This article was co-authored by Tom Fennelly, Trainee Solicitor, London.
The recent reporting surrounding RAAC (reinforced autoclaved aerated concrete), a product with life span of around 30 years, and the need for school closures in the interests of safety have caused concern for parents and teachers across the country. It has also resulted in both the construction industry and insurance sector reflecting on what their exposures may be.
The Department of Education (DfE) has issued a high alert that the use of RAAC could cause structural damage to buildings; potentially catastrophically. This is not a new discovery – questions were raised about structural deficiencies in the 1990’s, in 2018 by DfE and the Local Government Association, and again the following year by the Standing Committee on Structural Safety. However, these latest developments raise the question of what happens next, and what the implications might be for both the construction industry and insurance sector, in particular for professional indemnity insurers.
Claims and limitation
The use of the RAAC was prevalent in the 1960’s and 1970’s (although there are reported instances of its use in the 1990’s). This means that many of those entities involved in the use of RAAC are unlikely to still be trading. Limitation periods will also have expired for both tortious and contractual claims.
While novel claims under the Defective Premise Act (by virtue of the Building Safety Act 2022) could in theory be brought dating back 30 years, we seriously question whether this would apply here, when the buildings will have been fit for habitation when they were completed. The RAAC was not defective when installed; it has simply come to the end of its design life.
Claims are more likely to arise where building management companies have failed to undertake condition surveys during the lifecycle of buildings. In particular where it was known, or should have been known, that the buildings incorporated RAAC structural members. The same may be true of building surveyors advising on both the condition and value of buildings as they have been bought and sold. However, issues of scope of duty, awareness, causation and loss will no doubt arise.
As with the post-Grenfell cladding claims we have seen, as buildings come under greater scrutiny it is possible that other issues within a given building will be discovered – just what those issues are only time will tell.
One such issue that has already raised its head is the fact that the age of these buildings correspond with the wide usage of asbestos; this will add to both the direct and indirect cost of any remedial works.
What happens next?
Engineers and building surveyors are likely to be in high demand as building owners look to establish the condition of their buildings, the existence of RAAC, and the gravity of any remedial works required.
Given the necessity of keeping public services (such as schools) operating, the construction industry is likely to be tasked with identifying solutions and remediating these buildings as a priority. This may mean that resources are pulled away from other projects which could result in delays to those unrelated projects.
Shocking quotes have been published by Matt Byatt, the President of the Institution of Structural Engineers, who claims that the “government knew that many of its buildings were beyond their serviceable life”. Byatt says that it is the responsibility of owners and managers to ensure the buildings safety. The importance of a building owner’s role in this respect is now made clear by the Building Safety Act 2022.
Both the construction industry and insurance sector should be alive to the issues RAAC presents. However, claims against those involved in the design and construction of buildings where RAAC has been used are likely to be rare, based on what has been seen to date. However, those involved in the lifecycle of buildings (i.e. post their original completion) could yet face criticism and exposures. While only time will tell the extent of the claims presented, we do not envisage a flood of claims in the manner of the post-Grenfell fire safety litigation.