Titanic legal struggle gave homeowners sinking feeling

ANALYSIS:IT WAS a scene more appropriate to the last hours of the Titanic or the final days of the Roman Empire: two giant construction companies slugging it out in court day after day, while the construction industry across the country virtually ground to a halt.

For almost two years, lawyers for Menolly Homes, owned by developer Seamus Ross, and the Lagan group of companies have been blaming each other for defects which arose in hundreds of north Dublin homes.

Between them, the parties engaged six expensive senior counsel and scores of junior barristers for the case, which has moved at a snail’s pace in a division of the Commercial Court.

At one point, after 50,000 new documents surfaced, the two sides hired over 30 extra barristers to sift through them. Scores of technical experts were hired to come to Ireland to give evidence, and test models were used to try to show what caused swelling and cracking in affected houses.

At 150 days, the case is almost twice as long as the 87 days DCC and Fyffes spent in the High Court. Though shorter than the 277 days recorded in the Bula vs Tara Mines case in the 1990s it is, as Mr Justice Paul Gilligan noted yesterday, probably the most expensive court case in Irish legal history. One source close to the case last night estimated total costs at €60 million.

Against the backdrop of the declining economy, the case grew to appear increasingly surreal. It has had the effect of preventing cases taken by hundreds of homeowners from proceeding, consigning those most directly affected to a continuing limbo which might have lasted for years.

Their lawyers argued this year that the resources being spent in court would be better used to repair the houses. Behind this lay a fear that even if they won their cases, there might be no funds left for repairs. “There was a fear that any victory by the homeowners would end up a pyrrhic victory,” said David Coleman, of Lavelle Coleman solicitors, representing 200 householders.

At the time, Mr Justice Gilligan refused to allow the homeowners’ cases to proceed, but their pleas clearly struck a chord.

Last July, the judge urged the parties in the strongest fashion to work towards a mediated solution. Former Bar Council chairman Turlough O’Donnell was brought in to act as a mediator and appears to have brokered an agreeable settlement.

More than 500 homeowners are likely to benefit from the proposed deal. They include 400 houses under scrutiny in the current cases, and another hundred in the Beaupark estate built by another of Ross’s companies, Killoe Developments.

That still leaves hundreds of homeowners who claim their houses have suffered defects as a result of the presence of pyrite, which swells when in contact with water. Many of these are pursuing claims through their solicitors.

Yesterday’s settlement appears to have won favour with the homeowners. Coleman said it would provide certainty and fairness for his clients. The value of the fund was not disclosed, but at an average of €100,000 per house, it may be over €40 million.

The money will be used to remedy defects in the houses, either by removing the pyrite, or treating it. Homeowners will be looking for expenses for suffering and inconvenience caused, and a warranty on works carried out.