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Replacement of Cladding

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Whether the court considered the replacement of cladding inevitable in a defects claim.

The background

In Wharfside Regeneration (Ipswich) v Laing O’Rourke Construction South Ltd and others [2018], Laing O’Rourke (“Laing”) had been appointed as a contractor to construct high-rise flats in Ipswich. Some years after completion, sections of the cladding on the building fell off in bad weather. During subsequent investigations, the standard of the cladding itself was considered, including its fire retardancy.

Laing had previously agreed that, if it was liable to do so, it would repair the existing cladding rather than replacing it with cladding of a higher specification. In the event, Laing found that the price difference in any event would be minimal and it agreed it should replace the cladding altogether. A new schedule of loss increased the estimated replacement costs from £3m to £9m; Laing wished to withdraw its admission and instead repair the cladding for the lower sum.

The decision

The Technology and Construction Court found that Laing was able to withdraw its admission, stating that the reasonable course of action based on the costings was relevant to its decision, rather than an admission of fact.

Wharfside contended that replacement was inevitable in any event, as the cladding was not fit for purpose due to its fire retardancy. Experts had previously considered repair, and the proposed scheme of repair works was prepared in significant detail. The Court deferred any decision as to whether the repair cladding works would offer the same levels of fire retardancy as replacement cladding, stating that this was a matter for a further trial.

Advice and action for landlords

Relevant to much of J B Leitch’s work in managing aluminium composite (ACM) cladding replacement cases for landlords, this case looks at the issue of withdrawal of admission in the context of cladding repair.

A useful guideline which references the cladding issue, the decision illustrates matters a court may consider in reviewing a claim for withdrawal of admission, in particular what is reasonable based on costs assessed at the time and whether any prejudice was presented by withdrawing the admission on the basis that repair works had been previously considered.

Although the Technology and Construction Court found that Laing was able to withdraw its admission, Wharfside contended that replacement was inevitable in any event as cladding was not fit for purpose.

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