Thursday 8 December 2016

Pyrite legal battle heads for early finish

Dearbhail McDonald Legal Editor

Published 21/09/2010 | 05:00

IT is on its way to becoming the longest running and most expensive court case in the history of the State.

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But there is hope on the horizon at last for hundreds of families in Dublin whose new homes have been blighted by cracks in their walls and floors, with a settlement expected within weeks.

Defects in up to 750 new homes in north Dublin allegedly caused by pyrite, a mineral that expands in the presence of moisture and oxygen, have prompted a marathon legal row between Seamus Ross -- one of the country's largest home builders -- and the Lagan Group owned by Northern Ireland brothers Terry and Michael Lagan.

The case has run for 146 days and the defence has not yet begun.

But the Irish Independent has learnt that the contentious litigation, which has cost an estimated €10m in legal fees to date, could be settled within weeks as the companies' insurers seek to call time on the spiralling legal costs.

Residents, many of whom have had to leave their homes because of the extensive damage caused by the defects, have long complained that the vast resources being used to prosecute and defend the civil action -- a legal bill that could exceed €20m if the case continues to run and is appealed to the Supreme Court -- should instead be used to fix their homes.

It is understood that Australian giant QBE, one of the world's largest international insurance and reinsurance groups, is anxious for the litigation to be brought to an end.

QBE wholly insures Lagan and is also one of a number of insurers involved with Menolly Homes, which is seeking to be indemnified by the Lagan Group for up to €60m from homeowners who are suing it.

The prospect of a settlement, which would see full remedial works carried out on the houses of hundreds of homeowners, also follows a stark warning by a senior judge that there are serious conflicts of evidence between the warring factions. Both sides tried to have each other's case struck out following a major dispute over the discovery (production) of thousands of key documents.

"The respective commercial reputations of the parties are at stake," warned High Court judge Mr Justice Paul Gilligan, who has presided over the litigation in the Commercial Court.

As the legal term drew to a close in July, Judge Gilligan, who has issued a ban on the identification of up to 30 more housing estates in Ireland that are allegedly affected by pyrite, urged the parties to consider the "commercial realities" of continuing the legal battle.

Four companies owned by Mr Ross, including Menolly Homes, are suing Irish Asphalt, Lagan Holdings and Lagan Construction, which supplied aggregate, or crushed rock, for the infill used in the houses.

Menolly claimed the cracking was caused by unacceptable levels of pyrite, also known as 'fool's gold', in the infill.

But this has been strenuously denied by the Lagan Group, which says the defects were caused by mundane factors related to design and work- manship.

Irish Independent

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