Mace and client Sky have won a legal case against their insurers over a £56m bill to fix a problem roof on a building at the TV company’s headquarters.
Mace was the main contractor on Sky Central, built at the Sky Campus in Osterley, West London, from 2014 to 2016, which featured the largest timber flat roof in Europe.
The 16,000 square metre roof was made up of 472 individual wooden cassettes, but water entered and remained within “a substantial number” during construction.
This led to wetting of internal timbers and, Sky and Mace said, irreversible swelling and structural decay before the expiry of their insurance policy in July 2017.
Prater was the roofing subcontractor on the job, with B&K Structures supplying and installing the cassette system, which was manufactured by Rubner.
The cassettes were lifted onto the Sky Central roof using tower cranes, which were connected to each cassette by four or six lifting strops that had been attached during manufacture as an integral part of each cassette.
After the cassette had been lifted into place the strops were cut off using a Stanley knife, leaving holes in their temporary coating. They were left unsealed until the final roof sealing, apart from some tape used as temporary patches.
The court heard that following installation, the cassettes were left waiting for permanent waterproofing by Prater, and they were exposed for weeks or months to “substantial rainfall”.
No temporary roof structure was installed to protect the cassettes, and none had been specified as part of the roof design.
In August 2023 Sky and Mace lost a legal case arguing that they should have been indemnified for the cost of investigating the damage and future costs of remediating the roof. Mace estimated it spent around £10m on its investigations up to 2022.
Remediating the roof damage could cost up to £56m, the trial heard.
The Business and Property Court ruled last year that only Sky was covered by the policy because it was the main party insured, and Mace was listed as a third party.
That judge ruled that after practical completion, in July 2016, the contractor should no longer be covered. He also said Mace had not proven the damage it was claiming had taken place before practical completion.
The insurers also argued that Sky’s claim was limited because its insurance policy expired in July 2017, 12 months after practical completion, which the judge accepted.
Attempts to dry out the roof continued until 2019 and damage had increased in the period after the policy expired.
At the Court of Appeal this week, judge Mark Pelling overturned the case in favour of Mace and Sky.
He ruled that it should be covered because the “condition of the roof at the time of trial was wholly or very largely the natural and foreseeable consequence of the ingress of water during the [period covered by the policy]”.
Pelling added that “the cost of remedying the condition of the roof as it existed at the time of trial was not in any respect attributable to any failure on the part of Mace or Sky to act reasonably”.
He said that as the water ingress had mostly occurred during construction, Mace had demonstrated the roof’s issues were caused prior to practical completion.
Not identifying the precise damage at practical completion was not a bar to Mace’s claim, he ruled.
Sky UK and Mace made the claim against Riverstone Managing Agency and seven insurance companies.
The amount of money to be paid out in the case will be assessed by another judge.
Kate Fairhead, senior vice president, construction practice, UK & Ireland at insurance firm Marsh, which was not involved in the case, said: “The judgement is a clear win for policyholders and brings clarity around a number of highly pertinent, and typically contentious, issues for CAR, and property, insurance.
“It is early days to make such bold statements of new law having been established, but it certainly brings some useful shaping and clarification on how to approach the treatment of contract works claims.”
