Approximately 64 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.
Midlothian Council was pursuing consulting engineers Blyth & Blyth for costs on the grounds they had not carried out proper investigations of the site.
The Court of Session made the decision to dismiss the claim yesterday, 21 March, because the council has raised the action against the firm more than five years after incurring expenditure.
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Midlothian Council Leader, Councillor Derek Milligan said: "While our focus has always been the health and safety of our residents, we have a duty to pursue the public pound and to try 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 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 an issue? 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."
(CM)
