Kingspan settles in cladding compensation test case

Cladding manufacturer Kingspan has settled a court case that would have tested a new law extending the range of legal claims that contractors can make against cladding manufacturers, Construction News can reveal.Kingspan was among 11 companies facing claims totalling £70m from Shepherd Construction in a cladding dispute relating to a high-rise residential building in Colindale, north-west London.The claim against Kingspan was set to be the first time the courts considered action against a cladding manufacturer under a provision introduced via the new Building Safety Act (BSA).The provision – Section 149 of the BSA – allows parties suffering injury, damage or loss when dangerous cladding has been installed on a building to claw back money from cladding manufacturers.It states that, where cladding contributes to making a building unfit for living in, the party that supplied the cladding can be sued if it made a misleading statement about it, failed to comply with a product requirement or manufactured an “inherently defective” product.Shepherd had claimed that Kingspan knew or should have known that the cladding it supplied for its project, which included a type of cladding later used on Grenfell Tower, contravened building regulations.CN has seen legal documents confirming Kingspan agreed a settlement with Shepherd, meaning the boundaries of the law will not immediately be tested in court.James Morris from Mayer Brown, the firm representing Shepherd, told Construction News in May that a judgment in the case would have provided an indication of how courts might approach each actor’s share of responsibility for similar defective-cladding claims.He said: “Each case is slightly different and there are a number of different cladding systems available. However, a judgment regarding these common forms of cladding system may provide confidence to those in the industry who are contemplating claims regarding the same or similar systems against cladding manufacturers.“While it’s very fact-specific, any decision is likely to give a steer as to how a court will apportion liability between members of the professional team.”Shepherd also brought claims under existing contract and tort law, and under the Civil Liability (Contribution) Act 1978, against 10 other companies involved in the scheme, lawyers told CN.Court documents seen by CN in July showed that the contractor had received more than £45m in separate settlements at that point. How much each party paid out was not disclosed.A hearing in connection with the dispute, between Shepherd and underwriting firm Atrium, is still set to go ahead over 11 weeks in the Technology and Construction Court, starting on 7 October.The Colindale block, which is the focus of the cases, is part of a wider project called Capitol Way, completed in 2015.The block used two cladding systems featuring Kingspan products: Benchmark Karrier and Kooltherm K15.As a result of remedial works, the Colindale block was completed in March 2021 – nearly six years after the contractually agreed completion date of June 2015.Shepherd Construction’s claim against Kingspan and the other firms in 2021 attempted to retrieve parts of the cost of its remedial works and those caused by the resulting project delays.Shepherd Construction was sold to Wates in September 2015. Wates has not confirmed to CN whether it holds responsibility for its previous contracts.Kingspan declined to comment when contacted by CN.