Massive cost after Grenfell cladding found on my building?

Reply to the comment left by Giles Peaker at 04/11/2017 - 13:45
Giles, my point is that it's worth looking in to rather than simply accepting the management companies decision that the leaseholders are responsible for the costs; which we both seem to agree on. We simply can't comment with any authority without having all the facts; which the review that we both advocate would elicit.

The OP states that the cladding is the same as Grenfall. Is that a fact or a generalisation? It's important to be certain. I understand that the Grenfell cladding was certified as meeting the required standards so if it was the exact same cladding and it's now failing the tests, the original certification test was flawed. If the cladding is the same as Grenfall, the outcome of the public enquiry would presumably identify whether there is a viable target - assuming it reports in time.

I'd also agree that there is no point in proceeding unless the chances of success are good. Ultimately there is likely to be an insurer standing behind this should there be a successful action. Even if the culpable organisation went into administration on the back of a claim, I understand that there is legislation (rights of third parties against insurers) ensuring that the aggrieved party can still recover from the insurer.

If the culpable party has no insurance and is essentially a 'straw man', then I'd agree that there is no point in proceeding. It would be good money after bad.

Hi all. Wow, what an erudite group of folk you all are. It has been a fascinating discussion, and gives me (and the other leaseholders) much to think about. We have been told that the cladding is the same as Grenfell. Perhaps we shall need to register our complaint and wait until the Grenfell report arrives. Meanwhile, attempt to discover more of the background to the cladding being added in the first place. Generally, the prospect looks bleak, and I'm hoping our M.P. might come up with a solution, or at least a compromise. Thank you all. And if you suddenly spot a solution, do keep adding to the link. James.

Reply to the comment left by Paul Fay at 04/11/2017 - 14:27
Latent Damage Act negligence only applies where there is actual damage to the building. There is no damage here. There is economic loss, but not damage to the property. So there is no negligence claim under Latent Damage. (That is even if the leaseholders could bring such a claim, which they couldn't, and even if the negligence could be identified on the part of some person/body who owed them a duty of care, which it very likely can't).

Every other possibility is time barred in this case. It may not be in others.

I do this kind of work. If there were realistic options to explore, I'd be suggesting them.

The OP and a large number of other leaseholders are going to be in very difficult positions. If cladding was put on as major works previously, there may be an argument for the unreasonableness of a second charge. But even then, if the freeholder or FMC hasn't got the funds to deal with the problem - and few will - where does that leave the leaseholders? With a dangerous building, an unsaleable asset, and no way out of the situation but to pay up.

Reply to the comment left by Giles Peaker at 04/11/2017 - 17:44
Excellent point about economic loss. Case closed!

If a 2013 new build block on which this type of cladding was used & is now deemed dangerous & needs to be replaced, would leaseholders be able to claim on their NHBC?

Reply to the comment left by Giles Peaker at 04/11/2017 - 17:44I agree with Giles and whilst I am not a litigator I see a problem with trying to get round the limitation periods by using the Latent Damage Act 1986. The claimants (James and the other leaseholders) would have to argue that there was negligence on the part of the freeholder when the cladding was put in such that the freeholder is liable and simultaneously that the negligence was not such as could be discovered by the claimants.
A latent defect is a defect caused by a fault in design, materials or workmanship, that existed at the time construction was completed but was not apparent at the time of completion. I think it will be impossible to prove this as the cladding is highly visible. If it should have been apparent to the freeholder that it was defective, it should have been apparent to the leaseholders.

James, waiting until the Grenfell inquiry issues its report won't fix the problem and in the meantime, it may be impossible to sell or mortgage the flats. In addition, would it not now be negligent to delay sorting out the problem? Think of the reaction if there were fire and the cladding burned like that at Grenfell Tower.

Thanks Ian. By 'delay' I meant delaying our claim against whoever, until further details appear from the Grenfell inquiry. The actual work will still go ahead, asap. Quotes sorted, and starting dates arranged.... I can't believe that this problem hasn't arisen in other privately owned high-rise flats. A huge number have been tested, and found wanting. I wonder if some local Councils have come to some arrangement with the owners and are willing to provide a financially level playing field between Council-owned flats and privately-owned flats? James.

Again I have to emphasis that I am in no way linked to the legal profession, however, I have come across the following which may be of potential relevance re economic loss:
Losinjska Plovidba v Transco Overseas Ltd, The Orjula [1995] was a claim in negligence. For the claim to succeed there must be damage as pure economic loss is not recoverable in tort. The defendant failed to properly secure a number of barrels of hydrochloric acid that were being transported on the claimant’s ship, resulting in leakage which left a layer of acid on the ship’s deck. The only ‘damage’ pleaded was that the spillage meant that the claimants could not dock their ship in a normal berth but were forced to take it to a specialist cleaning berth where the layer of acid could be removed, causing the claimant to incur extra costs. Although the claimant did not plead any ‘damage’ in the sense of a physical change to his ship, there was an ‘interference’ with it. Mance J held the defendants liable for this interference. The Court of Appeal considered that the fact that the property in question required the expenditure of money to restore the property to its former usable condition was material.

I do agree that if there is an action, it is for the freeholder to pursue but there is no reason why the leaseholders cannot fund it as a successful action would be in their interest rather than the freeholders. Given the above, I would again look to obtain a formal legal opinion and do some fact finding.

Reply to the comment left by Laura Delow at 05/11/2017 - 07:58
Definitely worth looking into. I'd try the NHBC in the first instance but the contract (for the original leaseholders) was with the builder. Under the supply of goods and services act applicable in 2013 (now Consumer Rights Act 2015). The fact of the matter is that the property as sold did not comply with the Building Regulations (probably despite reasonable attempts to) and as others have said, the property is now more of a liability than an asset.

If the lease has changed hands, I suspect that the builders liability may have died with the change unless it's covered by the NHBC.

Reply to the comment left by Ian Narbeth at 06/11/2017 - 10:11
Ian - I disagree with this comment:

A latent defect is a defect caused by a fault in design, materials or workmanship, that existed at the time construction was completed but was not apparent at the time of completion. I think it will be impossible to prove this as the cladding is highly visible. If it should have been apparent to the freeholder that it was defective, it should have been apparent to the leaseholders.

If the cladding was (incorrectly) certified as being fit for purpose to comply with the building regulations, how would the freeholder or leaseholder know any different. It has required specialist testing to identify the latent defect.