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It’s just over four years since the Grenfell tragedy on 14 June 2017 and its far-reaching consequences continue to reverberate around the UK construction industry.
As a result, the government commissioned an independent inquiry led by Dame Judith Hackitt looking at the building regulations and fire safety, with a particular focus on high-rise residential buildings (the Hackitt review). A final report was published in May 2018.
The new Building Safety Bill seeks to implement many of the major reforms recommended by the Hackitt review by addressing perceived issues in the construction industry. This is a radical shake up and a pivotal moment in the UK construction sector. It’s impact will be felt by those involved in planning, construction, property management, property-related dispute resolution, residential development taxation, insurance and health and safety.
Background
A draft Building Safety Bill was first published on 20 July 2020 for pre-legislative scrutiny when it received some criticism. On 5 July 2021 the government published its updated Building Safety Bill (Bill 139) (the Bill) together with various explanatory notes and introduced it in the House of Commons. Given the size and complexity of the Bill, it is not expected to pass through parliament until April 2022 and could undergo further changes as parliament scrutinises the Bill.
Impacts
As drafted, the Bill will impact on all buildings, not just high-rise residential properties. It introduces a new and enhanced regulatory framework intended to improve building safety in England and Wales, to be overseen by the Health and Safety Executive (HSE). The HSE will be responsible for all regulatory decisions under the new building control regime during the design, construction, occupation and refurbishment phases of ‘higher-risk buildings’. The Bill changes applicable standards for design and construction. It further provides for a new ‘gateway’ regime to ensure building safety risks are considered at each stage of the design and construction. It also:
- Creates a new developer levy
- Sets out new defined roles to ensure accountability for those responsible for safety
- Gives residents a stronger voice so they can contribute to maintaining safety in their building
- Impacts on a leaseholder’s liability for the cost of remedial work and
- Strengthens enforcement and sanctions to deter non-compliance.
The Bill creates the framework under which the so called ‘dutyholder regime’ can be introduced. Paragraphs 30-34 of the explanatory notes explain the intended operation of this regime. Dutyholders will be identified in the same way as dutyholders under the Construction (Design and Management) Regulations 2015 (CDM 2015). The government has published draft Dutyholder Regulations alongside the Bill which set out obligations on dutyholders similar to that in the CDM 2015. The Bill also imposes a requirement for dutyholders to inform the HSE of structural and fire safety occurrences that could cause a significant risk to life. This obligation continues through the occupation of a building’s life.
In addition, the Bill sets the groundwork for developers of new build homes to belong to a New Homes Ombudsman. This should offer much-needed recourse to owners of defective new-build homes. It also enables changes to the construction products regulatory regime allowing products to be withdrawn from the market if they present a risk.
The Bill will empower the Architects Registration Board to monitor architect competency, set relevant criteria and remove an architect from the register if they fail to meet those criteria. Accordingly, the Bill will have major financial and practical consequences for developers, property owners, construction professionals and their insurers.
It will be interesting to see whether the HSE, in its role as regulator, takes an advisory role alongside businesses; or alternatively takes on more of a ‘policing’ role in relation to the more stringent regulatory regime and moves quickly to enforcement where businesses fall foul of the new requirements.
We recently conducted a high-level review of the Bill with a focus on proposed amendments to the Defective Premises Act 1972 (DPA) in a joint CILA webinar to members. As discussed, the Bill’s broadest impact addresses gaps in protection for homeowners by expanding the available causes of action under the DPA. It also extends the limitation period for the time to bring an action in respect of damage or defects in relation to buildings, from six years to 15 years under the DPA.
Comment
Grenfell accelerated an already hard market for professional indemnity insurance, creating potential gaps in cover for some design professionals and/or increased premiums, deductibles and more onerous conditions. The Bill is anticipated to exacerbate that trend. We also expect a resultant increase in notifications and claims under s.1 of the DPA.
Anecdotally, achieving compliance with the Bill for dutyholders is a heavy obligation requiring a lot of work, time and resources. Therefore we recommend that the planning should start now if you have not already done so.
The Bill should be closely monitored in terms of its longer term impact.
Read other items in Construction and Engineering Brief - October 2021
Read other items in Professions and Financial Lines Brief - December 2021
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United Kingdom