Sixty-four council homes on Newbyres Crescent and Gore Avenue in Gorebridge were demolished in 2016 after elevated levels of carbon dioxide (CO2) were found in some of the properties in 2014.
The council had been pursuing consulting engineers Blyth & Blyth for costs in excess of £12 million on the grounds the company had not carried out proper investigations of the site.
However, in a written judgement issued at the Court of Session last week, Judge Lord Doherty rules as Midlothian Council raised the action against the firm in September 2018, more than five years after incurring expenditure, the action should be dismissed.
Councillor Derek Milligan (Lab) said: “While our focus has always been the health and safety of our residents, we have a duty to pursue the public pound and recover this loss.
“To say I’m disappointed and frustrated by the court’s ruling is something of an understatement. The court’s decision effectively means that the council ought to have commenced proceedings before we knew we had grounds for doing so. Indeed, we had effectively run out of time to pursue an action before anyone even knew there was a problem with the design of the development. This seems very unfair.
“How could we raise an action in court before we even realised there was a problem? We feel, therefore, the court ruling is harsh. We believe that the consequences will be far reaching for those seeking redress for defective buildings. While we understand the legislation is currently being revised in Scotland, this comes too late to help us. We will be taking further legal advice on how to proceed and if we have grounds for an appeal.”