The Week That Was - 7 July 2023
Welcome to The Week That Was, a round-up of key events in the construction sector over the last seven days.
The Responsible Actors Scheme (RAS) – further legislation
On 3 July 2023, the Government published the Building Safety (Responsible Actors Scheme and Prohibitions) Regulations 2023 (SI 2023/753), which prohibit residential property developers who refuse to sign its remediation contract from operating in the English construction market. The Regulations came into force the following day. Any developer that fails to join the RAS or to comply with its requirements will be prevented from carrying out future development.
The Government has also updated the 'Explanatory Memorandum' to the Regulations, which notes that further guidance on the RAS will be published during Summer 2023, before any prohibitions on developments might be applied.
You can find a copy of the Explanatory Memorandum here.
Construction Workers Secure 7.6% Pay Increase
500,000 site workers will receive a pay increase after the Construction Industry Joint Council (CIJC) agreement was reached between construction unions and contractors. This will form a 6% pay increase from next month, followed by a further 1.5% rise from January 2024.
There have been further increases to other rates following the agreement. The taxed travel allowance will rise in line with the pay increase; the lowest pay rate for labourers will increase by 8% from July; and industry sick pay will increase to £154.02 from next week and to £156.33 from January.
Further work will now be done to ensure the CIJC agreement is fit for purpose and meets the needs of construction workers.
To read more, please click here.
Sky Wins Multi-Million Pound Insurance Dispute over Faulty Roof
Sky has won its claim against its insurers over water damage to its roof after a judge decided the damage occurred during the policy period. Sky UK Ltd and contractor Mace Ltd are entitled to a pay-out from insurers; the final figure has not yet been determined (although Sky sought £138m at trial).
Judge Pelling found that the damage was caused by the decision to design the structure without incorporating the use of a temporary roof until waterproofing had taken place. This meant that the losses caused by this damage fell within the period covered by the insurance policy.
The Judge also rejected the insurers' argument that the deductible should apply multiple times for each event that caused the damage. Instead, he held that the deductible can only be used for the single event identified as causing the damage: the decision not to use a temporary roof.
To read more, please click here.
RICS Disciplinary Process – Sanctions
RPC has published the fourth article in its series on the RICS disciplinary process, considering the sanctions that RICS can impose and the next steps for surveyors following a disciplinary decision.
In our previous three articles, we set out an overview of the RICS disciplinary process, the investigations stage and the RICS hearing process.
To read more, please click here.
Race narrows for £275m HS2 job
The race for one of the last major building projects yet to be awarded on the first phase of HS2 has been narrowed to two bidders. The £275m scheme based in Washwood Heath in Birmingham will serve as the railway's network control centre and rolling stock maintenance depot.
Once shortlisted for the job, Turkish contractor Gülermak is thought to be out of the running. This leaves Vinci and Keltbray and a team comprising of VolkerFitzpatrick and VolkerRail.
HS2 declined to comment on who was left in the race, but a spokesperson said: “The procurement process for the Washwood Heath depot and the Network Control Centre is and we intend to award contracts next year.”
To read more, please click here.
DLUHC intervention in planning applications and infrastructure levy may result in fewer affordable homes being built
Rachel MacLean, Minister of State for housing at the Department for Levelling Up, Housing and Communities (DLUHC), has defended Secretary of State Michael Gove's decision to call in a series of housing schemes on design grounds, a sign of an interventionist approach from the Government which has caused AC Lloyd Homes, the housebuilder behind a 200-home development in Warkwickshire, to withdraw its full planning application for the scheme.
DLUHC has also received criticism from the housing sector for its proposed infrastructure levy on the grounds that it would result in fewer affordable homes being built in England. However, MacLean maintains that "the problem with development is that often the infrastructure does not come forward with the development… So [when] you get a big development, you don’t get the necessary road improvements, you don’t get the GP surgery, you don’t get the doctors, the schools, the play parks that communities want".
To read more, please click here.
LHC Procurement searching for firms to fill places on fire safety consultancy frameworks worth £140m
LHC Procurement, provider of framework agreements used by local authorities, social landlords and other public sector bodies, has started searching for firms to fill places on fire safety consultancy frameworks in England, Scotland and Wales, worth a combined £140m.
The work is expected to include fire safety consultancy, fire risk assessments and inspections, cladding remediation and waking watch services. It will also include installation, maintenance, testing and remediation of passive and active fire protection measures such as fire doors, sprinklers, fire extinguishers and alarms.
To read more, please click here.
Important judicial guidance on limitation and the recoverability of damages for cladding claims
On 5 July 2023, the Court of Appeal handed down its decision in the case of URS Corporation Limited v BDW Trading Limited. This was an appeal from 2 decisions in the Technology and Construction Court, relating to the recoverability of damages for the costs of remediating fire-safety defects on numerous blocks across the UK where BDW was the developer and URS were involved in the fire engineering design of the buildings. The decisions also raised significant issues about when time starts to run for limitation purposes. In very short summary, the Court of Appeal held that a defendant construction professional has a duty to guard against the risk of economic loss that a claimant may suffer if the structure is built using a negligent design such that it will require remediation, either because it is structurally unsound or, as here, because it is unsafe. The Court of Appeal also held that, where a design deficiency does not cause physical damage, the cause of action will accrue at the date of practical completion at the latest. The Court went on to conclude that BDW's claim was not statute-barred because it could rely on s135 of the Building Safety Act, which extends the limitation period for claims under the Defective Premises Act to 30 years, retrospectively.
We will be publishing a fuller note on this decision next week. In the meantime, you can read the judgment here.
Authors for this week's edition: Mahsheed Ibram, Ava Mathias and Nikita Austin.
Disclaimer: The information in this publication is for guidance purposes only and does not constitute legal advice. We attempt to ensure that the content is current as at the date of publication, but we do not guarantee that it remains up to date. You should seek legal or other professional advice before acting or relying on any of the content.