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Northern Bear PLC on Friday said its subsidiary Springs Roofing Ltd has reached a £600,000 settlement in a respect of a legal claim made by Engie Regeneration Ltd.
Back in December, the Newcastle-based building services firm said its subsidiary had been served a notice of formal court proceedings regarding a claim by Engie for £1.9 million. The claim related to roofing work undertaken over a two-year period from April 2009 to March 2011 on eight separate care home properties.
Northern Bear said that Engie employed Springs to re-roof eight of its properties, as it was experiencing performance issues with various aspects of its buildings. Springs' directors believe the performance issues were caused by problems with the design of the buildings for which Springs had no responsibility.
However, the re-roofing work was carried out to a different specification to the original contract with different materials being used.
Engie subsequently made a £1.9 million claim under its insurance policy in respect of the rectification work.
In reaching the agreed £600,000 settlement, Northern Bear said it had considered the management time likely to be involved, the future legal costs which would be incurred in defending the claim and the commercial risk of any matter of litigation.
‘Springs and Northern Bear's other subsidiaries retain excellent commercial relationships with Engie's regional and national management team. As such, Engie continues to be an important and valued customer for the group,’ the company added.
The settlement will be recorded as an exceptional item in the group's annual results to March 31, which are expected to be released in the week commencing July 18.
Northern Bear shares were untraded at 58.70 pence each in London on Friday.
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