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Construction firm McLaughlin & Harvey in settlement over £10m Royal Victoria Hospital critical care unit bill

By Alan Erwin

Published 06/04/2016

A construction firm has settled its legal action over being denied insurance cover for a £10m bill to fix pipework at Northern Ireland's new critical care unit
A construction firm has settled its legal action over being denied insurance cover for a £10m bill to fix pipework at Northern Ireland's new critical care unit

A construction firm has settled its legal action over being denied insurance cover for a £10m bill to fix pipework at Northern Ireland's new critical care unit.

The confidential resolution to McLaughlin & Harvey's lawsuit was confirmed on the second day of a High Court hearing.

The contractor had sued lead insurers Allianz in a bid to be covered by a policy it took out for the project at the Royal Victoria Hospital site in Belfast.

A judge was previously told it had been left to pay for problems for which it was not responsible at the state-of-the-art building.

Opening of the unit was hit by delays amid issues with the pipes identified up to four years ago.

Central to the legal battle was a dispute about the terms of a Contractors' All Risks (CAR) policy.

McLaughlin & Harvey and subcontractor Vaughan Engineering Services both claimed they should be covered. The two companies were also involved in a separate action linked to the same case.

Counsel for McLaughlin & Harvey said the firm had spent more than £9.8m of its own money rectifying problems.

The policy premium cost McLaughlin & Harvey around £600,000, said its counsel. He contended its clauses covered repairs as well as replacement. One potential issue centred on any exclusion from indemnification for damage caused by wear and tear, rusting or gradual deterioration.

But after out of court discussions Mr Justice Deeny was told a confidential settlement to the action had been reached.

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