US firm ends sales of flammable panels as lawsuits loom

Emergency services workers inside the burnt remains of the Grenfell apartment tower in London last week. Lawyers say that Arconic, the American company that sold the cladding for the building, could face lawsuits on both sides of the Atlantic over it
Emergency services workers inside the burnt remains of the Grenfell apartment tower in London last week. Lawyers say that Arconic, the American company that sold the cladding for the building, could face lawsuits on both sides of the Atlantic over its role in the fire, including claims brought by victims and their families.PHOTO: REUTERS

NEW YORK • The American company Arconic says it will stop global sales of plastic-filled aluminium cladding panels for use in high-rise buildings after a fire in London's Grenfell Tower, which used those panels, killed at least 79 people.

Lawyers say Arconic could face lawsuits on both sides of the Atlantic over its role in the fire, including claims brought by victims and their families, although the extent of its legal liabilities is not clear.

Announcing the end of sales of the panels for tall buildings, Arconic cited "inconsistencies in building codes around the world" and code compliance issues that have arisen concerning use of cladding systems as a result of the Grenfell Tower fire.

Shares of the company fell as much as 11.3 per cent after it was reported last Saturday that it had supplied the cladding knowing it would be used at Grenfell Tower, despite warning in its brochures that those specific panels were a fire risk for tall buildings.

The British authorities have said the use of the panels at Grenfell Tower was in breach of the country's building regulations. Arconic has declined to comment on whether the material met British building regulations, saying it was for local contractors and officials to decide whether or not its materials were suitable and consistent with local regulations. Other companies involved in the refurbishment of the building in which the Arconic cladding material was fitted said they complied with all local rules.

Nonetheless, Arconic advised in one brochure seen by Reuters that combustible cladding materials were a fire risk in tall buildings and that, above 30m, non-combustible materials should be used. Its polyethylene panel material is combustible and Grenfell Tower is more than 60m high.

"The issue is they supplied material that was used above their own marketing material's suggested limit," said Seaport Global Securities analyst Josh Sullivan.

Lawyers said that since most of the companies involved in work at Grenfell Tower were small, plaintiffs are likely to pursue Arconic as the only deep-pocketed party. Claimants could also be attracted by the fact that damages settlements in the United States tend to be much bigger than those in Britain.

REUTERS

A version of this article appeared in the print edition of The Straits Times on June 28, 2017, with the headline 'US firm ends sales of flammable panels as lawsuits loom'. Print Edition | Subscribe