It’s the first time a combustible cladding class action has been launched in Australia and is being backed by global litigation funder IMF Bentham.

IMF and Williams Roberts Lawyers in Sydney are pursuing compensation for people who have interests in buildings in Australia that have certain types of aluminium composite panel cladding with a combustible core comprised substantially of polyethylene (PE).

Williams Roberts Lawyers principal Bill Petrovski told Stockhead the class action is against the German manufacturer and Australian distributor of the polyethylene product, Alucobond.

The two respondents are German company 3A Gmbh and NSW-based Halifax Vogel Group, which imports and distributes 3A’s Alucobond products.

Polyethylene core cladding is often used for aesthetics to act as a cover for part or all of the external walls of a building.

The key issue is that the polyethylene core is highly combustible.

The dangers of combustible cladding has rapidly become a global issue following tragedies like the Grenfell Tower fire in June 2017 that killed 71 Londoners.

The building’s cladding is believed to have contributed to the rapid spread of the fire that gutted the 24-storey building in west London.

Similar fires have occurred in Australia and the United Arab Emirates.

Certain states in Australia have now started placing restrictions on the use of non-flame retardant materials in aluminium cladding on buildings.

“The safety risk associated with the use of [polyethylene] core cladding in buildings, especially multi-storey buildings, is now well known,” IMF says on its website.

“A number of fires around the world have drawn attention to this issue.

“Two such devastating examples are the Lacrosse building fire in Melbourne on 25 November 2014, and more recently and poignantly the Grenfell Tower fire in London on 14 June 2017.”

Following the Lacrosse fire, a $24m lawsuit was launched against the builder.

According to the Sydney Morning Herald, a state-backed audit found 200 buildings in Victoria had combustible cladding and 45 were in a high-risk category.

This latest class action, which is being done in Sydney through the Federal Court, will be funded through IMF’s Rest of the World Funds.

The investment is one of three conditionally funded cases that IMF pointed to in a recent investment portfolio update.

Mr Petrovski said the class action is “open” which means there is no limit to the number of people that can join the action.

While he wouldn’t disclose exactly how many people were taking part in the current class action, Mr Petrovski did say the buildings that would be covered under this class action would number in the hundreds, while the owners who would be seeking compensation would likely be in the thousands.

The amount of compensation being sought is the cost of replacing the polyethylene core cladding with other non-flammable cladding and other associated costs, which could range from hundreds of thousands of dollars up to several million dollars.

Mr Petrovski said he was confident the case was strong and IMF and Williams Roberts Lawyers would get adequate compensation for the claimants.

“We wouldn’t run a class action that we thought did not have good prospects of a good outcome,” he said.

“We’re very confident about the strength of the case on the back of the significant due diligence that’s been undertaken. IMF’s success rate is I think around 90 per cent.

“So they don’t back cases and put the money in them unless they think that they are strong.”

Mr Petrovski said class actions of this type would cost in the “millions of dollars”.

IMF and Williams Roberts Lawyers are looking at launching additional class actions against other manufacturers.