Two recent High Court cases consider the role and potential liabilities of approved inspectors in claims brought by the owners of a defective building: Zagora Management Ltd v Zurich Building Control Services Ltd [2019] EWHC 140 (TCC) and Heron's Court v NHBC Building Control Services Ltd [2018] EWHC 3309 (TCC). To the disappointment of property owners, and perhaps the relief of insurers, these cases demonstrate the difficulties claimants face in succeeding against inspectors.
The approved inspector regime was introduced by the Building Act 1984. Before this, it was only local authorities that could provide inspectors for the purposes of enforcement and certification of compliance with the Building Regulations; but the 1984 Act essentially permitted the privatisation of this service.
At the time the act was passed, Anns v Merton LBC [1978] A.C. 728 was good law. Any inspector potentially owed a duty of care in respect of the economic loss caused by any defect in a building that they had not spotted in a negligent inspection and certification. However, in Murphy v Brentwood DC [1991] 1 A.C. 398, the House of Lords overturned Anns, and decided that local authority building control inspectors did not owe any such duty.
Since then, there had been almost noreported cases involving civil claims against approved inspectors, the only exception being Tesco v Wards Construction [1995] 76 BLR 94, where the claim failed.
But the proliferation of issues relating to non-compliance with the Building Regulations, in particular fire-stopping problems, has led some parties to reconsider whether there may be a valid claim against an inspector for wrongly issuing a Building Regulation certificate.
However, the claims against the approved inspector in Zagora made by freeholders and leaseholders of two blocks of flats were dismissed. This was despite the court finding that the inspector had made misrepresentations in the Building Regulations final certificates that he knew to be false – particularly regarding fire safety. The court found on causation that the claimants had not relied on the certificate in making their purchases.
Furthermore, the property owner in Heron's Court claimed under the Defective Premises Act 1972 section 1(1), which places obligations on those who take on work 'for or in connection with the provision of a dwelling'. The court held that this provision did not apply to an approved inspector since, what they are 'contributing to is the aim of ensuring that the building is lawful'.
Both cases serve to reiterate the difficulties for claimants in succeeding against approved inspectors in tort. Some have asked why private inspectors should be treated differently to other professionals involved in construction projects, given they must be insurance-backed and they issue certificates on which purchasers will, at least in some cases, rely. The courts' current position seems to lie in the nature and historical development of the role.
First, the role of an approved inspector or local authority pursuant to the 1984 Act and Building Regulations is seen as relating to regulatory certification, primarily aimed at health, safety and welfare of persons, rather than involvement in the 'provision' or construction of a building.
Second, as Mr Justice Waksman pointed out in Heron's Court, it may make little sense to allow a claim against a private approved inspector carrying out Building Regulation inspections when a claim against a local authority performing precisely the same function would be barred.
Both cases appear to shut the door on negligence claims for economic loss and claims under the 1972 Act against an approved inspector. Unless and until section 38 of the 1984 Act is brought into force, which would give parties a direct cause of action for breach of the Building Regulations, or approved inspectors are willing to give collateral warranties to purchasers, it appears that any parties wishing to take action against an approved inspector will only be left with the difficult route of making a claim in deceit or fraudulent misrepresentation.
Paul Bury is a barrister at Keating Chambers pbury@keatingchambers.com
Related competencies include: Legal/regulatory compliance