The UK’s biggest contractor is engaged in a drawn-out £34.4m legal case over defects at a London student accommodation site it completed in 2009.
Balfour Beatty has denied allegations it was responsible for “significant defects” on the six-storey Hive building in Bethnal Green, according to court documents seen by Construction News.
The claimant, which owns the building, Hive Bethnal Green Ltd (HBGL), blamed Balfour Beatty for fire safety issues and internal water ingress, which it said caused it to “suffer loss and damage”.
HBGL decanted the site’s residents before the 2023/24 academic year, and expects it to stay empty until at least April 2026.
It estimated that the disruption and remediation will cost it £34.4m – almost three times the £12m it initially sought in 2021.
HBGL added that “the likely cost… may prove significantly more than this”, as the full scope of remediation works “remains uncertain”.
But Balfour Beatty said many of HBGL’s claims were “vague [and] unparticularised”. The contractor also said that it used materials that met safety standards at the time.
Balfour Beatty subsidiary Mansell Construction (now Balfour Beatty Regional Construction) was contracted by developer JG Colt to design and construct the 22-metre tall site for £15.2m in 2008, completing work in 2009.
But the claimant said it started to find faults in the Hive following completion. In particular, it flagged fire safety defects on the facade and substantial water ingress.
HBGL accused Balfour Beatty of “fail[ing] to exercise reasonable skill and care in its design of the works”, in breach of its JCT design-and-build contract.
The contractor is also accused of breaching the Defective Premises Act 1972, and causing “numerous defects” on the high-rise site.
HBGL said that it found facade defects in 20 different places on the site. Balfour Beatty used Eternit and Standard Trespa rainscreen cladding panels – HBGL claimed that the latter would not have been allowed by a “reasonably competent designer”.
The claimant said that the Trespa panels did not comply with the Building Regulations of the time.
HBGL also said some cavity barriers were missing and that others were installed “inadequately”. The “ineffective” cavity barriers could “provid[e] an unhindered route for fire and smoke spread”, it said.
It also said that Balfour Beatty was responsible for the design and installation of a faulty ventilation system and for “widespread” water ingress across the site.
In addition, HBGL said that fire doors in the Hive had not been installed in accordance with industry standards or “good industry practice”.
And the provision of passive fire protection within the building “has not been carried out in accordance with the Building Regulations”, it added.
HBGL said the defects caused it to “suffer loss and damage”, and that remediation will take around 18 months in total.
It added that the defects will cause it a “significant loss of rental income”.
The £34.4m claim includes the remediation works, design consultant costs and the impact on its rental income. HBGL is also claiming interest of 8 per cent per year.
‘A dump of photographs’
Balfour Beatty has denied liability for the defects, saying the case had been “asserted principally in generalised and global terms, of alleged groups of defects”.
It added: “The nature, extent and totality of the case is not articulated or understood.”
The contractor said HBGL’s evidence was nothing more than “a dump of photographs”, which were neither annotated nor clearly linked to assertions made in the particulars of claim.
Balfour Beatty also denied any “material workmanship defects” on its part, saying that the Standard Trespa cladding panels did meet building regulations.
It added: “HBGL does not assert a systemic failure for all panels. Instead, it asserts vaguely that Standard Trespa Panels were used inconsistently.”
Balfour Beatty also said that the project’s architect Broadway Malyan was responsible for design omissions in the cavity barriers. Its defence document also mentioned it had launched court proceedings against that firm over the cavity barriers issue.
The contractor said the passive fire protection claim was “unparticularised” and it also denied the claim about the fire doors.
“There appears to be no criticism of the doors themselves,” it said. “Instead, the allegations appear to be limited to asserted gaps around door frames.”
In addition, Balfour Beatty pushed back against the water ingress claim, as the first complaint was made 12 years after site completion of the Hive.
It said it was “not responsible for the maintenance of the Hive, nor for any failure to maintain the Hive”.
The contractor also said plans to decant the building were “neither necessary nor reasonable”, and were not caused by Balfour Beatty.
HBGL had also not “fully articulated” its case to justify the size of its £34.4m claim, Balfour Beatty’s defence document added.
The claimant said Kier was appointed in September 2023 under a preconstruction services agreement (PCSA) to develop an internal and external remedial works scheme for the Hive, at a total cost to date of £959,000.
“Costs continue to be incurred under the PCSA, and further particulars will be provided as and when any such further costs become known,” HBGL said.
But Balfour Beatty said that HBGL “acted unreasonably” by appointing Kier “in a non-competitive environment” without a competitive tender.
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Joshua Stein