The Week That Was - 19 November 2021

Welcome to The Week That Was, a round-up of key events in the construction sector over the last seven days.

Second reading of the Domestic Building Works (Consumer Protection) Bill 2021-22 listed  for 19 November 2021

The Bill aims to introduce a licensing scheme for builders undertaking domestic building works in England.  Consumer protection is at the forefront of the initiative, and it is hoped that the scheme will promote fair competition amongst reputable builders, and remove rogue traders from the industry. 

In addition to licensing requirements, the regulations would introduce fines for operating without a license and sanctions for breaching licensing conditions.  In addition, an ombudsman service would be introduced to resolve disputes between consumers and licensee builders.

While consumer protection is at the forefront of the proposals, it is also hoped that the licensing scheme will help "professionalise" the construction industry, and generally increase the quality of the built environment.

A copy of the Bill can be found here.

Government releases factsheet setting out how Building Safety Bill will amend the Defective Premises Act 1972, the Building Act 1984 and Limitation Act 1980

In summary, the Bill proposes:

• Extending the limitation period for claims under section 1 of the Defective Premises Act 1972 ("DPA 1972") (which relates to the "provision" of a dwelling) from six to 15 years, with the new 15-year period applying retrospectively.
• Introducing a new section to the DPA 1972, which expands the right to claim so that it covers any work undertaken on an existing dwelling (not just work relating to its "provision"), provided that work is done in the course of a business.  The limitation period for such claims will be 15 years, although in this instance this would not apply retrospectively.
• Bringing into force section 38 of the Building Act 1984 ("BA 1984"), which gives private individuals the right to claim damages where they suffer harm because work on a building has not met Building Regulations standards (including damages arising from death or personal injury).  Notably, Section 38 was part of the BA 1984 when it passed into law, but was never brought into force. The limitation period for claims under section 38 of the BA 1984 will be extended to 15 years, but the change is not retrospective.

A link to the factsheet can be found here.

Civil Justice Council seek consultation on Pre-Action Protocols – responses sought by 10 am on 24 December 2021 

An interim report of the Civil Justice Council has been published on options for reforming the Practice Direction - Pre-Action Conduct ("PD-PAC") and existing Pre-Action Protocols ("PAPs").  The report also introduces potential new PAPs for certain claims, such as sexual abuse, international travel injury and small claims worth £500 or less.

Some of the consultation questions relate to all PAPs while others concern specific PAPs. Not every question need be answered, and there are options to submit comments not covered by a specific question. 

Views are also sought regarding the possible introduction of the following:

• Online pre-action portals for cases for which there is an online court process, with systems linked so that information exchanged through the PAP portal is automatically accessible to the court (unless privileged).
• Inclusion in PAPs of a mandatory good faith obligation to try to resolve or narrow disputes at the pre-action stage.
• A requirement to complete a joint stocktake report and list of issues, as a final step before commencing proceedings.
• A summary costs procedure for cases resolved at the PAP stage.
• Expanded court powers and new processes for raising compliance issues, facilitating "a more robust, consistent and timely approach to non-compliance with PAPs".
• More user-friendly PAPs, which avoid the use of technical language.

In regard to the PAP for Construction and Engineering Disputes, the report of the Civil Justice Council notes that having been reformed in 2016, respondents were "broadly satisfied" with it, although there were concerns that there was a "lax approach to non-compliance". As such, the Civil Justice Committee is "not minded" to make major changes.

For further reading, please click here.

A Greener future: heat pumps in the UK

Air source heat pumps are becoming increasingly popular across Europe. However, Keith Bastian – chief executive of Fischer Future Heat (a renewable home heating provider) - says that sales and installation of heat pumps in the UK are lower than almost anywhere else in Europe. 

According to Mr Bastian, the UK faces a huge infrastructure challenge based on the way that homes here have historically been built.  This means that heat pumps are not suitable to be retrofitted in most UK homes.  Beyond that, a generally poorly insulated house will require a larger pump to make up for the heat loss, which will not only cost more to install but will also cost more to run. 

Unlike the UK, countries such as Sweden and Norway have adapted their properties to utilise heat pump technologies. Alongside this, government policies have encouraged their installation. This has produced results –Drammen (a town in Norway) has seen overall cost reductions of around EUR2,000,000, with 1.5milliion tonnes of carbon emissions saved each year. 

However, despite the increased gas prices faced by consumers, it is the view of Mr Bastian that 'attitudes are yet to change, with many homeowners continuing to utilise fossil fuels on the assumption of a cheaper cost.  However the price of gas has recently increased, and I believe we all have to put up with high gas prices in the future, making the need to change twofold – not only to reduce carbon but also to save money in the long term.  Despite all of this positivity with the impending change to levies, businesses within the energy industry must come together to educate homeowners with the aim to help shift the mind-set of consumers.  For many, this won’t happen until the Government begins to force their hand.  With the green tax levy set to be introduced in the not-too-distant future, this may happen sooner than we think'.

For more information, please click here.

Contractor required to pay for 'slurry' aggregate 

Readie Construction Limited ("Readie") have lost their High Court appeal following a dispute relating to aggregate that they say turned into slurry following heavy rainfall. 

Readie, who were constructing a subbase for a slab at a new warehouse in 2018, withheld payment of £224,092 for the last batch of aggregate, which it claimed was defective. An initial County Court Judgment requiring Readie to pay was appealed. However, the High Court has confirmed that the original ruling stands. 

Justice Martin Spencer considered that where the delivered goods had met the contract specification, and where the was no fraudulent activity, delivery under the contract had taken place.  As such, payment was unable to be withheld on the basis that the goods did not meet the specification. He did confirm, however, that – because the contract focused on aggregates - had the supplier provided 'sand, or teddy bears, instead of aggregates' then withholding payment would, in those circumstances, have been fair. 

For further reading, please click here.

With thanks to Erica Lehmann, Hannah McDonagh and Jonathan Carrington for contributing to this week's edition.