Steel mesh backlash builds
Law firm Adina Thorn Lawyers is renewing its efforts to persuade homeowners to sign up to a class action lawsuit against steel mesh suppliers, following a $540,000 fine handed down to Brilliance Steel on Friday.
Brilliance had earlier pleaded guilty to 20 charges under the Fair Trading Act for misleading customers about whether some of its steel had been tested and certified as complying with a new earthquake safety standard.
Thorn said it was expecting a separate announcement within days on the penalty Steel & Tube would face after it pleaded guilty to 24 charges as a result of the Commerce Commission investigation into mesh steel.
Steel & Tube had a much larger share of the market than Brilliance, it said.
Thorn said 600 people had registered their interest in taking part in a class action lawsuit.
‘‘We envisage that number will increase considerably after the Steel & Tube announcement in the coming days,’’ she said.
Timber King and NZ Steel Distributor were fined $400,950 for also making false and misleading representations about their steel mesh products earlier this year.
The commission filed 59 charges against Euro Corporation in December. It is a much larger supplier of steel than Brilliance, but not as large as Steel & Tube.
What is the issue with the steel mesh?
The steel subject to the successful prosecutions was marketed as complying with, and/or having been tested to meet, a new Australian/New Zealand Standard for reinforcing steel suitable for structural use in earthquake zones, between about 2012 and 2016.
How much steel and what is it used for?
Thorn believes overall about a million sheets of steel are involved. Some was imported from China and Malaysia. It is used for reinforcing concrete. According to the Law Society, most of the 100,000 homes built in New Zealand since 2012 have concrete slab floors with steel mesh in them.
What is the purpose of the standard?
To ensure that the steel mesh can stretch 10 per cent without breaking, if it is put under strain.
So is the steel unsafe?
The message from officials is not to worry.
The Ministry of Business, Innovation and Employment (MBIE) said in 2016 that initial testing showed the products sold by Brilliance and Euro Corporation did not meet the requirements of the standard (AS/NZ 4671:2001), and that the steel mesh the commission tested only stretched on average 8 per cent before failing.
It noted that Euro Corp did not accept that its product was noncomplying
MBIE also noted that before 2011, steel mesh in concrete was only designed to have 2 per cent stretch, so homes built using the steel at the centre of the controversy would ‘‘still be more resilient than the many thousands of houses built prior to 2011’’.
On that basis, it said it was not concerned that the steel products concerned posed a safety risk for newly built houses.
Why was the standard improved?
Some houses in Christchurch experienced more damage than expected during its 2011 earthquake, MBIE said.
It also said some of that damage might have been avoided if concrete floor slabs contained reinforcing steel to tie the foundations together, and the steel had higher ductility (was more stretchy).
What is the purpose of the class action lawsuit?
Adina Thorn says she does not want to be a ‘‘panic merchant’’, but the steel was not the product consumers understood they were getting or paid for, so the law firm believes they are entitled to compensation.
Thorn said it was mainly hoping to help homeowners win compensation for the ‘‘stress and anxiety’’ they had faced.