The ruling marks one of the first major contribution claims under the Building Safety Act to reach judgment and underlines the financial risks facing product manufacturers linked to historic cladding defects.

The Technology and Construction Court heard that Mulalley had designed and built refurbishment works at the 54-flat Parkside Court tower in Chelmsford, including the installation of the StoTherm Classic cladding system.

Following the Grenfell Tower fire, defects were identified in the external wall system and Mulalley agreed in December 2022 to remove and replace the cladding and pay compensation to the building owner, Chelmer Housing Partnership.

Sto Limited entered administration in January 2025, prompting Mulalley to pursue a claim against parent company Sto SE & Co. KGaA under the Building Safety Act’s building liability order provisions.

The German company failed to defend the proceedings and judgment was entered in default.

Mulalley claimed more than £2.4m in losses. After reviewing the costs and stripping out unrelated remedial work and legal expenses, the court found that £2.03m had been reasonably incurred as a result of the defective cladding system.

Mr Justice Pepperall concluded that the “principal cause” of the remedial works was Sto’s marketing and supply of an “inherently defective product”. The judge ordered Sto Germany to pay 87.5% of Mulalley’s losses, equating to £1.77m plus interest.

The judge said Sto had failed to supply a product that complied with Building Regulations requirements and had made misleading statements about the StoTherm Classic system. He also found the system was inherently defective and had rendered the flats unfit for habitation.