Grenfell: limitation rules influence cladding claims

11 March 2022

Nyree Applegarth, Head of Property Disputes, examines how limitation rules continue to influence cladding claims following the Grenfell disaster.

I have commented many times previously on the ongoing litigation surrounding cladding claims and fire safety concerns, which came to the fore following the Grenfell fire in 2017. 

There are numerous cases now ongoing where building owners are suing contractors who were paid to carry out works on residential tower blocks and where unsafe cladding may have been selected and installed. 

One of the ways in which the defendants to such claims try and avoid responsibility is to rely on limitation rules, preventing a claimant from issuing proceedings, in many cases outside a six-year contractual limitation period. 

There is a basic principle of English law that a party only has a limited period in which to bring a claim against another party - and there are only limited circumstances in which a claimant can bring a claim outside of the contractual limitation period, for example where a claimant had no knowledge of the defendant’s breach, or any ensuing loss or damage within the contractual period. 

A limitation defence is a powerful defence on the part of a defendant and the rules in relation to limitation are applied strictly by the courts.  I was, therefore, not surprised to see a limitation argument raised in a case involving disputed liability for defective cladding in a recent decision that has been reported, namely in Mulalley and Co Limited -v- Martlet Homes Limited

In that case, Martlet owned five residential towers in Hampshire and had appointed and paid Mulalley, the contractor, to carry out works on the towers between 2005 and 2008, including the selection and installation of a proprietary external wall product (i.e. cladding for the uninitiated!).

After the Grenfell fire in 2017, Martlet carried out checks on the towers and discovered major fire safety defects with the cladding.  They, therefore, issued proceedings against Mulalley right at the end of the contractual limitation period and were, at that time, only able to bring claims in respect of four of the towers. 

The claim alleged that Mulalley had inadequately designed and installed the unsafe cladding.  Mulalley denied this, arguing that the system that they had put in complied with the regulations at the time that the panels were installed and that the combustible material was not prohibited in 2005-2008. 

In addition, they argued that the building owners’ loss arose from the need to comply with government advice and requirements in 2017, not from any breach on its part.  After they received the defence, Martlet then sought permission to amend their claim to argue that the cladding did not comply with the building regulations at the time of installation and that the defence of causation arose from the contractors’ wrongful choice and use of the system and inclusion of the unsafe material. 

Rule 17.4 of Civil Procedure Rules provides that where a limitation period has expired, which it had in this case, the court can only allow an amendment to add or substitute a new claim where that new claim arises from the same, or substantially the same, facts as the existing claim which has been issued within the limitation period. 

In this instance, the judge decided that the amendment was a new claim but it arose from the same, or substantially the same, facts and granted permission for the building owner to proceed with its amended claim. 

Mulalley appealed and contended that the amendments did not amount to a new cause of action but when the matter was referred up to the Court of Appeal, they upheld the original judge’s decision.  In their view, the Court of Appeal found that the amendment comprised a new cause of action. 

It was expressly pleaded as a contingent claim only to be relied on if Mulalley succeeded in showing that despite the defective installation it was always going to be necessary to replace the cladding system because of the selection and use of the combustible insulation and the emphasis on the original particulars of claim was on workmanship, whereas the combustible insulation claim was concerned with design choices. 

In any event, they thought that the proposed amendments arose from the same, or substantially the same, facts as had already been pleaded.  The case is, therefore, proceeding and I will watch with interest further developments in this area.

We have worked with numerous clients and helped them to navigate through a complex legal framework, to resolve, wherever possible, issues that have come to the fore since the Grenfell fire, relating to ACM and other unsafe building cladding.

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