Following the Grenfell Tower disaster and the Dame Judith Hackitt review, attention focused on serious failings in parts of the construction industry, particularly in high-rise buildings.
One of the underlying problems was that some defects do not become apparent until many years after work is completed. The RICS gives examples of such latent defects as foundation failure, structural movement, and concealed plumbing or drainage faults.
The Government’s response was to extend the period during which claims can be brought – from the usual six years to fifteen. The extension of liability is not limited to the original parties to the work. Claims may be brought by later owners or others who suffer loss as a result of the defect. In effect, responsibility for the work can follow the building, not just the contract. A homeowner may commission a relatively modest alteration, sell the property a few years later, and still face questions about that work long after they have moved on.
That immediately raises a difficult question: what work should this longer liability apply to?
In practice, it is not easy to draw a clear boundary. A defect may be hidden or visible, or a mixture of both. A pipe, for example, may run partly within walls and partly exposed. A fault may arise in the concealed section but only become apparent later through visible damage. The same type of defect can occur in both large projects and small domestic jobs.
Because these distinctions are difficult to apply in law, the Government drew the line elsewhere. The extended liability was linked to work falling within the Building Regulations. At the same time, the period during which local authorities can take enforcement action was extended from one year to ten.
That choice has obvious consequences.
The Building Regulations do not apply only to major developments. They govern a wide range of work carried out by small builders, maintenance contractors, and householders working on their own homes. By linking liability to this framework, the extended 15-year exposure now reaches far beyond the large projects that prompted the original concern.
At first glance, that may seem entirely reasonable. Building work should meet proper standards.
The difficulty is that the Building Regulations are not like the Highway Code. Except in limited cases, they set out the result to be achieved rather than prescribing exactly how the work must be done. Builders are required to exercise judgment – taking account of ground conditions, existing structures, and the work of others. Those judgments can now be revisited many years later.
Nor is liability confined to the original client. Claims may be brought by later owners or others who suffer loss as a result of the defect. In effect, responsibility can follow the building, not just the contract.
The position is made more complex by the fact that liability does not depend on whether the defect could reasonably have been identified and remedied earlier. A problem present from the outset may still give rise to a claim many years later, even if it might have been discovered and put right at an earlier stage.
The passage of time creates a further complication. Buildings do not remain unchanged after completion. Maintenance may or may not be carried out. Other contractors may alter or extend the original work. A heating system may be replaced, circuits modified, or pipe work rerouted.
In those circumstances, establishing responsibility becomes increasingly difficult. The longer the period, the more the original work is mixed with subsequent changes.
The result is a regime that was shaped by large-scale failures but now applies equally to ordinary domestic work – where the practical realities are very different.
Next month’s article will look at how builders, homeowners and insurers are responding to this extended liability – and some of the unintended consequences that are beginning to emerge.
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