The Week That Was - 9 September 2022

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

The Health and Safety Executive opens its consultation on Building Safety Regulators Operational Standard Rules

The Building Safety Regulator (BSR) will be operating as part of the Health and Safety Executive (HSE) from April 2023.  The HSE has opened its consultation on the proposed operational standards rules (OSRs), consulting on:

• OSRs
• BSR monitoring arrangements, including reportable data and key performance indicators (KPIs) for building control bodies
• the strategic context for building control oversight

The consultation relates to the different BSR functions set out by the Building Safety Act 2022.  The independent oversight of building control regulators is one of those functions.  The HSE says that, to support the development of the draft OSRs, it has:

• done research to get insight from building control bodies and professionals;
• reviewed building control procedures;
• assessed different approaches to current operational standards and KPIs; and
• evaluated lessons learnt from partner regulators.

The consultation closed on 25 October 2022.

For more information, please click here.
 
Insurance clause aimed to speed up cladding works

The International Underwriting Association (IUA) and the Department for Levelling Up, Housing & Communities has developed a wording for use in work being completed under the government’s £4.5bn Building Safety Fund.  The Building Safety Fund was introduced to cover the cost of refurbishment work on high rise residential blocks over 18 metres. 

The wording is designed to provide insurers with increased confidence in risk management processes employed by the construction sector for building cladding remediation work.

Levelling up Secretary, Greg Clarke said: “…We welcome the work of the IUA and the underwriters who are taking a proportionate approach to fire safety cover and I thank insurers in advance for using it.”

Chris Jones, IUA Director of Legal and Market Services, said: “Our new model clause sets out a number of key risk management processes that will ensure work being carried out is conducted within recognised industry standards…  The market for construction professional indemnity insurance has been difficult in recent years, reflecting concerns about the potential for historic liabilities to develop into future claims following the Grenfell Tower tragedy.  Each new risk must continue to be assessed on a risk-by-risk basis, of course, but the clause should provide underwriters with greater confidence to offer effective insurance solutions for future work."

To read more, click here.

Introduction of "building industry schemes" in England

Sections 126 to 129 of the Building Safety Act 2022 (BSA 2022) came into force on 1 September 2022.

These sections of the BSA 2022 allow the Government to set up "building industry schemes" for England, for any purpose connected with "securing the safety of people in or about buildings in relation to risks arising from buildings, or improving the standard of buildings".  They also allow the Government to bar organisations that are members of that scheme (or are eligible for membership) from developing land.

The Government's intention for these provisions is to use them as a means to induce the industry to pay for remedial works on unsafe high-rise residential buildings.  It remains to be seen how the Government will exercise its powers under sections 126 to 129.

You can read the relevant provisions of the BSA 2022 here.

Limitation may continue to run after insolvency 

In a recent decision under the Third Parties (Rights against Insurers) Act 2010 (the 2010 Act), the Leeds County Court has determined that, for claims against insurers, time can continue to run for limitation purposes even after the insolvency of the insured.

This contrasts with the previous position under the Third Parties (Rights against Insurers) Act 1930 (the 1930 Act), the predecessor of the 2010 Act, which was that limitation is paused at the date of the insolvency of the insured.

The decision is important because it means claims against insurers may become time-barred, even if the six year limitation period has not expired when the insured is wound up.  Claimants may have previously thought they had unlimited time to bring such claims by virtue of the 'pause' in limitation, however this judgement confirms that time continues to run for 2010 Act claims.  This may cause some claimants to issue their claims earlier, to avoid limitation issues.  The judgment will assist insurers in raising limitation defences to 2010 Act claims.

Further detail can be found here.

Improvements for Construction SME's post-pandemic

A study conducted by the Chartered Institute of Building (CIOB) has found that many construction small and medium enterprises (SMEs) have experienced a reduction in payment times, as well as improvements in mental health support and hygiene facilities. 

52% of those who responded to CIOB's survey said that they clients are taking less time to make payments, and more than half of those said they were getting paid within 40 days or less.  Whilst this is an improvement, CIOB consider that more can be done and achieving payment within 30 days or less is a priority.  

Paul Singh, Commercial Director at project and programme management consultancy, EEDN, said: “The pandemic has definitely increased collaboration and empathy within the industry from clients to consultants and contractors, opening up dialogue and reducing the adversarial approach.  Construction has really taken note of the need to prioritise mental health and wellbeing.  Projects are now defined with a new, hybrid way of working in mind and spaces have wellbeing built right into them.  We have also seen greater proactivity when it comes to invoicing and payments, with invoices often being settled before the payment period is up.  There is undoubtedly still a lot of work to be done but the signs are certainly encouraging.”

You can read more here and view the full research report here.

Thanks Georgina Haynes, Ciara Stewart and Ella Ennos-Dann for contributing to this week's edition.

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.