HB v Sto – Building Safety Act Claims Against Overseas Manufacturers Allowed to Proceed
The Technology and Construction Court (TCC) has handed down an important judgment in HB (Wm) Ltd & Others v Sto Ltd & Others [2026] EWHC 1833 (TCC), refusing an application by German-based defendants to set aside service out of the jurisdiction. While the decision is procedural in nature, it provides valuable early judicial guidance on the operation of sections 130 and 149 of the Building Safety Act 2022 (“BSA”), both of which remain relatively untested.
Background
The proceedings arise from claims brought by a number of major residential developers, including companies within the Barratt Redrow and Lendlease groups, seeking to recover the costs of remediating allegedly defective external wall systems installed on 18 high-rise residential buildings.
The remediation works followed investigations carried out after the Grenfell Tower fire and were initially funded through the Government’s Building Safety Fund. The developers contend that they ultimately remain liable for those costs under the Building Safety Act 2022 and seek to recover them from members of the Sto group.
The claims rely principally upon:
- section 149 of the Building Safety Act 2022 (liability relating to defective cladding products);
- section 130 of the Building Safety Act 2022 (Building Liability Orders); and
- the Civil Liability (Contribution) Act 1978.
The second and third defendants, both German companies, challenged the English court’s jurisdiction and sought to set aside permission to serve proceedings outside the jurisdiction.
The Court’s Decision
Mr Justice Moody dismissed the applications, concluding that the claimants had demonstrated a real, rather than fanciful, prospect of success. Importantly, the Court emphasised that applications challenging jurisdiction are not the appropriate forum for determining disputed factual issues or resolving novel points of statutory interpretation. The judgment reiterates that courts should avoid conducting “mini-trials” at this preliminary stage, particularly where the legislation under consideration is both recent and developing.
Section 149 – Liability for Defective Cladding Products
A significant aspect of the judgment concerns section 149 of the BSA, which creates a new statutory cause of action relating to defective cladding products. The claimants alleged that Sto Germany could be liable because it had:
- made misleading statements regarding the performance of its cladding systems;
- failed to comply with relevant cladding product requirements; and
- manufactured inherently defective cladding products.
The defendants disputed both the factual allegations and the legal interpretation of section 149. However, the Court held that these issues were unsuitable for determination on a jurisdiction challenge. Accepting the pleaded facts at face value, as required at this stage, the Court concluded that the section 149 claims were properly arguable and should proceed to trial.
Contribution Claims
The judgment also provides useful commentary on contribution claims under the Civil Liability (Contribution) Act 1978. The defendants argued that contribution claims could not proceed because liability had not yet fully crystallised. The Court rejected that argument, relying upon the Supreme Court’s decision in BDW Trading Ltd v URS Corporation Ltd, observing that contribution claims may properly be pursued before the final determination of underlying liability where doing so promotes procedural efficiency and avoids multiple sets of proceedings.
Building Liability Orders and Overseas Defendants
The defendants further argued that Building Liability Orders under section 130 of the BSA should not apply to foreign companies because this would amount to an impermissible extraterritorial application of the legislation. The Court rejected that submission at this stage. Rather than treating extraterritoriality as a standalone barrier, the Court held that the correct starting point is an orthodox applicable law analysis. Given the pleaded facts, the claimants had a realistic prospect of establishing that English law governed the relevant liabilities, allowing the claims against the overseas entities to proceed.
Why the Judgment Matters
Although the decision does not determine liability, it is one of the first substantial judicial considerations of sections 130 and 149 of the Building Safety Act 2022. The judgment demonstrates the Court’s reluctance to dispose of Building Safety Act claims at an early procedural stage, particularly where the legislation remains in its infancy. It also confirms that claims against overseas manufacturers and associated corporate entities will not necessarily be prevented merely because those entities are domiciled outside England and Wales. For developers, contractors, manufacturers and their insurers, the case provides an important indication that the courts are prepared to allow novel Building Safety Act claims to proceed to trial where they are properly arguable.
How CCC Can Help
Building safety disputes frequently involve complex issues relating to defective design, cladding systems, product liability, remediation costs, contribution claims and the evolving provisions of the Building Safety Act 2022. At Contract & Construction Consultants (CCC), our dispute resolution team advises developers, contractors, subcontractors and construction professionals on a wide range of construction disputes. Whether pursuing or defending claims arising from building safety defects, defective workmanship or contractual liabilities, our specialists provide practical, commercially focused advice tailored to the particular circumstances of each project.
