Comment: Building Safety Bill disputes

The Building Safety Bill for England aims to transform the regulatory process – but to what effect?

Author:

David Greenwood

15 December 2020

Q: I am a design and build contractor, specialising in high-rise residential developments. Will the new Building Safety Bill cause more disputes over construction projects once it is enacted?

A: The UK government published this long-awaited bill in July. It takes on board the recommendations from the 2019 consultation as well as the Hackitt review, but goes even further by proposing a complete regulatory overhaul. It signals a new era in the way buildings are constructed and which products are used.

New regime

To begin with, the new regime will apply to all new multi-occupant residential buildings of more than 18 metres in height, or 6 storeys, in England (see paragraph 22 of the bill). However, existing buildings will also be brought under the system on a phased basis, and in due course the new regime may extend to other types of development.

One of the key changes being introduced is that the Health and Safety Executive must approve a development at three stages, known as gateways: planning permission; pre-construction; and pre-occupation.

The need to accommodate the new regulatory framework, progress through the gateways and achieve the heightened completion sign-off requirements means that the bill, once enacted, is likely to make projects longer and more expensive, at least initially.

The added expense should reduce over time, once the parties to a construction project get used to the new procurement models and collaborative working practices – which seem set to be inevitable and positive by-products of the new regime – and also once quality assurance protocols are established and the necessary training has been completed.

“To begin with, the new regime will apply to all new multi-occupant residential buildings of more than 18 metres in height, or 6 storeys, in England“

The additional oversight and upfront work required to progress through the gateways ought to result in fewer disputes.

Change-related disputes: gateway 2 dictates that construction cannot begin until the new office of Building Safety Regulator is satisfied with the design. As a result, any value engineering or numerous design changes after this stage will not make much sense because all significant change during the construction phase will need to be re-approved by the regulator, causing unnecessary delay and duplication of administration.
Defect-related disputes: the bill’s emphasis on the golden thread of information – possibly enabled by building information modelling – ought to provide an accurate as-built record. If it does, this should make defects more obvious, and allow easier identification of what has gone wrong and who is to blame. Therefore, while defects may hold up the gateway 3 approval and thus lengthen the construction phase, less time ought to be spent investigating the defects and disputing the cause than is currently the case.

The new regime is unlikely to put an end to all disputes, however. Where there are changes or defects are identified, the impacts may be even greater – so unless the contract and records make respective parties’ responsibilities unequivocally clear then it will be tempting for each to fight their corner, and disputes may still arise.

Additional disputes

Furthermore, the new regime may cause some additional disputes. The time it is going to take to progress through the gateways and achieve certification is uncertain at this stage. Unless a project programme builds in some extra contingencies for the uncertainty, the cause of the delay to the certification could be contentious and result in disputes.

The hard stop at gateway 3 represents an extra risk as well – in addition to the usual sign-off by the employer or project manager, the parties will also have to convince the regulator that the building is finished and compliant to achieve practical completion. This may cause extra delay, and increases the chance of disputes.

To mitigate this, the parties should allocate risk appropriately in the contract, and keep meticulous records that will deter the party at fault from pursuing a baseless claim. Careful claims management is needed throughout the project, identifying the causes, issuing early warnings, and implementing steps to minimise the impacts. Of course, there is nothing new about these measures.