Out of the frying pan and into the fire: replacement of non-compliant cladding products

Following the 2014 Lacrosse fire in Victoria's Docklands and the tragic fire in London's Grenfell Tower in 2017, sharp focus has been brought to bear on the use of flammable cladding on the external façade of Australian buildings. This has led to widespread removal and replacement of non-compliant cladding. Much of the rectification work has involved replacing non-compliant products with aluminium 'honeycomb' panels.

Last week, fresh concerns have emerged in the UK about whether or not 'honeycomb' aluminium products may also be non-compliant.

In this update, Special Counsel Natasha Stojanovich and Consultant Rohan Bennett address the legal ramifications, for construction professionals using non-compliant or hazardous cladding in rectification work.

The use of honeycomb panels

Since the 2014 Lacrosse fire, numerous buildings across the country have had their external cladding removed and replaced with an alternative product. A commonly used replacement has been aluminium honeycomb panels. These panels consist of two thin layers of aluminium sandwiching together another corrugated layer of aluminium, with the assembly held together with a thin layer of glue.

In November of last year, the Australian Financial Review reported that the aluminium honeycomb product Vitracore G2, whilst deemed compliant under the BCA, was said to have burned so fast that a CSIRO fire safety test of the product had to be aborted. These test results were disputed by the product's manufacture and supplier.

Last week, fresh reports emerged from the UK that the use of an aluminium honeycomb product being widely used in replacement work had failed the relevant British façade test. Notably, the product manufacturer has vigorously disputed the validity of test results and is firm in its position that its product is safe and complies with relevant safety standards in the UK and Australia.

The legal issues

The controversy about whether a product being used extensively in rectification work which may be compliant but dangerous creates a quandary for building owners, designers, and other consultants such as certifiers.

Post Lacrosse, the regulatory landscape has been in a state of flux. Amongst other changes, we have seen amendment to the BCA with respect to bonded laminate products, the introduction of an Australian Standard (AS5113) for full façade fire testing and, more recently in Victoria, the introduction of Ministerial Guideline 14 (banning certain aluminium composite panels). There have also been conflicting reports about whether many aluminium cladding products available on the market comply with AS5113, given that molten aluminium may cause a product to fail AS5113's debris criteria.

There are two key legal considerations for building and construction professionals faced with a dilemma about whether a product complies or is potentially hazardous. More specifically, whether or not they have:

1. Adequately discharged their professional obligations by using a product which complies with the BCA's DTS requirements, but is, according to certain reports, hazardous? If not, will they face exposure in the event that the building is damaged by fire, or injury / loss of life results?
2. A duty to warn their client (or potentially third parties) about the risks associated with the use such a product, either during construction or post completion?

Building and construction professionals should be aware that they may face legal liability in the future if they fail to act in a reasonably competent manner, or perform their professional services with due care and skill.

Where to from here for construction professionals?

Importantly, a professional's obligations may extend beyond merely complying with the bare legal requirements. For example, a professional may be held to a higher standard as a result of their tortious duties or contractual terms that they have agreed to, for instance, a term requiring the design to be fit for purpose. This may be more onerous than simply ensuring that a product compiles with the deemed to satisfy requirements of the BCA.

Where a professional knows about panels which may be non-compliant or pose a danger, they should be aware that:

1. Their professional and contractual obligations may impose a higher obligation than bare compliance with relevant legal or regulatory requirements.
2. Using products which comply with the BCA may not absolve them of any liability for a claim or claims in the future, in the event that they were aware of a risk and did not take reasonable and appropriate steps to either warn of or mitigate the potential risk.

Professionals should also consider whether they are aware of circumstances which might give rise to a claim in the future and, if so, they need to notify their professional indemnity insurer. This is particularly important in circumstances where cladding related exclusions are now routinely being applied to professional indemnity policies upon renewal.

AUTHORS NOTE: the authors express no opinion on whether the Vitracore G2 product, or other aluminium honeycomb products are compliant or pose a safety hazard.

Thanks to Lander & Rogers winter clerk Scott Coffey for his research assistance with this article.