Partner, Chris Doran, identifies the primary objectives of the Hackitt Report and the Building Safety Act 2022.
I recently had the pleasure of participating in a presentation with both Dame Judith Hackitt and Tracy Keep, of Gallagher insurance brokers, at which we explored the current status of the new statutory and regulatory regime, commented on the progress being made against some of the key objectives identified by the report authored by Dame Judith, and identified some of the challenges and uncertainties that still remained.
In this, the first of a series of articles, I identify the primary objectives of the Hackitt Report and the Building Safety Act 2022 ("BSA 22") and whether those objectives are being achieved. In subsequent articles, we will consider the detail of recent Regulations implementing the gateway, dutyholder and competency regimes.
Objectives of the new statutory and regulatory regime
The primary objectives have identified a number of the key objectives of the new regime. They include:
- ensuring that all high-rise residential buildings and buildings to which the legislation applies are of high quality and safe
- improving the competence of the people involved in the design, construction and refurbishment and management of buildings
- creating a system that provides greater oversight over the design and construction process by a new regulator – the Building Safety Regulator
- ensuring quality standards are met and that the quality standards and method of compliance are clear
- providing residents with information about their buildings and providing them with statutory protections and remedies.
Where are we?
Where are we against those objectives?
Even prior to Grenfell, the number of construction claims were increasing, and the PI insurance market in particular was becoming more challenging. All too often, projects were being procured in haste, with insufficient time being given by employers to designers and contractors to produce co-ordinated designs and to complete the works. Work on site was commencing before designs were complete or coordinated, giving rise to avoidable defects, claims for extensions of time and additional costs.
The construction industry, their lawyers and insurers, didn't take the decisions necessary to address these issues.
As recognised by Dame Judith Hackitt, there has been criticism at the speed that the new regulatory regime has been implemented, resulting in uncertainty for those working in the sector, including their insurers. Nevertheless, Dame Judith was firmly of the view that the new regime should be considered as a journey and not a one-stop reform. As the purpose of the regime has been clear, there has been no excuse in delaying changes in behaviour and practice and in adopting a new collaborative culture.
On the 1 October 2023 the government brought into force three new Regulations which, together, implement a more stringent building control regime for higher risk residential buildings. These Regulations are:
- The Building (Higher-Risk Buildings Procedures) (England) Regulations 2023
- The Building Regulations etc. (Amendment) (England) Regulations 2023
- The Building (Approved Inspectors etc. and Review of Decisions) (England) Regulations 2023
We will take an in-depth look at these Regulations in subsequent articles. In short, they:
- set out the obligations and competency requirements for the dutyholders
- establish the Building Safety Regulator ("BSR") as the only Building Control Authority for higher risk buildings ("HRBs"); and
- provide details of the building control regime for HRBs, including what information must be provided in Gateway 2 and 3 applications.
The new statutory and regulatory regime provides the whole industry with the opportunity to adopt a new culture which will not only impact the design, procurement, construction and management of HRBs, but other types of project as well.
Organisations such as the BSi have undertaken a lot of work to create a suite of national standards that dutyholders should comply with, and have created training courses to assist those charged with ensuring the safety of buildings. The aim is to raise competency across the built environment sector, with a focus on Principal Designers, Principal Contractors and those responsible for the management of buildings.
Prior to the publication of the detailed dutyholder obligations, guidance was given on the required competency thresholds, required behaviours, and on how to ensure knowledge of the relevant statutory and regulatory requirements and management processes.
The Building Regulations etc. (Amendment) (England) Regulations 2023 now set out the competence requirements of dutyholders. This is likely to result in the publication of further guidance on how these should be achieved and the behaviours and practices that need to be adopted.
Quality standards – compliance with Building Regulations and gateways
One of the criticisms contained in the Hackitt report was that previous building standards were too complex, not understood and not read.
In order to achieve higher standards, there must be clarity on:
- the standards that need to be met; and
- the method of compliance.
Even prior to the commencement of the BSA 22, the government started the process of amending Building Regulations in an attempt to provide greater clarity on standards to be achieved. Nevertheless, the Building Regulation regime is still based upon the old regulatory framework and interrelationship between part of the Building Regulations and the Approved Documents.
Accordingly, there is still some uncertainty as to what constitutes compliance. Whilst Approved Documents are used as guidance, they are only evidence of compliance with the underlying Building Regulations, (see s. 7(1) of the Building Act 1984). Compliance with the Approved Documents does not constitute compliance.
Part 3 of the BSA 22 sets up a system of gateways to ensure that building risks are considered at each stage of the design and construction of higher risk buildings. Dutyholders can't pass between gateways without the approval of the BSR.
