Building Safety Bill – building defect claims

In the last edition of Cornerstone we discuss the concept of a new Regulator for construction products. This was a key component of the Building Safety Bill (the Bill) which was introduced to Parliament on 30 June.

Heralded as “the biggest [reform] to building safety in a generation”, among a host of other reforms, the Bill seeks to:

• introduce new and enhanced regulatory regime for building safety to new and existing ‘higher risk’ buildings; and 
• impose in-occupancy obligations for high risk buildings.

However, perhaps one of the most newsworthy proposals is the extension to the limitation period for bringing claims under the Defective Premises Act.

The Building Safety Regulator

In addition to the new national Building Safety Regulator, there will be a regulatory regime sitting within the Health and Safety Executive, which will be applicable to ‘higher risk’ buildings. These include new and existing buildings over 18 metres in height, or seven or more storeys, and containing two or more residential units. Hospitals and care homes will also be included within this definition for the purposes of design, construction and refurbishment, although the additional ‘in occupancy’ obligations will not apply.

As part of this regime, the Bill introduces a series of ‘gateways’ which will apply to the design, construction and refurbishment of higher-risk buildings. Whilst the new regime is not expected to come into force until 2023, the intention is that the first of these gateways could be applicable from as early as August 2021, through amendments to the Town and Country Planning (Development Management Procedure). If so, this will mean that the HSE will become a statutory consultee on relevant planning applications from 1 August, with the intent that the fire safety of a building is considered at the earliest point in the development process.

Gateway 1 requires applicants to submit a fire statement with their planning application which should include information about fire service access and water availability. It should also contain detail of the fire strategy for the building, details to demonstrate whether the building has an external wall system requiring external sign off, and details of the evacuation strategy and fire suppression systems.

Gateways 2 and 3 are expected to come into force 12 to 18 months after the Bill receives Royal Assent. They will replace the existing Building Control approval stages of a development, with Gateway 2 replacing the ‘deposit of plans’ stage, and Gateway 3 replacing the final certificate/ completion stage. Each gateway acts as a ‘stop/go’ point in the development which must be satisfied before (1) construction works can commence and (2) a building can be registered for occupation.

Between these gateways, duty holders will be required to maintain a ‘golden thread’ of information related to the design and construction of the building. This information must handed over to the building owner at Gateway 3 in order that “the right people have the right information at the right time to ensure buildings are safe, and risks are managed effectively.”

In-occupancy obligations for higher-risk buildings

All occupied buildings falling within this ‘higher-risk’ definition will be required to have an Accountable Person, whose role it will be to deliver building safety to residents. As part of this, the Accountable Person will be legally responsible for registering new higher-risk buildings prior to their occupation, and existing high risk buildings within a prescribed period of time.

Other obligations of the Accountable Person include conducting an assessment of building safety risks, taking proportionate steps to reduce and manage those risks and summarising this information in a safety case report for the building. All of this information must then be stored as part of the ‘golden thread of information’.

Time extension for construction claims

Section 126 of the Bill amends the Limitation Act 1980 in respect of damage or defects in relation to buildings. The effect of the proposed amendment is to give greater legal protection to homeowners by extending the time period applicable to claims for defective buildings to 15 years “from the date on which the right accrued” – i.e. the time the work is completed. This is a considerable increase from the current position of either:

• six years from the date of the cause of action arises; and/or 
• three years from the date of knowledge of the damage, where the damage is latent.

Crucially though, the proposal in the Bill regarding limitation is intended to take retrospective effect, meaning that homeowners will be able to bring claims for compensation if their property was built up to 15 years prior to the Bill coming into effect.

Whilst the amendment does greatly increase homeowners’ rights, the practical effectiveness of an extended limitation period remains to be seen as the Bill does not solve issues of recoverability – i.e. when a developer and/or a designer cease trading. There are also concerns as to whether defendants’ right to a fair trial will be preserved, given the likely historic nature of these claims.

We will keep you appraised of developments in relation to the Bill as it passes through Parliament.  In the meantime, if you have any queries in relation to safety related defects, or your duties in regard thereto, our Construction and Engineering Team would be pleased to assist.

This article is from the July 2021 issue of Cornerstone, our newsletter for those working within the construction industry. For further information please contact Steven Williams or another member of Birketts’ Construction and Engineering Team. To download the latest issue, please visit the newsletter section of our website.