Providers need to be alive to the risk of contractors becoming insolvent and how to limit the resulting inevitable disruption.
We have received instructions from a number of RPs who have tower blocks that have failed the tests undertaken by the Building Research Establishment (BRE) for the Department for Communities and Local Government (DCLG). While these tests are a good start, as David Orr (Chief Executive of the National Housing Federation) has pointed out, they only tell us what we should already know; if the cladding is made of an Aluminium Composite Material, it will fail and should be replaced. However, over the past few days, other experts have come forward and pointed out that the tests themselves are very narrow and do not test the suitability of the entire cladding and fire stopping systems applied to each block. What about the suitability of the insulation sitting behind the cladding panels? How effective is the fire stopping to each floor of the building?
Many contractors who originally fitted the cladding systems are coming forward and asking how they can help. In the hurry to resolve the situation, they are being instructed to remove and replace the cladding panels as quickly as possible. This fails to establish any clear plans for further investigations or what the scope of works should be done to replace any defective materials or systems.
This exceptional situation does, therefore, raise concerns around how remedial works are planned and supervised. In particular, we advise that it would be appropriate to consider retaining a façade engineering consultant to inspect and supervise all works undertaken by appointed contractors. Their role would be to:
- Inspect and record the defects with cladding in situ and, as it is removed, check for any wider defects (including to fire stopping and insulation situated behind the cladding panels);
- Approve the scope of works for all remedial action and approve the cost of works. Such approval will include ensuring full compliance with statutory regulations and any recommendations from the Fire Service, as appropriate; and
- Advise on the cause of the defects and whether there has been any breach of duty on the part of the contractor or consultants who clad the buildings initially that would make it appropriate for them to provide an indemnity for the remedial costs.
To move quickly through the issues is very important, but a considered approach must be adopted. To that end:
- Contracts and consultant appointments should be drafted and entered into to ensure that all usual legal and operational risks are allocated in the most appropriate way. We can assist with this and with advising on exemptions from the EU procurement regime;
- Health and safety arrangements for the proposed works need more intense scrutiny, as there is little or no pre-construction phase time to consider and write the construction phase plan and comply with other duties;
- Although this may be unlikely, it is still necessary to decide whether it is appropriate to re-charge the cost of any improvements to leaseholders through the service charge. If so, consultation will be required about the proposed work. We can advise on this or on the case for obtaining dispensation from the consultation requirements; and
- We can assist with reviewing the findings of the façade consultant to advise on potential recovery of costs for remedial repairs and costs of disruption to residents.
If you would like to find out more information about how we can help you, please contact Andrew Lancaster. To find out more about the work that we do at Anthony Collins Solicitors, please visit our website.
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