Mulalley & Co v Sto: High Court awards 87.5% contribution for defective Grenfell-era cladding

Nearly a decade after Grenfell, the courts continue to grapple with how liability for the cladding scandal should be apportioned. The latest development comes from the Technology and Construction Court, where Mr Justice Pepperall has awarded Mulalley & Co Ltd £1,772,312.17 against Sto SE & Co. KGaA, the German parent of the now-insolvent British cladding supplier Sto Limited.

The case concerns Parkside Court, a residential tower block in Chelmsford, Essex. Mulalley had been engaged by Chelmer Housing Partnership to refurbish the site in 2006, subcontracting the external cladding works using the StoTherm Classic System. Following the Grenfell fire in June 2017, the cladding was identified as defective. In December 2022, Mulalley settled with Chelmer, agreeing to remove and replace the cladding and pay certain sums, and then sought to recover those costs from Sto.

With Sto Limited having entered administration in January 2025, Mulalley turned to section 130 of the Building Safety Act 2022, which permits the court to make a building liability order against an associated company. Waksman J entered default judgement against Sto Germany in December 2025, leaving Pepperall J to assess quantum.

The total costs incurred were assessed at £3,431,633.53 by chartered quantity surveyor Tom Taylor, following a detailed review of Mulalley's claimed figures. Not all of the remedial works related to the defective Sto system: the Sto render accounted for 85.83% of works to the external walls but only 69.03% of the overall development. Applying those percentages reduced the causally attributable costs to £2,086,826.65, with Mulalley's own counsel then conceding a further reduction to strip out settlement-related legal fees, bringing the final figure to £2,025,499.62.

The more instructive question was contribution. Section 2(1) of the Civil Liability (Contribution) Act 1978 directs the court to award whatever is just and equitable having regard to each party's responsibility for the damage. Mulalley argued for 90%, drawing an analogy with architect liability for design defects, where courts typically award contributions of 67% to 80%. Pepperall J accepted that analogy as the starting point but went further, fixing the contribution at 87.5%.

The reasoning warrants attention. This was not a case of negligent specification or inadequate professional oversight: Sto had marketed and supplied what the court found to be an inherently defective product. Its standard detail placed combustible insulation over the face of fire barriers, a configuration previously condemned in Martlet v. Mulalley [2022] EWHC 1813 as "fundamentally deficient." Sto's misleading statements about the system compounded its culpability. Where a manufacturer places a dangerous product into the construction chain and misrepresents its properties, courts will push the contribution beyond the range reserved for design professionals who failed to identify a problem rather than created one.

On costs, Mulalley's application for indemnity assessment was refused. Pepperall J found that Sto Germany's wholesale failure to engage and its non-payment of the £1,200,000 interim sum ordered by Waksman J did not take the case outside the norm. Standard basis assessment will follow, with £175,000 awarded on account.

Two broader points emerge. Building liability orders under section 130 have proven their worth: when the immediate counterparty is insolvent, they provide a viable route to a solvent entity within the same corporate group. This judgement also makes clear that contribution percentages for cladding manufacturers will not be confined to the band developed in architect cases. Where the product itself is the source of the danger, courts will price in that fundamental difference.