Today is the third anniversary of the Grenfell Tower tragedy.
It is a sobering thought that many UK citizens are still living in tall buildings which are clad with inflammable materials similar to those used at Grenfell. The Government set a deadline of June 2020 to remove such cladding from residential buildings, but today’s Independent reports that 56,000 people are still living in buildings with flammable cladding responsible for the disaster1.
One question for the insurance sector is whether the cost of removing and replacing such cladding is covered by its insurance policies. The insurance issue was in the background in a recent High Court case relating to cladding in a tall building: RG Securities (no. 2) Limited v Maskell Limited2.
Maskell had acquired a 1960s concrete frame tower in Ipswich – at 16 storey, the tallest building in Suffolk – and refurbished it with a new cladding system between 2006 – 2009.
RG Securities purchased the building in 2015.
In 2018 they discovered that it did not have a Building Regulations Completion Certificate in respect of the extensive refurbishment work carried out. Neither Ipswich Borough Council nor the Approved Inspector for the works – NHBC Building Control Services – had issued a Building Regulations Completion Certificate.
In 2019 RG Securities brought a claim against Maskell alleging that the building was unfit for habitation due to various defects, including:
- Defects to fire doors;
- Defects relating to the cladding panels used on the exterior of the building, with RG Securities alleging that the cladding is highly inflammable;
- Failure to provide internal fire compartmentalisation between flats and common parts on each of the 16 floors;
- Defects in the windows and safety measures; and
- Works in breach of building regulations.
The Judge observed that “These are just the sort of defects – if they exist, in respect of which I make no findings – that would not be expected to be present in a building that had been given Building Regulations approval for the completed works”.
RG Securities claimed £3.5m from Maskell to remedy the defects.
Maskell argued that RG Securities’ claim should be dismissed as it was time-barred under the Limitation Act 1980. (Under the Act claimants have 6 years from the date on which their cause of action accrues to bring a claim).
RG Securities counter-argued that Maskell had deliberately concealed that the building did not have a Building Regulations Completion Certificate. Section 32 1. (b) of the Limitation Act provides that time does not start to run under the 1980 Act if “any fact relevant to the plaintiff’s right of action has been deliberately concealed from him by the defendant”.
The Judge decided in favour of RG Securities, holding that “the fact that the Property did not have Building Regulation approval for the Refurbished Works as completed was not disclosed to the Claimant, and arguably was deliberately concealed from the Claimant”.
Consequently, the limitation clock was reset to zero when the concealment was discovered in 2018 and RG Securities’ claim was not time-barred.
In relation to the insurance back-story, the judgment reveals that an insurance policy was issued in respect of the refurbishment work. It remains to be seen how this insurance claim will progress.
According to analysis by the Labour Party, reported in today’s Independent, 257 residential blocks still contain flammable cladding.
By Stephen Sykes LL.B, MA, Director at Ashfield Risk Transfer Solutions