Almost a decade after the Grenfell Tower fire killed 72 people, almost 100 building safety lawsuits worth over £1 billion are working their way through London's High Court. Developers, builders, architects and material manufacturers are all suing one another over the cost of fixing unsafe building exteriors and other similar defects that the Grenfell incident had exposed.

Big housebuilders in the UK are being caught up in this wave of litigation. One particular example is Bristol’s Eclipse Tower, which had similar unsafe cladding to Grenfell Tower, and was developed by Bristol Alliance. Bristol Alliance paid £19 million for remedial work to be done, but then sued the building contractors, who in turn sued architects/subcontractors.

Analysis

This story shows how the Grenfell tragedy can rewrite the legal obligations binding an entire industry - construction in this case. For decades prior, what building developers would do is build their projects through a separate company known as a special purpose vehicle (a company set up to do one particular job). Once the project was complete, the special purpose vehicle would be wound down / disbanded to basically protect the developer from any future legal issues.

This legal loophole has been closed by the Building Safety Act, which allows courts to hold developers responsible for mistakes made even though the project was completed through a separate company - this Act was brought in as a direct response to the Grenfell incident.

What does this mean for the sector?

• Companies now potentially face liability for work they had done decades ago

• Firms that had once relied on special purpose vehicles / shell companies will need to rethink how future projects are structured to avoid liability tracking back to them

• By putting pressure on construction firms and potentially pushing some of them into insolvency, housebuilding capacity is reduced at a time when the UK badly needs more homes