High Court orders Mears business to pay housing group £6.5m following contract row

A repairs and maintenance firm has been ordered by the High Court to pay Home Group more than £6.5m following its breach of a contract.

MPS Housing, part of the £949m-turnover Mears Group, will have to pay up after 55,000-home provider Home Group successfully used a fast track procedure to claim money to cover its losses.

The decision last week relates to MPS breaching a seven-year contract to repair and maintain Home Group’s 15,000-home housing stock in the South-east.

MPS attempted to terminate its contract with the group in late 2021 and stopped working for it in May 2022, the judgement said. It is not clear from the judgement why MPS pulled out.

A referral to adjudication by Home Group, in line with the Housing Grants, Construction and Regeneration Act 1996, led to a decision in November 2022 that the termination was invalid, and that MPS was in breach of the contract.

A subsequent adjudication took place in April of this year in order to enable Home Group to recover resulting losses amounting to more than £6.5m.

After MPS failed to make payment, Home Group used a fast track adjudication enforcement procedure implemented by the Technology and Construction Court in order to obtain payment.

“Our client had some seven odd months of servicing properties at short notice, and had to find a replacement contractor in that time,” said Home Group’s solicitor, Karen Morean of Devonshires.

The presiding judge said the works in question related to a high volume of individual work items, each of which had a relatively low value, but which in aggregate left Home Group “considerably out of pocket” until payment.

Last week’s judgement revealed Home Group had initially claimed for more than £8m. This related to sums which Home Group paid to third parties to complete works that should have been carried out by MPS less the amount it would have paid to MPS for the same work.

MPS put forward a number of arguments relating to the validity and complexity of the claim, which included that it had insufficient time to consider the extensive evidence relating to several thousands of small value work orders, and that there were a number of duplications, as well as concerns around the integrity of the data provided by Home Group, and that this was a breach of ‘natural justice’.

But these submissions were on the whole rejected by the court, giving judgment in favour of Home Group.

MPS was acquired by Mears in 2018. The company delivers property services to over a 100 local authorities and housing providers around the country.

A spokesperson for Mears said: “MPS is pleased that the final account on this contract has been concluded and is very satisfied with the outcome.” She declined to comment on the reasons for MPS pulling out of the contract.