Construction litigation specialist launches class action

Four suppliers were affected by concerns about steel mesh strength this year.

A specialist construction litigation law firm is hoping to deliver financial compensation to the owners of recently-built buildings, with a new class action suit.

Adina Thorn is inviting registrations of interest for what it expects to be a fully-funded class action on behalf of the owners of buildings that have been built in the past four years with steel reinforcing mesh that does not meet earthquake standards.

The mesh is used in multi-storey buildings to make them more resilient in an earthquake.

It is meant to be able to stretch by at least 10 per cent. The standard was increased from 2 per cent after the Christchurch earthquake. Lack of stretch was a reason the CTV building collapsed.

Adina Thorn, principal of the firm, said the Ministry of Business, Innovation and Employment investigation under way might result in fines for the companies that supplied the non-complying mesh, but would not likely deliver any financial reinstatement for the owners of affected buildings.

“This is a problem because, in the advent of a natural disaster, the use of non-complying steel mesh could compromise insurance claims, pose a risk to life and cause widespread financial losses. Its existence could also affect the future and present market value of the buildings concerned.”

She said the issue emerged in March this year when it was revealed that hundreds of thousands of non-complying steel mesh sheets had been supplied to builders throughout New Zealand from mid-2012.

The Ministry then said it was investigating companies that had supplied steel reinforcing mesh to builders and construction firms that did not meet the grade 500E requirement, which relates to the ductility or flexibility of the steel concerned.

One supplier, NZX-Listed New Zealand Steel & Tube, is being investigated by the Commerce Commission for making claims that its products had been certified as complying with standard 500E by using the logo of an independent testing laboratory, which had in fact not tested or certified the product.

It put supplies on hold in April. Importers Euro Corp and Brilliance Steel also failed tests.

Thorn said a number of other companies might also named in the proposed class action. Four had supplies of the product put on hold earlier in the year.

Thorn said the proposed class action was to be funded by funds managed by London-based Harbour Litigation Funding, the UK’s largest litigation funder. Harbour is also funding the current $250 million class action against the James Hardie group of companies in respect of plaster cladding products. This action is also being led by Adina Thorn Lawyers.

The existence of funding means owners of affected buildings can join the class action without incurring any out-of-pocket expenses, as Harbour will cover legal, expert, research, litigation, communication and administration costs, in return for a share of any proceeds recovered in the action.

The website to register is www.steelclassaction.co.nz

The class action will proceed if there is sufficient interest from owners with viable claims.

Steel & Tube has been approached for comment.

For more information visit the source link below.