products certificate in sufficient detail, instead relying on the fact that the product had been used on other projects. In addition, the Report concludes that the principal contractor effectively had an interest in promoting the selection of the ACM panels.
• Failed to reply to contemporaneous emails on flame retardance qualities from the TMO following a fire at another building.
• Appears to have failed to take account of information or lessons learnt in respect of other fires at other buildings, for example around the importance of cavity barriers.

The main findings of relevance to the construction industry, including the principal contractor included the following:

• Design and build contracts typically make the principal contractor responsible for range of activities relating to the work, even though it engages sub-contractors to carry out different aspects.
• Contractors and parties need to become more technically competent and take a more active role in considering and ensuring fire safety requirements are met. This includes by ensuring ensure the responsibilities of each party on a project are clearly defined and managed.
• The construction industry was under a wide misconception concerning the reliability of products information, including testing and certification. This included a misunderstanding by the cladding subcontractor that limited combustibility and Class 0 in products were interchangeable.
• There is a wider perception that construction industry needs to be less willing to sacrifice quality to speed and cost overall.

To summarise, the key findings from the Report involving the cladding subcontractor (Harley Facades) are as follows:

• The cladding subcontractor was responsible to the principal contractor for all aspects of the design and construction of the facade of Grenfell Tower as part of the refurbishment in 2015-16, including the cladding, insulation, window frames, window infill panels, glazing and cavity barriers.
• As the specialist contractor responsible for the external wall of the tower, the cladding subcontractor was said to have fallen below the standard expected of a reasonably competent cladding contractor.
• Further, the cladding subcontractor was said to bear a significant degree of responsibility for the fire. The key concerns raised in the Report include that:
• Like the principal contractor, it was said to have taken a casual approach to contractual relations and did not properly understand the nature and scope of the obligations it had undertaken. Further, it also considered that responsibility for the suitability and safety of the materials to be used in the external wall lay with someone else. However, responsibility for the quality of decisions, affecting the design of the refurbishment or their compliance with the Building Regulations, sat with the contractor and subcontractor.
• Failed to sufficiently concern itself with fire safety at any stage of the refurbishment and appears to have thought that there was no need to do so because others involved in the project (in particular, building control) would ensure that the design was safe.
• Used employees and representatives with limited or inadequate technical expertise and who were unaware of fire safety guidance in building regulations. None of the employees involved in the refurbishment had even a basic grasp of the fire testing regime that applied to the products used in the external wall of the Tower.
• Failed to ask sufficient questions about the materials being considered that a reasonably competent cladding contractor would have asked. It did not properly review the products certification.
• Failed to follow up on other queries or requests for information raised with the architect or fire engineer on the project.
• Was induced to buy flammable cladding panels based on its existing relationship with Arconic and the fabricator, with which it was able to negotiate a favourable price. Further, the Report references there were discussions between the subcontractor and the architect, and notes that ACM was widely used because it was the cheapest product available and used on tower blocks by them more than any other product.
• Appears to have been exploited by a product manufacturer, who appears to have classified its customers based on their technical sophistication.
• Failed to implement a fully effective procedure for reviewing the status or progress of the design at particular points in the life of the project or for reviewing the design as it developed.
• Appears to have failed to take account of information or lessons learnt in respect of other fires at other buildings, for example around the importance of cavity barriers.

Relevant Recommendations[3]:

 Given the findings of the Inquiry, the Report makes the following recommendations for contractors.

• There should be a licensing scheme for contractors wishing to construct/refurbish higher risk buildings with the overall ambition of ensuring qualification by experience and organisation and increased competence.
• Introduction of a new legal requirement that any application for building control approval for the construction or refurbishment of a HRB (Gateway 2) be supported by a personal undertaking from a director/senior manager of the principal contractor to take all reasonable care to ensure that on completion and handover the building is as safe per Building Regulations.
• Clarification and revision of relevant Approved Documents and statutory guidance, with appropriate review from those with practical industry experience chosen for experience and skill.
• Guidance should be revised to contain clear warnings that legal requirements are contained in the Building Regulations and compliance with guidance will not necessarily result in compliance with them.
• Encouragement of the development of continuing professional development courses in fire engineering for construction professionals and members of the emergency services.

Other wider recommendations in the Report that may impact contractors include:

• Establishment of a single construction regulator to oversee and inform all aspects of the industry. This shall include, among other things, the regulation and oversight of building control, and conformity of construction products with legislation, guidance and standards.
• Use of a Chief Construction Adviser with good working knowledge and practical industry experience.
• Review of legal landscape (including potential widening of the Higher Risk Buildings (“HRB”) definition).
• Creation of a construction library with key information including product and test data.
• Creation of an independent panel to consider whether it is in the public interest for building control functions to be performed by those who have a commercial interest in the process. The same panel is to also consider whether all building control functions should be performed by a national authority.

Concluding Remarks:

Overall, the Report identifies that earlier reforms within the construction industry are positive but insufficient to ensure that buildings are designed, built, and maintained safely. Further regulation and training are required across the industry to ensure that buildings and fire safety remain a priority.

For completeness, the Construction Leadership Council also released a report on “Creating Safe Buildings: Delivering safety, competence, and quality“[4] in late August 2024 (i.e. just in advance of publication of the Report), and on the golden thread requirements under the new building safety regime[5]. Nonetheless, it is expressly recognised that this will be reviewed alongside other work on building safety, industry feedback and in light of the findings and recommendations made in the Phase 2 Report.

You can find out more about building safety via our ‘Digesting the Grenfell report’ spotlight page. If you require support on any of the issues raised by the Report or its recommendations, please contact us.

[1] Phase 2 Report, Volume 4, Part 6 (Chapters 53, 55)

[2] Phase 2 Report, Volume 4, Part 6 (Chapter 53), paragraph 53.8

[3] Phase 2 Report, Volume 7, Part 14 (Chapter 113)

[4] CLC Building Safety Report – Construction Leadership Council

[5] CLC-Golden-Thread-Guidance.pdf (constructionleadershipcouncil.co.uk)