In a previous article, we looked at the UK government’s intention to make cladding manufacturers contribute to the remedial costs of buildings with unsafe cladding. Now, Michael Gove has looked to garner the support of the manufacturers’ investors to make sure that they pay up.

In his latest in a series of correspondence to industry stakeholders, Michael Gove MP, the UK Secretary of State for Housing, Communities and Local Government, has appealed to the institutional investors of three major cladding manufacturing companies, Kingspan, Arconic and Saint-Gobain. This includes companies such as BlackRock, Vanguard and Fidelity Management and Research.

Mr Gove previously confirmed that he would be looking to recover a “significant proportion” of the remediation costs that will be required from the cladding sector.

Last month, Mr Gove wrote to the three companies directly, inviting them to meet department officials. That followed an acknowledgement by one of the cladding companies that it would pay for remediation where products had been used inappropriately.

The companies have, however, now missed the government’s end-of-March deadline for a public funding commitment.

In light of this, Mr Gove has taken a change of tack - indirectly piling pressure on the companies via their shareholders by appealing to them in their role as “responsible investors”.

Mr Gove has told the investors that he wants the manufacturing companies to “do the right thing” and come forward with a comprehensive financial package to fix unsafe buildings.

The letters also contained a veiled threat to the manufacturing companies themselves, noting that they will face “severe consequences”, with Mr Gove vowing to use “all commercial and legal tools available” to ensure they take responsibility. Where swift action was not taken by the companies, Mr Gove promised that the focus of his government department would be “trained upon them”.

Meanwhile, the government also maintained its focus on other potential contributors. It was confirmed last week that the Developer Remediation Contract, intended to ensure that developers take financial responsibility for the remediation of fire-safety defects, currently has 46 signatories. The government further confirmed that it had ramped up litigation against “irresponsible freeholders who will not remediate buildings they are responsible for”.

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Lucy McCracken

Senior Solicitor

Eric Johnstone

Legal Director

Louise Shiels

Head of Dispute Resolution and Risk & Partner