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Hotel cladding disputes revealed

18 May 2020

A SERIES of hotel chains are engaged in legal claims against contractors over combustible cladding, specifically aluminium composite material (ACM) cladding similar to that used on Grenfell Tower.

Construction News reported on ‘multi-million-pound cladding disputes’ between ‘well-known hotel chains’ and ‘high-profile building contractors’, after Grenfell ‘laid bare the dangers of combustible cladding’. The disputes ‘have been raging for years’ and are ‘worth millions of pounds’, as the combustibles ban for buildings 18m or higher ‘largely left hotels out of the picture’.

It applied to residential buildings, hospitals, care homes and student accommodation in England, but hotels ‘were not subject’, though ‘this situation is about to change’ as the Ministry for Housing, Communities and Local Government (MHCLG) ‘proposed significant revisions’ and found ‘fresh evidence’ that hotels ‘should be included’.

Several recent fires in hotels ‘raised concerns that [they] should fall within the scope’, MHCLG having commissioned a seven year study that found hotels ‘were more dangerous than flats at all heights below’ 18m - more people were ‘injured or killed in hotel fires’ between October 2011 and September 2018 than in flats or apartments.

This was ‘buried at the back’ of an earlier consultation that had not recommended changes, and noted that ‘initial logic’ for excluding hotels was ‘an assumption that risks were low’, because of buildings being staffed overnight, having multiple escape routes and emergency lighting, no stay put policies and ‘high levels of fire detection and alarm systems’.

Professor Richard Hull of the University of Central Lancashire questioned the ‘wisdom’ of this, as hotels house people ‘more likely to be disorientated, and possibly drunk’, and thus vulnerable in an evacuation - ‘you know your home and your way around it, but in a hotel, you probably used the lift, and don’t even know where the stairs are. You’re reliant on signs – if you remember to look out for them – to tell you which way to go’.

MHCLG expects all high rises with unsafe cladding to have it removed and replaced ‘as quickly as possible’, and identified 30 hotels clad in ACM ‘and is in touch with all of them to monitor their progress’ – however approaches ‘have differed’, Premier Inn having funded ‘at least’ three removals, asking a court ‘to decide how much the original contractor should reimburse it’.

Having reviewed all properties in the weeks after Grenfell ‘to see what materials were used’, and to remove anything ‘deemed non-compliant’, it said last year that all its buildings were ‘entirely and unequivocally safe to operate’, but that it was undertaking work ‘voluntarily […] nonetheless’, with internal firestopping and evacuation procedures ‘sufficient’.

In three cases it asked contractor McAleer & Rushe (M&R) to fund works, and when this was declined Premier Inn ‘initially’ funded works, both sides agreeing courts would ‘determine financial responsibility’. ACM was removed from hotels in Woking, Brentford and at Gatwick Airport’s North Terminal, the latter requiring the company to hire a security watchman for £80,000 to ‘deal with fire risks until the remedial works were complete’.

It is seeking £3.5m from the contractor, M&R itself suing subcontractors; while in Brentford Premier Inn seeks £1.8m and £1.3m in Woking. Its Heathrow Airport Terminal Four hotel saw a claim against developer AP14 and contractor S&T UK in September 2018, settled last September with no record of whether remediation ‘took place prior’.

Travelodge meanwhile ‘sought to claim money before beginning remediation in two cases’ – the first against M&R over a Milton Keynes hotel’s ACM and a ‘range of alleged fire-safety defects’ including firestopping and cavity barriers. This was settled in February ‘around the time’ remediation work was approved, while it also sued Balfour Beatty (BB) for £800,000 over a Swansea hotel – built by Cowlin Construction in 2006 prior to being acquired by BB.

The chain alleged the building contains zinc alloy panels installed in front of combustible foam insulation and sitting alongside timber cladding ‘installed without a fire-retardant coating’, and that cavity barriers ‘were not correctly installed in several places’, but BB is contesting the claim - both hotels ‘continued to operate after’ defects were identified.

Law firm Gowling GLG’s Sue Ryan said that it ‘won’t make much of a difference in court’ if a firm chases a contractor for funds before fixing ‘alleged defects’ and then seeking to ‘recoup costs’. She added that ‘there is the perception that the judge is likely to be more generous when the money has actually been incurred, but as long as he or she is satisfied that the works will be undertaken and the costs will be incurred then they will assess damages in the same way in each case’.

Each would ‘hinge’ on whether companies can demonstrate cladding did not meet Approved Document B of the Building Regulations (ADB), and ‘ultimately, this will turn on expert evidence on a case-by-case basis. If the judge in each case considers that the requirements of [ADB] have not been met, then this will be a breach of the relevant building contract’.

Professor Hull added that post Grenfell MHCLG surveyed 328 ACM clad residential buildings taller than 18m, finding 316 ‘non-compliant’ and none ‘fully compliant’: ‘Given that there were so many buildings with polyethylene-filled ACM and combustible insulation in the UK which, by implication, [the Grenfell inquiry] deemed non-compliant, and there were no buildings identified which would have been deemed compliant, that tells you that there was some massive gap between the building regulations and [ADB].

‘You don’t usually succeed when you sue the government, but I do think in many ways they’re the people these companies ought to be addressing. If [ADB] was correct, the fact that nobody followed it suggests, at the least, the communication from the regulators was at fault.’

MHCLG stated: ‘The government is bringing about the biggest change in building safety for a generation and our priority is to ensure people’s safety. We expect all high-rise buildings with unsafe cladding, including hotels, to be remediated as quickly as possible. We are in touch with all hotels identified as having unsafe ACM cladding, and are monitoring progress closely.’

Premier Inn said its hotels are ‘entirely and unequivocally safe to operate – irrespective of the exterior cladding’, adding: ‘Although our hotels have been independently assessed as entirely safe to operate irrespective of the cladding used, we nonetheless took the voluntary decision to replace it and have been working with the relevant local authorities, contractors, developers and landlords to do so.

‘Given the unprecedented context including the time that’s needed to test for appropriate replacements, and the shortage of cladding nationally, this is a complicated issue. We’re committed to ensuring that cladding is replaced as fast as possible where it is necessary to do so, and most of our affected hotels have been successfully reclad.’

M&R said ‘the safety and security of all our projects remains paramount within our business’, while BB said its ‘primary concern’ is the safety of its staff and the public, and that it is working with Travelodge to ‘review the fire-safety systems in place’ in Swansea: ‘We can confirm that the building remains safe for occupation as we undertake this review. We continue to work with all parties to reach an appropriate outcome for any required remedial works.’

Travelodge commented that ‘the safety of our guests and team members is our highest priority and our independent fire safety experts have confirmed that all of our hotels are safe to operate’. FPA managing director Jonathan O’Neill added: ‘In normal times, most hotels need occupancy rates of between 50-100 per cent to be financially viable. One that’s burnt to the ground is going to have an occupancy rate which is zero; it’s not rocket science.’

Hotel cladding disputes revealed