The new building safety regime

The original consultation document, amongst other things, proposed:

Designers must:

ensure that, if built, the building work to which the design relates would be in

compliance with all relevant requirements [of the building regulations];

And principal designers must:

Co-ordinate matters relating to the design work to ensure that, if built, the building

work to which that design relates will comply with building regulations.

Contractors are required to ensure similar aspects in connection with any building

work undertaken.

Along with other commentators, we have for some time argued that the absolute

nature of the obligations could not only exacerbate the problems faced within the

Professional Indemnity insurance market, but also, more importantly, mean that

some insureds might face serious insurance hurdles in complying with the new

regime and the contractual terms which will inevitably be created because of it. The

reasons for our view are two-fold:

• Some insureds might not have any insurance protection against civil claims

founded on breach of these obligations because of the ‘negligence only’

triggers in their policies. It is possible to have done nothing ‘negligent’ but still

be liable under the proposed regime.

• Even in situations where the insured does have insurance cover for these

legal liabilities, the added medium to long-term costs of funding these claims

could have a serious impact on the performance of the PI market. In turn,

this could easily lead to further cost increases and/or coverage restrictions

and, in extremis, exclusions for such claims.

Whilst the Government intends to press on with much of the new regime unchanged,

they recognise the potential difficulties with the ‘strict liability’ requirement for

designers and principal designers. The upshot of this is that they plan to delay its

implementation and work with the industry to build sufficient market support.