The gateway regime, which finally came in to force on 1 October 2023, is one method of seeking to improve quality standards by providing regulatory oversight to the planning, design and construction process. All too often, prior to Grenfell and after, projects progressed prematurely without all of the necessary designers contributing to the design solution, and prior to all of the engineering issues being resolved, only for defects to arise subsequently. The gateway regime is designed to overcome this.
Gateway One (at planning stage) has been in force since 1 August 2021. Gateway Two (before building works begin) and Gateway Three (when the building is complete) were implemented on 1 October 2023. The Regulations mentioned earlier in this article state that the BSR will be the sole Building Control Authority for HRBs, set out the procedure to obtain approval from the BSR to progress between gateways, and set out the information required to achieve approval to progress between gateways.
The purpose of the dutyholder regime is to provide "rigorous and demanding dutyholder roles" which are clear and carry effective sanctions for poor performance.
The need for clarity on what is expected of each of the dutyholders is a key element of the reforms, and the obligations owed by each dutyholder are set out in The Building Regulations etc. (Amendment) (England) Regulations 2023.
With the issue of the new Regulations mentioned earlier, the government has started to provide some clarity on the nature of the dutyholders' obligations.
Nevertheless, questions remain, including whether the new regulatory regime creates a new collaborative and transparent culture? We will discuss this in further detail is subsequent articles, but a major step forward has been taken. The new regulatory regime requires dutyholders to:
- ensure that they provide sufficient information about their work to the other dutyholders
- cooperate with other dutyholders so as to ensure that the design, if constructed in accordance the design, will achieve the relevant requirements, and
- the Principal Designer must ensure that the design is fully coordinated.
Failure by a dutyholder to comply with their obligations will expose them to criminal sanction. On top of that, DLUHC and local authorities are using the powers given to them under the BSA 22 to ensure that dutyholders comply with their obligations.
Duties of the accountable person
The Accountable Person is usually the organisation that owns or manages a HRB and is a particularly important role. They will be responsible for:
- taking all reasonable steps to prevent a building safety risk, i.e. a fire safety risk or structural failure
- reducing the seriousness of an incident should one occur
- preparing a case safety report – this must identify fire and structural safety risks and how risks are to be managed.
The Higher-Risk Buildings (Management of Safety Risks etc) (England) Regulations 2023 detail procedures which the BSR, Principal Accountable Person, Accountable Persons and residents must follow during the occupation phase of HRBs. Some key obligations include:
- the need to obtain a Building Certificate prior to occupation
- registration of higher risk buildings
- duty to display certain information
- duty to produce an assessment of building safety risks
- duty to prevent building safety risks
- duty to provide maintain prescribed information and provide this to residents.
Challenges and uncertainties
The Hackitt report talked about dutyholders having an obligation to "ensure" that dutyholders complied with the relevant Building Regulations. The courts, in cases such as and more recently in MT Hojgaard A/S v E.ON Climate and Renewables UK Robin Rigg East Ltd  UKSC 59, Martlett Homes Ltd v Mulalley & Co Ltd  EWHC 1813 (TCC) and LDC (Portfolio One) Ltd v George Downing Construction Ltd  EWHC (TCC), have showed a willingness to interpret contracts in a way that has imposed strict obligations on the part of designers to comply with certain standards - such as Building Regulations - which has had the potential to affect the availability of professional indemnity insurance. The latest Regulations contain obligations that are drafted as a need to take reasonable steps. Others are formulated as absolute requirements, (i.e. a duty to ensure that that work is undertaken in accordance with requirements). In that sense, they mirror the nature of the duties set out in many of the standard forms of contract.
There is also an obligation on dutyholders to consider whether
other disciplines affect the performance of their obligations. In
that way, the Regulations are attempting to create a culture of
There are still many obstacles. These include:
- the new statutory and regulatory environment is extremely complicated
- the wording of standard forms will need to reconsidered in order to reflect the changes that have been implemented
- will standard forms of contract/appointments expressly adopt these obligations to supplement liability under statute?
- how will the insurance industry respond to these reforms? Currently, policy wordings with requirements not to make admissions of liability could be considered inconsistent with the new culture of collaboration and transparency that is being promoted by these reforms
- some stakeholders in the construction industry have been slow to embrace the change of culture required. This will need to change, and the insurers will need to satisfy themselves of this.
We will consider some of these challenges in subsequent articles. But what is certain, however, is that the conclusions in the Hackitt Report and the government's response provides the industry and its insurers with a real opportunity to improve not merely building safety, but the method of how projects are procured, designed, constructed and managed. All stakeholders must embrace this change.
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