The Building Safety Bill proposes wide-ranging and transformative changes to building safety, and is expected to receive Royal Assent in 2022. But what does the construction industry think about it?
On 30 November we asked industry leaders at our virtual panel discussion to share their thoughts about the Bill that will herald the biggest changes seen in the construction sector for decades.
Martin Taylor, Executive Director of Local Authority Building Control chaired the webinar, and was joined by:
- Rob Charlton, CEO, Space Group
- John Blackledge, Director of Health and Safety, Grainger plc
- Charissa Shears, Legal Director, Bouygues UK
- Simon Lewis, Partner, Construction and Engineering, Womble Bond Dickinson.
The event began with a brief introduction to the Bill and its progress, and then focused on three main areas:
- The issues arising from the introduction of Gateways Two and Three.
- The impact of increased liability and limitation periods for bringing claims.
- What construction businesses can do to prepare for the changes proposed by the Bill.
Questions were also taken from the audience.
The key points from the event are summarised below – to watch the full webinar please email our events team.
Implementing Gateways Two and Three
The Gateways introduce requirements at key stages in the design and construction of new higher-risk buildings.
Gateway One is at the planning application stage, is not part of the Bill, and has been in place from 1 August 2021. However, Gateways Two and Three will be before the building works start and when the building works are completed respectively, and are currently anticipated to come into force in late 2023.
The panel looked at the introduction of Gateways Two and Three and how these may affect construction projects. In particular, they considered the challenges of availability of people to implement the Gateway Two and Three changes, both from a geographic and skill set perspective; the lack of knowledge in the industry about the breadth of these changes in the Bill and the need to start preparing construction businesses now; the conversations and planning that are already underway within the panel members' organisations; the difficulties in forecasting the risk, cost and time impacts of the Gateways and effects on practical completion and phased occupation; and whether there is a risk of the Bill being "watered down".
The Defective Premises Act, the Building Act, and limitation periods
Under the Bill, the limitation period for bringing claims under Section 1 of the Defective Premises Act 1972 (which requires residential buildings to be habitable and built in a professional or workmanlike manner with proper materials) will be more than doubled, from six to 15 years, with retrospective effect so that claims that were previously time-barred could potentially be revisited.
The Bill introduces a new section 2A to that Act too, which allows for claims over subsequent building works (not just the original construction of the building). The Bill also refers to Section 38 of the Building Act 1984 – this section is currently not in force, but would allow claims for damage caused due to breach of Building Regulations. The limitation period for claims under Sections 2A and 38 would also be 15 years but is prospective (going forward) only, not retrospective.
All of these changes are expected to come into force shortly after the Bill receives Royal Assent.
The panel examined how these changes to the Defective Premises Act, the Building Act, and the limitation periods for bringing claims would impact on construction businesses, particularly from a contracting and insurance perspective. They talked about the risk to construction businesses and risk being passed down the supply chain; the hardening of the professional indemnity insurance market post-Grenfell and the availability, the cost, and the perceived and actual value of that insurance; the strict liability position under the Defective Premises Act; whether we will see a surge in claims or not, bearing in mind the costs and risks involved; the need to set up digital records in a way which is sustainable for the future; and how the focus in the future is likely to shift towards buildings below 18 metres in height.
The construction industry over the next 18 months
Finally, the panel talked about what construction businesses should be thinking about or doing now and over the next 18 months, in light of the changes proposed by the Bill.
This included a discussion about construction businesses needing to understand their liabilities; the need for more detailed industry guidance (as the Bill lays out the structure of the new building safety regime on the basis that more detail will follow), but equally the need to act on the guidance that has already been provided; the importance of checking professional indemnity insurances, including the excess amounts and any exclusions such as for fire safety issues; reviewing the risk profiles of previous contracts from up to 15 years ago (whereas previously this review may have been up to 12 years only if a contract was executed as a deed); maintaining records for 15 years in light of the extended limitation periods for claims; and the importance of acting now.