The Building Safety Bill – a welcome change?
Following the Grenfell tragedy on 14 June 2017, the Government appointed Dame Judith Hackitt, former Chair of the HSE, to undertake an independent review of building safety in high-rise buildings. Dame Judith commented that the current system is "far too complex" and "lacks clarity as to who is responsible for what" with "inadequate oversight and enforcement". She wanted her recommendations to form the foundation of a clearer, simpler and more robust approach to the building and management of high-rise residential buildings. Her report was published in May 2018.
The Building Safety Bill
Three years on, and one year after the draft, Dame Judith's recommendations have finally been reflected in the Building Safety Bill (the Bill). While the focus of the Bill is on fire safety, it goes further, including establishing a new regulatory body, changing the law on limitation and creating powers to strengthen the regulation of construction products. Dame Judith is pleased with the Bill, saying she is "delighted that we have reached this important milestone for the Building Safety Bill" wanting to get the system right for the future and "set new standards for building safety". She hopes residents and other stakeholders can have restored confidence in high-rise buildings and that providers will now be held accountable for delivering safe buildings.
The RICS also generally welcomes the Bill, which it says "should ensure that this country never allows a tragedy like Grenfell to occur again". Concerns include a two-tier system of regulation when low rise buildings can also create risk.
The Bill's aim is to create new powers to ensure building safety for high-rise (18 metres or at least 7 storey) residential buildings as well as hospitals.
- Building Safety Regulator (BSR): In an attempt to simplify the regulatory regime, the Bill creates a new BSR which will sit under the HSE. Its main role will be to oversee the safety and performance of all buildings, improve industry competence and implement the new regime. It will have enforcement powers, carrying prison sentences and an unlimited fine, in order to hold those breaking the rules to account. The BSR will also establish three committees to support it.
- Gateway regime: Under the Bill, and implemented through planning law, three 'gateways' will be introduced. While building safety issues and associated risks are usually brought into focus when seeking a building control certificate at the end of a project, the intention is that, from now on, they will be monitored at each stage of the build, including the planning phase. The information collected will be submitted to the BSR, culminating in a completion certificate. This will create a 'golden thread' of information kept digitally for the life of the building (as recommended by Dame Judith). Such information will be available so that the right people have the right information at the right time. Upon completion, the information will be passed to the building owner and updated over time by dutyholders and Accountable Persons (see below) to ensure continued safety. It seems likely that these phases will be included in building contracts. Issues may therefore arise from delays between each phase, particularly in the early implementation when the system is new to users as well as the newly formed government department. It will be key to bottom out who bears the risk of each stage before the contract is signed and to ensure that insurance is in place until the completion certificate is issued by the BSR.
- Dutyholders: The Bill creates five dutyholder roles for those who commission, design and construct buildings, namely: (i) the client; (ii) the principal contractor; (iii) the principal designer; (iv) the contractor; and (v) the designer. These dutyholders will have formal responsibilities, including mandatory reporting obligations, to actively manage building safety risks throughout the building process.
- Accountable Persons: Following the third gateway, an Accountable Person (which can be an individual, partnership or corporate body e.g. the building manager) will be appointed to assess and report on a building's safety and risks to the BSR. The Accountable Person will also appoint a Building Safety Manager, to manage the building.
- Limitation: While the Bill does not provide leaseholders with funding for safety measures, it amends the time period under which legal claims can be brought against developers and contractors. In the most dramatic change, the Bill will extend the Limitation Act 1980 from 6 to 15 years in respect of claims for: (i) dwellings unfit for habitation under section 1 of the Defective Premises Act 1972 (the DPA); and (ii) breaches of Building Regulations under section 38 of the Building Act 1984. The cause of action under the DPA will also be broadened to include refurbishment works, as well as new builds. While breaches of Building Regulations and for refurbishments will apply from the date the Bill is in force, compensation claims for new buildings that are, for example, unfit for habitation will apply retrospectively. This has been met with dismay from those working in the construction industry. It places a much heavier burden on them, not only providing more time for claims going forward but also awakening claims they thought had expired. This is likely to result in an increase in claims, such as for non-compliant cladding, against those involved in the construction process, increasing their liability relating to buildings on which remedial works have already begun; at a time when many will have no insurance for such claims. It is important for those in the industry to prepare by checking their insurance and taking another look at claims thought to have expired long ago. For those bringing claims, it may not be such an easy prospect, as the pandemic has taken its toll on businesses so they may find insolvent contractors or a lack of insurance to cover potential retrospective claims.
- Developer levy: Developers seeking permission to develop certain high-rise residential and other in-scope buildings will have to pay a levy. The fund will help government pay for remedial work of building safety defects.
- Construction products: The Bill will strengthen regulation in this area to ensure that all construction products marketed in the UK are safe or removed from the market with stiff penalties for breaches.
- Architects' competence: The Bill will strengthen the powers of architects' professional body, the Architects Registration Board, to monitor competence.
- New homes ombudsman: This is a scheme for new build homeowners to seek redress, outside of the court system, against developers and contractors, should problems arise.
- Fire Safety Order: Changes will be made to the Regulatory Reform (Fire Safety) Order 2005, including increased fines and obligations to maintain fire safety records.
While the new measures should lead to safer buildings and therefore fewer defective construction claims in the future, we are likely to see a significant increase in claims for those already in existence. With the extension of limitation and retrospective application, liability within the industry has been increased for many years to come.