Fire Safety: First Substantive Post-Grenfell Judgment
July 2022The first substantive judgment on fire safety post-Grenfell has arrived.
Continuing the focus on fire safety of residential buildings following the Grenfell Tower fire in 2017 and the recent introduction of the Building Safety Act 2022, the Technology and Construction Court recently handed down its decision in Martlet Homes Limited v Mulalley & Co. Limited. We have previously reported on earlier procedural decisions in the litigation, which can be found here and here.
As a preliminary comment, it should be noted (as the Court pointed out) that the decision turned on its specific facts and strict contractual provisions. Given this, it was not necessary for the Court to decide whether the specification of certain products would constitute breaches in other circumstances, and under other contracts.
Background
Following the Grenfell Tower fire on 14 June 2017 Martlet Homes Limited (Martlet), a social housing provider, undertook an investigation of the external walls at a number of buildings in Gosport, all over 18m in height. These buildings had been refurbished between 2005 and 2008 by Mulalley & Co. Limited (Mulalley).
The investigations identified that the StoTherm Classic external wall insulation (EWI) system specified and installed on 5 towers contained an inner layer of expanded polystyrene and that there were installation defects, including in the fire barriers. The EWI had been retrofitted to the existing concrete towers.
Having taken expert advice, Martlet decided to remove and replace the EWI. It sought £8m from Mulalley in respect of the replacement scheme and the costs of a waking watch as a precautionary measure until the original EWI system had been removed. This was described as the Installation Breach Case.
Mulalley conceded that there had been some defective installation, but not to the extent to justify full replacement works or the waking watch. Its argument was that the real cause and justification for the replacement works and waking watch was that Martlet realised, post-Grenfell, that the EWI did not meet heightened fire safety standards imposed post-Grenfell, and which did not apply at the time of the original works. Mulalley also argued the only work required to rectify the installation defects was a more limited repair scheme.
In response, Martlet sought and obtained permission to plead a fallback case: that the EWI as specified did not meet applicable fire safety standards at the date of the contract. It contended this entitled it to recover the replacement and waking watch costs in full. This was described as the Specification Breach Case.
Judgment
The Court found Martlet succeeded on both the Installation Breach Case and the Specification Breach Case. It is the latter that took up the majority of the judgment.
Specification Breach Case
Under the contract between the parties, Mulalley had obligations including compliance with “… any Act of Parliament, any instrument, rule or order made under any Act of Parliament, or any regulation or byelaw of any local authority or of any statutory undertaker which has any jurisdiction with regard to the Works…’. Given the strict obligations in the relevant contract, this was to include the Building Regulations 2000; and was affirmed by the Employer’s Requirements stating that the works were to be designed and constructed in accordance with industry codes of practice and standards, including certificates issued by the British Board of Agrément (BBA); and were to conform with the contents of certain publications including Building Research Establishment (BRE) Reports.
Regulation 4 of the Building Regulations 2000 required building work to be carried out so that it complied with the applicable requirements in Schedule 1, known as the functional requirements. Requirement B(4) addressed external fire spread, with sub-requirement B(4)(1) stating “the external walls of the building shall adequately resist the spread of fire over the walls and from one building to another, having regard to the height, use and position of the building”. The question was what constituted proper evidence to meet this functional requirement.
In its defence, Mulalley placed great reliance on a 1995 BBA Certificate for the EWI. This certificate, in force at the time of the original works, contained statements with respect to properties in relation to fire and general conformance with functional requirements under the Building Regulations 2000 due to the inclusion of fire barriers. In the absence of further testing being performed in respect of the system in accordance with the certification, the Court held that “the 1995 BBA Certificate cannot be read as if it was a guarantee that the StoTherm Classic system complied with requirement B(4)(1)”. In other words, Mulalley could not simply rely on the BBA Certificate to demonstrate compliance.
The Court also considered BRE 135 (2003). Based on a combined reading of the applicable Building Regulations and guidance notes, the Court found that BRE 135 (2003) set out a “performance standard which was to be found in Annex A and which was to be assessed through the tests to be undertaken in accordance with BS 8414-1”. BS 8414-1 is a test method for non-loadbearing external cladding systems applied to the face of a building. The Court also found BRE135 (2003) contained a recommendation and/or advice that the default position for a system such as the EWI, given it had combustible elements, was that it should not be specified for use in high-rise residential buildings unless it met the Annex A performance standard.
There was no evidence the EWI had passed a BS 8414-1 test (such as to meet the Annex A performance standards). Nor was there any evidence that the EWI satisfied all the general and system-specific principles set out within BRE 135 (2003). Equally, there was also no evidence that the EWI had failed a BS 8414 test.
The Court also considered the obligation to exercise reasonable skill and care. On the specific facts and evidence of the case, the Court accepted Martlet’s argument that the mere fact other professionals were acting or advising in the same way at the time does not, on a proper application of the Bolam principle, operate as a get out of jail free card. The Court followed the analysis of Edwards-Stuart J in 199 Knightsbridge Development Ltd v WSP UK Ltd, that for the Bolam principle to operate to exonerate a defendant, there must be “evidence of a responsible body of opinion that has identified and considered the relevant risks or events and which can demonstrate a logical and rational basis for the course of conduct or advice that is under scrutiny”.
Bringing all of the above together, the Court found that the EWI in this case did not satisfy functional requirement B(4)(1) under Schedule 1 of the Building Regulations 2000. Given this was a contractual requirement, it followed that Mulalley was in breach of contract. The consequence was that Martlet succeeded on the Specification Breach Case and was entitled to recover the costs of the replacement scheme, including the waking watch. The waking watch costs were found not to be too remote and were recoverable as a reasonable step taken in mitigating the potential greater loss that would have followed if the buildings needed to be evacuated.
Installation Breach Case
As noted above, Martlet also succeeded in establishing the Installation Breach Case.
Had it only succeeded on this case (ie. in proving the existence of defects), then the Court found it could only have recovered the costs incurred referrable to repair those defects, and not the more extensive replacement scheme ultimately implemented. As part of this, Martlet would still have been entitled to recover waking watch costs, albeit for a reduced time period.
Comment
The decision will be of interest to a wide range of individuals and organisations; however it should be noted that Martlet v Mulalley turned on its specific facts and contractual provisions, products, and fire safety standards.
As of the time of writing, it is unclear whether any of the judgment will be appealed.
What Martlet v Mulalley does not do is deal with apportionment between different project team members where fire safety issues arise. This may simply be because of the contractual structure in place for this project, or because other entities involved in the project no longer exist given the passage of time. However, it is an issue that will likely also end up before the courts before too long.
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