The Technology & Construction Court (TCC) recently gave judgment in Mulalley & Co. Limited v Sto Limited and Sto SE & Co. KGaA [2026] EWHC 1552 (TCC).
The significance of the judgment lies in the guidance it provides on the court’s approach to Building Liability Orders (“BLOs”) under the Building Safety Act 2022 (BSA), and to apportionment of liability in contribution proceedings between parties in the supply chain for defective construction and cladding products.
The claimant, Mullaley, was engaged in December 2006 by Chelmer Housing Partnership Limited (“Chelmer”), to demolish an existing property, design and build a new development of residential flats, and refurbish a residential tower block.
These works included the design and installation of external cladding that was intended to act as a fire prevention barrier. The cladding was supplied to Mulalley by UK-based Sto Limited.
Following the Grenfell Tower fire in June 2017, Chelmer identified that the cladding system was defective. Mulalley agreed to remove and replace the defective cladding and pay compensation to Chelmer.
In turn, Mulalley sought to recover from Sto its costs, expenses and payments of compensation to Chelmer.
Mulalley’s claim against Sto was brought under the Civil Liability (Contribution) Act 1978 (“the Contribution Act”) on the basis that Sto was liable to Chelmer under s.149 of the BSA, in respect of the same damage.
Sto Limited went into administration and so Mulalley also pursued a claim against Sto’s German parent company, Sto SE & Co. KGaA (“Sto Germany”) for a Building Liability Order, pursuant to s.130 BSA.
Sto Germany failed to defend the claim and default judgment was entered.
The court still had to assess damages and decide on an appropriate apportionment of liability between Mulalley (as main contractor for the works) and Sto (as supplier of the defective cladding).
This involved an assessment by the court, pursuant to s.2(1) of the Contribution Act, of what contribution it considered to be “just and equitable having regard to the extent of that person’s responsibility for the damage in question”.
The court took into account that:
The court found that the principal cause of the remedial works was that Sto marketed and supplied an inherently defective product, and it concluded that the just and equitable contribution payable by Sto was 87.5%.
This could be recovered from Sto Germany by reason of the Building Liability Order Mulalley had obtained against it.
The BSA was introduced following the Grenfell disaster, with the intention of improving regulation and building safety and, among other things, ensuring that liability should ultimately rest with those parties responsible for defective construction and cladding products.
This decision demonstrates the courts’ willingness to give effect to the intention behind the BSA, and how effective the provisions of the BSA can be, even (as here) enabling a party to recover from a supplier’s parent company based out of jurisdiction, by reason of a Building Liability Order.
The decision also offers an insight into how the courts will approach considerations of what is “just and equitable” for the purposes of assessing each party’s respective responsibility under the Contribution Act, for damage caused.
The indication is that the courts will be very willing to find that the manufacturer and/or supplier of a defective construction or cladding product should bear by far the greater share of responsibility in appropriate circumstances.
An increasing number of claims are being brought under the BSA, and manufacturers and suppliers of construction and cladding products, and their insurers, should take note of this trend when assessing their potential exposure.
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