Osborne Property Services Ltd was awarded a contract to maintain the borough’s 12,5000 council homes from 2012 to 2019 but, last May, sued the council for £9.5million of unpaid fees.
Waltham Forest Council responded by countersuing Osborne for £2.2m and warned it was investigating thousands of fire doors installed by the company, after almost 300 were found to be less fire-resistant than promised.
Following the Grenfell tragedy, the council paid Osborne to install new fire doors in several council blocks, meant to withstand flames for up to an hour. However, it claims tests to 223 doors found they lasted only 31 to 45 minutes, while a further 75 doors failed to meet even the legally required 30-minute mark.
A trial was scheduled to take place next May but, earlier this month, council leaders agreed behind closed doors to settle with Osborne, after the company offered to pay them a multi-million pound settlement.
A council spokesperson said: “Osborne Property Services Limited began proceedings in the High Court against the [council] in May 2021 in relation to claims regarding a historic maintenance contract. The council lodged a defence and counterclaim and a mediation took place in May 2022.
“Both parties have agreed to end the litigation on commercial terms, and it has now concluded with no admission of liability by either party. We are unable to provide any further details of the settlement due to confidentiality obligations.”
Waltham Forest Council’s cabinet agreed to settle on 7th July. A report prepared for the meeting notes that refusing would mean “incurring the related legal costs” and “being liable to pay both parties costs” if the council lost the case.
Court documents obtained by the Local Democracy Reporting Service show that the council’s counterclaim warned Osborne it was “currently investigating” 5,850 fire doors installed by the company.
The document reads: “Insofar as these are found to be defective, [Waltham Forest] may seek to amend its claim in due course.”
At the time, Osborne denied any failures, insisting it “exercised reasonable skill and care in the choice of supplier and/or in the selection of doors”.
The company also insisted the council owed it £9.5million for repairs and maintenance because of a pricing change agreed with the council’s former arms-length management company, Ascham Homes, in 2012.
The council insisted Ascham Homes had “no authority to vary the contract” in this way. Ascham Homes was dissolved in 2015 after the council spent at least £7.6m bailing it out twice.
The council’s housing maintenance contract is currently with Morgan Sindall.
Following the original publication of this article, local blogger Nick Tiratsoo pointed out that the original tests that uncovered the doors’ defectiveness in 2019 were only performed on a sample of three doors. It is unclear whether the council has performed further tests since this time.