Omni Bridgeway Funds Two Class Actions on Combustible Cladding
It’s estimated that a class action in Australia may assist developers with their restoration and replacement costs. This case is expected to be the largest in the nation in 2021, as it involves more than 3400 apartment buildings now deemed unsafe. The Urban Developer explains that noted funder Omni Bridgeway is funding two class actions related to cladding. The issue itself—that the cladding was combustible--was discovered after fires in the Lacrosse building in Melbourne and at Grenfell Tower in London. Fatalities occurred, and the fires led to a rise in property insurance rates. In some cases, insurance has become elusive, if not impossible to get. Omni Bridgeway is funding all costs to run the two class actions, as well as covering exposure to costs. This non-recourse agreement means that claimants may participate in the action without paying a fee. The funder is also investigating multiple cladding manufacturers to determine if more are deemed to be combustible. Among those impacted are thousands of residents whose apartments are no longer habitable. Willoughby City Council has also joined a class action over a non-story performing arts hub that was declared unfit for purpose. While the opt-out deadline has passed, the open class action structure means anyone who qualifies can benefit from the action. The Alucobond cladding case may be worth several billion. The lead claimant here is listed as Shore Dolls Point building, located in Sydney. But the action will not be limited to Alucobond cladding or Vitrabond cladding—though the first class action is against Halifax Vogel Group and 3A Composites—both manufacturers of Alucobond. The second case is against manufacturers of Vitrabond products, Fairview Architectural. The compensation being sought is to cover cladding replacement and the associated costs. Losses may include improving fire safety protocols, covering the rise in premiums, and recouping the loss of property values.