黑洞社区

The measures contained in the 黑洞社区 Safety Bill just published are unlikely to come into force until 2021, and while long lead-in times may be built into the legislation, we need to start preparing now. A lot of the detail in the bill, which aims to improve building and fire safety in higher-risk buildings, has been left to the regulations that will follow once parliament has passed the bill. However, there is some guidance that we can consider now.

The bill 鈥� which is designed to enact the recommendations in Dame Judith Hackitt鈥檚 2018 黑洞社区 a Safer Future report following the 2017 Grenfell Tower fire 鈥� overhauls the building control regime for all multi-occupied residential buildings of a prescribed height, which is likely to be 18 metres above ground level or six storeys. Its key measures are as follows:

The new regulator

The bill provides for a 黑洞社区 Safety Regulator which will sit within the Health and Safety Executive. The government has already taken steps to set this up. The regulator will have wide-ranging duties and functions, including taking over the building control regime for higher-risk buildings, enforcing sanctions for non-compliance, improving the competence of those working on those buildings and overseeing the safety of those buildings in occupation. The regulator will be self-funded from the fees and charges it will levy, but the level of those fees is left to be set in the subsequent regulations.

Sanctions

One of the most important aspects of the bill is the clarity on the sanctions for breaches of the new regime. Arguably it strengthens existing sanctions and introduces new ones. For example, it extends prosecutions for contravention of building regulations from two years to 10 years and the requirement to correct non-compliant work from one year to 10 years. The regulator can issue compliance notices if there has been, or is likely to be a breach of building regulations, as well as stop notices during the design and construction phase that require work to be halted until serious non-compliance is addressed, with penalties set for contraventions of either notice. There are also offences for giving false or misleading information to the regulator. The penalties include up to two years in prison, unlimited fines or both. In respect of offences committed, those in senior roles in companies can also be liable if an offence is committed with 鈥渢heir consent or connivance鈥� or is attributable to their neglect.

This bill will be the most significant regulatory reform in the built environment sector for years, but it will be a missed opportunity if the regulator fails to take a proactive approach to enforcing sanctions for contravention. Whether this will happen is likely to depend on the funding and resourcing of the regulator.

One point discussed in the consultation that has not been brought in is a civil liability for breach of building regulations, and the exclusion of this will close off avenues for potential claimants. Again, this could be a missed opportunity for holding those in breach to account.

Duty holders

Along the lines of the CDM regulations, the duty holders include the client, the principal designer at the design phase, the principal contractor in the construction phase and the accountable person (usually the owner) at the occupation stage. Duty holders will be required to submit key information to the 黑洞社区 Safety Regulator to demonstrate how the building, once built, will comply with the requirements of building regulations.

Gateways

The new system is divided into gateways, with the information being assessed at each gateway by the regulator:

• Gateway 1 鈥� at the planning application stage. The required information will be provided by those applying for planning permission for developments.
• Gateway 2 鈥� at the initial building control stage (akin to depositing full plans). Gateway two provides a 鈥渉ard stop鈥� where construction cannot begin until the regulator is satisfied that the duty holder鈥檚 design meets safety requirements.
• Gateway 3 鈥� equivalent to the current completion/final certificate phase. All the prescribed documents and information (Hackitt鈥檚 鈥済olden thread鈥� of information) must be handed over to the accountable person. Duty holders will be required to submit to the regulator prescribed documents and information on the completed building.

The later, detailed regulations will set out the regulator鈥檚 powers in terms of inspecting the works, details of the information required and time periods for making decisions.

We are likely to see Gateway 3 being linked to achieving practical completion and contract clauses that seek to allocate the time and cost risk of complying with the regulatory requirements. Undoubtedly, we will also see practical completion being linked to the prescribed information being provided, and clients are unlikely to waive this going forward. Clients may also impose requirements on the use of BIM, given that the required information is going to be required electronically.

Competence

The bill makes provision for regulations for competence of those taking on work that needs to comply with building regulations. This is not limited to work on higher-risk buildings. The requirements for competence are left for the secondary legislation, but the government is going to publish a guidance document and the BSI will issue standards in due course. Companies should take steps now to put in place management of training processes and ensure staff are adequately trained in areas they work in. Clients will also have a duty to check the competence of those they instruct to undertake works.

Mandatory occurrence reporting system

It will be obligatory to report to the regulator any structural and fire safety occurrences that could cause a significant risk. Businesses will need to put in place internal processes to enable them to comply with their reporting obligations.

The legislation will have implications for insurance, given the new duties and obligations under the new regime. The scope of appetite among insurers 鈥� and the consequential effect on prices 鈥� to cover those working on higher-risk buildings remains to be seen. Regardless of what the insurance position turns out to be, the obligations described by the bill cannot be easily passed downwards and there is a heavy weight of responsibility on the accountable person, who will be required to apply for the 黑洞社区 Assurance certificate.

There is also the possibility that the secretary of state may widen the scope of the provisions for higher-risk buildings but, as the bill makes clear, the more stringent regime applies to all buildings. As such, from all angles, given the scope of the changes and the sanctions for non-compliance, the construction industry should take steps now to prepare for the changes, especially given that the transition period is as yet unknown.

Theresa Mohammed is a partner in dispute resolution and litigation, Rebecca Rees a partner in real estate and co-head of the public procurement practice, and Helen Stuart a senior associate at Trowers & Hamlins

Theresa Mohammed is a partner in dispute resolution and litigation, Rebecca Rees a partner in real estate and co-head of the public procurement practice, and Helen Stuart a senior associate at Trowers & Hamlins