- Strike out application partially successful in section 2 Buildmark Cover dispute (National House Building Council v Vascroft Contractors Ltd)
- What are the practical implications of this case?
- What was the background?
- What did the court decide?
- Case details
Construction analysis: National House Building Council (NHBC) brought a claim against Vascroft Contractors Ltd (‘Vascroft’) to recover payments made to the owner of a property (the ‘Property’) under section 2 of the Buildmark Cover scheme. Vascroft had undertaken allegedly defective basement extension works, resulting in a claim against the NHBC policy. Section 2 provides that NHBC may pay out sums relating to defective building works to the property owner, and then recover these sums from the responsible contractor. In these proceedings, NHBC sought to strike out parts of Vascroft’s defence. Mrs Justice O’Farrell refused to do so, save for very limited grounds. Even NHBC’s limited success was tainted, for the NHBC, by the court’s permissive approach towards matters relevant to the ‘reasonableness’ of the sum paid out under section 2 of the Buildmark Cover. There are very few examples of NHBCs arrangements with its approved contractors having been tested in the courts and this decision may result in NHBC, and other warranty providers, becoming more cautious in their approach to compensating property owners for fear that the scope for recoverability from contractors is more complex than previously assumed. Written by Jennie Gillies, barrister at 4 Pump Court, and Katy Handley, pupil barrister at 4 Pump Court.
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