A ruling awarding more than $5.7 million to apartment owners hit by a flammable cladding-fuelled fire has been praised for “holding the [building] industry to account”.

Melbourne’s Lacrosse building was hit by the devastating blaze in November 2014, and owners launched legal action against builder LU Simon claiming more than $12 million for replacement of non-compliant cladding, damaged property and soaring insurance costs.

In the Victorian Civil and Administrative Tribunal last week, Judge Ted Woodward ordered LU Simon to pay $5,748,233 to apartment owners.

But he also ruled the vast majority of that sum would be paid to LU Simon by the project’s architect, fire engineer and building surveyor, who breached contractual obligations.

Builders Collective of Australia National President Phil Dwyer told insuranceNEWS.com.au the ruling is “a breath of fresh air”, adding it is “morally corrupt” to expect owners to pay for remediation.

“This is what we have been fighting for, to make the industry accountable,” he said.

“There are a lot of buildings with this cladding on and the regulator has been asleep at the wheel. The game is going to change entirely.”

International fire safety expert Jonathan Barnett, MD of fire engineering company Basic Expert, told insuranceNEWS.com.au the judgement is a good outcome for owners.

“This says to builders that if you take advice from experts you may find you are not negligent if something goes wrong,” he said.

“It gives builders a way out – they can rectify problems and recover the costs.”

Part of the payment to Lacrosse apartment owners is to cover “significantly increased” premiums for the owners’ corporation strata insurance policy.

Owners say they have already paid out more than $534,000 in additional premiums and face another $167,000 for the coming year.

“I award the owners the full amount of their claim in respect of additional insurance premiums totalling $701,270,” Judge Woodward said.

As previously reported by insuranceNEWS.com.au, thousands more buildings across Australia are believed to carry flammable aluminium composite panels (ACPs), and building ministers have agreed in principle to ban such materials in new construction projects.

However, Judge Woodward stressed his findings are based purely on the Lacrosse, which has 4000 square metres of ACPs with a 100% polyethylene core on external walls, and balconies without sprinklers

He says the judgement “should not be read as a commentary generally on the safety or otherwise of ACPs and their uses”.

“There may well be particular applications (such as for signage or decorative features) where ACPs, even with a 100% polyethylene core, can be compliant, including where made subject to an appropriate performance-based solution under the Building Code of Australia.

“ACPs with a lower polyethylene content may be suitable for more general applications. That is a matter for regulators and building engineering experts.”