Unpunished and Undeterred: Corporate Accountability After Grenfell

Summary

On 14 June 2017, a routine kitchen fire in Grenfell Tower spread uncontrollably through an external cladding system, leading to the deaths of 72 people. The cladding system comprised combustible plastic products made by three companies: Arconic, Kingspan and Celotex. Arconic’s product, Reynobond PE, was found to be the “primary cause” of the rapid spread of the fire.^[1] Nine years on, Arconic has yet to face any meaningful accountability process.

This briefing builds on investigative research by Common Wealth and FIND.ngo into Arconic Inc and their provision of the flammable Reynobond PE cladding used on Grenfell Tower. It outlines key legal mechanisms by which Arconic has avoided accountability for its role in the fire and recommends actions targeting the regulatory discrepancies that facilitated this.

By tracing Arconic’s conduct in relation to the fire, we observed how legal structures intended to balance corporate power, instead enabled and shielded it. While victims and survivors of the fire (henceforth, “the affected community”) are still waiting for justice, Arconic continues to generate billions in revenue for directors, shareholders and partners.^[2]

Using this conduct as a case study, the report proposes stronger corporate accountability frameworks in England and Wales, noting that we lag behind our international counterparts. We suggest that the factors which led to Grenfell, if left unchecked, would allow future misconduct to go unpunished and undeterred.

Our investigation revealed the following:

In 2023, Arconic completed two settlements related to the fire: a settlement with its shareholders for economic loss arising from misleading statements in connection with the safety of Reynobond PE (the Howard case), and a civil settlement with the affected community (the Abdel-Kader litigation).

Arconic paid out more to its shareholders than to survivors of the fire and bereaved families. It insured away its legal problems, while British taxpayers footed cladding remediation costs.

Despite the risk to life posed by its defective cladding, exposed in the Grenfell Tower fire, there is no evidence that Arconic has since sought to trace the majority of its Reynobond sales.

Findings:

1. In 2023, Arconic completed two settlements related to the fire: a settlement with its shareholders for economic loss arising from misleading statements in connection with the safety of Reynobond PE, and a civil settlement with the affected community.^[3] Arconic’s largest payout for Grenfell was to its shareholders ($74 million) and not to the estates of victims or survivors of the fire ($43 million).^[4]‍
2. All but $2 million of Arconic’s payments were covered by their insurers. These included Ironshore, Starr, Allianz, SCOR, ANV, Starstone, Apollo, Hiscox, XLC, Great Lakes, Endurance, Arch, Catlin and ACE Bermuda.^[5]‍
3. UK taxpayers covered the cost of remediating more than 500 other tall residential buildings clad with dangerous ACM PE.^[6] An unknown number of these were also fitted with Reynobond PE, sold by Arconic.^[7]‍
4. The Reynobond PE used in Grenfell Tower made up less than one per cent of annual Reynobond sales at the time. Arconic has not made public where the remaining 99 per cent of Reynobond is. The product had been sold globally for at least 20 years before Grenfell.^[8] Arconic has previously confirmed sales of 12.75 million square metres in total.^[9]‍
5. Several key individuals remained in positions of responsibility at Arconic and have faced no transparent accountability process. ‍
6. In 2023, Arconic was acquired by private equity giant Apollo Global Management in a deal valued at about $5.2 billion.^[10] The legal settlements took place while Arconic was in process of acquisition.

These findings allow us to observe that Arconic successfully avoided consequential accountability for its role in the fire, through a series of ordinary business practices. We argue that without adequate standards and laws, corporate misconduct embeds itself as common sense, leaving those suffering its consequences with ever-diminishing rights and remedies.

Recommendations:

1. Courts should have discretion to direct a portion of shareholder settlement recoveries to victim funds where the underlying conduct involved identifiable third-party harm.
2. Punitive damages should be available in England and Wales in cases where corporate illegality is implicated in a death or deaths and should cover reckless and negligent conduct as well as gross negligence and gross breaches.
3. It should be mandatory for corporate liability insurers to conduct human rights and environmental due diligence.  
4. Accountability mechanisms must be introduced to ensure that insurers do not cause, contribute, or are linked to entities involved in human rights violations.
5. Arconic should make public information regarding the remaining 99 per cent of Reynobond sales for 2014-2015, and sales of Reynobond for preceding years.
6. Increase the five-year ceiling on debarment from public contracts under the 2023 Procurement Act.  
7. Permanent debarment of Arconic from public contracts, to be reconsidered at publication of sales.
8. A comprehensive review of criminal sanctions that apply to corporate malpractice in England and Wales.

[.fig][.fig-title]Nine Years Since the Fire: an Interactive Timeline of Key Events[.fig-title][.fig-subtitle]Scroll horizontally to view the full timeline [.fig-subtitle][.fig]

[.notes]Source: Project team analysis. Click on events to learn more.[.notes]

Download the full report.

Acknowledgements

Project co-ordinator: Leela Jadhav

Project consultants: Peter Apps, FIND.ngo, Mouki Kambouroglou, Sophie Monk

Design, editorial, production and press: Amelia Horgan, Pinelopi Gardika, Trisha Mendiratta, Sophie Monk, Adam Peggs, Ralph Pritchard, Bella Smith

The authors would like to thank the Corporate Justice Coalition, Grenfell United, Steve Tombs, Michelle Meagher, Patrick Kenny, Pinelopi Gardika, Joel Schulin, Samuel Storey, n-Space, Inquest, and the lawyers who attended our roundtable, for helping to shape this project. We would also like to thank Sarah Nankivell and Mathew Lawrence for valuable comments and contributions.