UK & Europe
Projects & Construction
The Government has today published its updated Building Safety Bill, which imposes considerable new liability on the construction industry via the Defective Premises Act. While the soundbites focus on residents, the implications are far wider.
The Ministry for Housing, Communities and Local Government has today published the updated Building Safety Bill, which was first published in the summer of 2020. The Government’s focus on a new Building Safety Regulator remains, to ensure that no dangerous materials are used in the construction industry. However, the Bill also introduces a retrospective extension of the time in which “residents can seek compensation for substandard construction work”, from 6 years to 15. The rhetoric implies that this will introduce a right which residents alone will be entitled to use, however it seems that the provisions of the Bill go further.
The current regime, where claimants have a six year limitation period from completion of a project to bring a claim, comes from the Defective Premises Act 1972. Section 1(1) of that Act imposes a duty on any entity involved in the construction of a dwelling “to see that the work which he takes on is done in a workmanlike or, as the case may be, professional manner, with proper materials and so that as regards that work the dwelling will be fit for habitation when completed”. Any claims for a breach of this statutory duty must be brought, currently, within 6 years. However, section 126 of the Building Safety Bill amends the Limitation Act 1980 to state that if “…by virtue of a relevant provision a person becomes entitled to bring an action against any other person, no action may be brought the after the expiration of 15 years from the date on which the right of action accrued.” The Bill then goes on to make clear that a relevant provision includes Sections 1 and 2A of the Defective Premises Act.
This is important for two reasons. Firstly, this extension of liability (which would apply retrospectively) flows through the Defective Premises Act and therefore any entities who can bring a claim under that Act now have 9 more years in which to do so. Secondly, this is likely to result in even more claims concerning cladding and external wall systems not complying with Building Regulations being brought against contractors, architects, subcontractors and other parties involved in the construction process. The construction industry has not merely been presented with more claims from residents, but with three more years of liability from any interested party in one hit. Given that many of those claims were thought to be out of limitation, it is likely that works will have been commenced on those projects which need remediating. The industry is therefore missing out on the chance to mitigate up to three years’ worth of claims by engaging with required works itself. It has also been commented that it is unlikely that individual leaseholder residents would be able to finance bringing a claim, and to that extent this change in the legislation is likely to miss its mark.
The Building Safety Bill also indicates where the Government’s thinking on this issue might be heading. Section 126 of the Bill lists section 38 of the Building Act 1984 as a relevant provision, which imposes civil liability for a breach of the Building Regulations that causes damage. This section of the Building Act 1984 has never come into force, but the Government might be planning on doing so to give the Building Regulations more teeth. Given the amount of regulation being imposed in this area, that ought not to be a surprise.