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New Building Safety Bill could trigger increased compensation claims

The Government has published the updated Building Safety Bill to ensure dangerous materials are not used in the construction industry following the Grenfell tragedy in 2017 which could trigger increased claims for compensation.

The Ministry for Housing, Communities and Local Government Bill would impose considerable new liability on the construction industry, introduce a Building Safety Regulator and crucially, change the limitation periods for claims arising under the Defective Premises Act 1972 (the “DPA”) in which “residents can seek compensation for substandard construction work”, from 6 years to 15.

The proposed changes are expected to result in increased claims against contractors, architects and others involved in the installation of cladding and external wall systems that do not comply with building regulations.

The Bill could also see the enforcement for the first time of section 38 of the Building Act 1984 which imposes civil liability for a breach of the Building Regulations that causes damage.

The Bill has six parts, 147 clauses and 218 pages in its initial form and the Government believes it will “create lasting generational change and set out a clear pathway for the future on how residential buildings should be constructed and maintained.”

According to Housing Secretary Robert Jenrick the Bill gives residents more power to hold builders and developers to account and toughens sanctions against those who threaten their safety.    

Under the Bill, the Health and Safety Executive (HSE) will set up the Building Safety Regulator to oversee the new regime and will be responsible for ensuring that any building safety risks in new and existing high rise residential buildings of 18m and above are effectively managed and resolved, taking cost into account.

It will include implementing specific gateway points at design, construction and completion phases to ensure that safety is considered at each and every stage of a building’s construction, and safety risks are considered at the earliest stage of the planning process.      

These changes are designed to simplify the existing system to ensure “high standards are continuously met, with a ‘golden thread’ of information created, stored and updated throughout the building’s lifecycle, establishing clear obligations on owners and enabling swift action to be taken by the regulator, wherever necessary.”

Under the proposals, the government is more than doubling the amount of time, from 6 to 15 years, that residents can seek compensation for substandard construction work. The changes will apply retrospectively. This means that residents of a building completed in 2010 would be able to bring proceedings against the developer until 2025.

These reforms also include new measures which apply to those seeking compensation for shoddy refurbishments which make the home unliveable.

New measures in the Building Safety Bill introduced will:

  • Ensure there are clearly identified people responsible for safety during the design, build and occupation of a high-rise residential building.
  • Establish a Building Safety Regulator to hold to account those who break the rules and are not properly managing building safety risks, including taking enforcement action where needed.
  • Give residents in these buildings more routes to raise concerns about safety, and mechanisms to ensure their concerns will be heard and taken seriously.   
  • Extend rights to compensation for substandard workmanship and unacceptable defects.    
  • Drive the culture change needed across the industry to enable the design and construction of high-quality, safe homes in the years to come.

W Denis is a specialist insurance broker in the field of construction and property. The new Building Safety Act has ramifications for many different types of insurance: Professional Indemnity, Directors & Officers Liability, Contract Works, Latent Defects, Legal Indemnity, General Liability etc.

Crucially the extended limitation period will create longer and more onerous liabilities for those firms involved in all stages of design, build & support services connected to buildings being constructed in the UK and it will be important for those firms to work closely with a specialist broker which is able to procure the most meaningful available coverage.

Additionally, another new obligation coming out of this legislation is the requirement of complying with the ‘Golden Thread`, whereby comprehensive knowledge of all specific components used to construct the property are maintained and made available to successors in title.

W Denis works with specialist firms that can manage this process and help property developers comply with this obligation and provide additional building guarantees. For further information and to speak to a specialist, please make contact via Daniel.Moss@wdenis.co.uk on 0113 243 9812

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