Morgan Sindall wins first round in £7.5m Amec legal row

Aaron Morby 8 years ago

Morgan Sindall has won the first round in a legal battle with Amec over a £16m Liverpool hotel project completed nine years ago.

Cladding needed to be replaced on the Malmasion project after screws fixing cladding  panels rusted
Cladding needed to be replaced on the Malmasion project after screws fixing cladding panels rusted

The court case covers the cost of rectifying defects on the Malmaison hotel and apartment project, the most serious coming to light when a cladding panel fell from the hotel in November 2008.

Amec won the contract to build the complex in 2005, but Morgan Sindall became embroiled in the project as part of a deal to buy its rival’s construction business back in 2007.

Under the terms of the takeover deal, Amec paid Morgan Sindall £44m to take on the construction business, which had estimated liabilities in the order of £100m.

Several contracts underway at that time were not novated over, but Morgan Sindall agreed to complete them and discharge Amec’s liability until a defects liability certificate was issued.

While Amec largely built the Malmaison Hotel and Apartments project on Liverpool’s historic Princes Dock, Morgan Sindall assumed responsibility for the unfinished project as one of these contracts.

The building’s entire cladding had to be replaced later when it was revealed that Amec had used screws that rusted in sea air to originally fix cladding panels.

Amec is suing Morgan Sindall to recover a claimed £7.5m in costs incurred paying to rectify serious defects.

But in a preliminary hearing seeking clarification on a series of complex legal issues around liability for the defects and when they first came to light, Justice Edwards-Stuart ruled that Morgan Sindall could not be held responsible for problems that arose after the 12-month defects liability period, which expired in June 2008.

The main court case will now resume.

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