How significant is Hyde’s High Court cladding ruling?

As part of the refurbishment works, Mulalley installed an external wall insulation system comprised of combustible expanded polystyrene insulation, fire breaks and render overcoat on the towers. 

In bringing the £8m action, Hyde argued that there had been breaches in the way Mulalley had installed the cladding system and that it did not meet the building regulations at the time of the work. 

Mulalley accepted that there were some installation defects, but interestingly argued that Hyde decided to replace the external wall insulation system because of the concerns raised about combustible cladding following the Grenfell Tower fire. 

Mulalley further argued that it was not liable to pay for the work as Hyde had chosen to replace the cladding system, rather than repair the defects. 

His Honour Judge Davies sided with Hyde, making the important finding that the cladding system (even without the admitted installation defects) did not comply with requirement B4(1) of the building regulations at the time of installation. 

This was due to an absence of evidence that it satisfied the fire safety requirements of the building regulations.

As Hyde succeeded on this, it was entitled to the cost of replacing the cladding.

However, the judge found that if the RP had only succeeded on its case in relation to the installation defects, it would only have been entitled to recover the costs of repairing the towers. Hyde also successfully claimed for the costs of providing a waking watch.

The judgment shows building owners, contractors and lawyers how the TCC is likely to approach cladding cases, and the application of the building regulations, approved documents and associated technical guidance.  

While it can be argued that the case is fact-specific, the judgment is thorough and well-reasoned, and deals with technical and legal arguments that are often disputed in cases involving breaches of the building regulations, particularly where the fire safety of cladding systems is concerned.

The absence of litigated cladding cases to date shows that parties have preferred to settle than to litigate given the absence of any precedent in the courts. 

“If anything, this case should reinforce the importance of seeking to compromise claims before the costs of litigation are incurred”

The case should pose as a warning to contractors that have decided to fight cladding cases, of the significant cost and potential reputational consequences of losing such a high-profile case, particularly following the Grenfell Tower fire. 

If anything, this case should reinforce the importance of seeking to compromise claims before the costs of litigation are incurred.

While the case relates to a particular external wall system, and was decided in relation to particular contractual requirements, it is a helpful decision in that it shows the approach of the TCC on matters of liability and the application of the fire safety requirements of the building regulations in relation to cladding systems.

We expect contractors will re-evaluate their positions in light of the case, but it is likely many will argue that the case is fact-specific and of little, if no, application to projects in which they were involved.

While this may not be a one-size-fits-all landmark decision, it should result in fewer cladding cases hitting the courts. 

Matthew Cocklin, partner, and Adam Mathewson, solicitor, Devonshires