The Court of Appeal has confirmed that approved inspectors do not owe a duty under Section 1 of the Defective Premises Act 1972 (the Act) in the exercise of their building control functions.
Background
The Building Act 1984 (the 1984 Act) introduced the approved inspector regime. Previously, only local authorities could provide inspectors to enforce and certify compliance with the Building Regulations. The 1984 Act permitted that work to be done by private inspectors.
The 1984 Act came into force when Anns v Merton London Borough Council (1977) was good law. In that case the House of Lords found that a local authority was liable at common law for its negligent approval of the plans for a building’s foundations. However, some disquiet developed as to the consequences of the decision, with widespread claims against local authorities being possible. The decision in Anns was overturned in Murphy v Brentwood District Council (1991). The House of Lords in that case held that local authority building control inspectors did not owe a duty of care in respect of economic loss caused by a defect in the building not identified by negligent building regulations inspection and certification.
In The Lessees and Management Company of Herons Court v NHBC Building Control Services Ltd [14.08.19] (Herons Court) the Court of Appeal confirmed that an approved inspector does not owe a duty under Section 1 of the Defective Premises Act 1972 (the DPA), which provides a duty for those who take on work:
“for or in connection with the provision of a dwelling … to see that the work which he takes on is done in a workmanlike or, as the case may be, professional manner with proper materials and so that as regards that work the dwelling will be fit for habitation when completed”.
In Herons Court the lessees of a block of flats and the management company brought a claim for damages against four defendants ((1) the developer, (2) the main contractor, (3) the NHBC policy provider and (4) the approved inspector) arising out of the alleged defective construction of the flats in 2012. The approved inspector (AI) applied to strike out the case against it on the ground that no duty was owed by an approved inspector under Section 1 of the DPA.
The AI was appointed by the developer to provide inspection and certification services in respect of building regulations. In the absence of any contractual relationship and there being no allegation of a freestanding duty of care owed by the approved inspector to the claimants, the only issue was whether the role of an approved inspector fell within s.1 of the DPA.
The decision at first instance
The claimants submitted that, on its natural and ordinary meaning, s.1 extends to AIs because they take on work “in connection with” the provision of dwellings. The words “in connection with” have been found to be “words of the widest import” (Ashville Investments v Elmer (1989)) and denote “any link at all” (Amec v Thames Water (2010)).
At first instance in the High Court, Waksman J concluded that an AI did not fall within the natural and ordinary words in s.1, namely “a person taking on work for or in connection with the provision of a dwelling … owes a duty”.
The Court of Appeal decision
The Court of Appeal upheld the first instance decision. Lord Justice Hambledon commented that ‘In my judgment little assistance is to be derived from other cases in which the words “in connection with” have been interpreted.” Referring to the relevance of the context in which the words are used, Hambledon LJ added, “sometimes that will mean they are words of “the widest import”, but on other occasions it will not”.
The focus of s.1 is on the provision of a dwelling, and as such, Hambledon LJ noted, “the focus is therefore very much on the doing of the work”. An AI’s function is far removed from the work of the provision or creation of a building. As set out in the judgment, the powers of approved inspectors are “confined to refusing to issue a plans certificate or final certificate in the face of non-compliant work”.
The Court of Appeal agreed that there was powerful support from the decision in Murphy that a local authority inspector owes no duty under s1. Adding that, “no distinction can properly be drawn between the position of a local authority inspector and an AI”.
Comment
Murphy rejected any suggestion that local authorities should have the burden of acting, in effect, as guarantors that buildings erected in their areas have been constructed in accordance with the relevant building regulations. The role of an AI in the private sector is more restricted than that of a local authority inspector, and no distinction can be drawn between the two for the purpose of claims for economic loss.
If there was any doubt as to whether an AI can be liable for economic loss in the absence of a contractual relationship with the claimant, the Court of Appeal has extinguished such doubt. If a claimant wishes to bring a claim against an AI in respect of defects which mean that a building does not meet building regulations approval, they will need to ensure that they have a contractual route (e.g. by way of a collateral warranty).
It should be noted that s.38 of the 1984 Act (not yet in force, but being considered as part of a government consultation) would give parties a direct cause of action for breach of building regulations, which could give rise to claims against AIs in future.
Read more in Construction and Engineering Brief - November 2019
