On 1 December 2020 the Court of Appeal handed down judgment in Pimlett v Curo Places Limited EWCA Civ 1621 where prior judgments in the First-tier Tribunal and the Upper Tribunal were overturned.
As discussed in a previous instalment of our series on the proposed Building Safety Bill (the “Bill”), a key element of the Bill is the establishment of a duty holder regime and requirement to maintain the ‘golden thread of information’ throughout the life cycle of high-risk residential buildings (“HRRBs”). The golden thread of information must also be provided to the Building Safety Regulator (the “Regulator”) at key gateways. The statutory obligation to maintain the golden thread of information creates risks that will need to be managed, particularly where social housing providers are commissioning the construction of new HRRBs.
The reporting gateways and the golden thread of information
The Bill establishes the following three “reporting gateways”, at which the relevant “duty holder” is required to provide the golden thread of information to the Regulator:
|Planning Application||Principal Designer|
|Construction Phase||Principal Contractor|
If the golden thread of information is not provided, or if upon review of the information the Regulator decides that the golden thread identifies building safety issues, then the Regulator can prevent the building lifecycle from progressing through the gateway to the next phase. Failure to provide the golden thread of information, or provision of information which identifies building safety issues, therefore has the potential to delay or prevent the construction of new HRRBs, and potentially prevent the occupation of HRRBS once construction works are completed.
Who carries the risk at each gateway?
A key question for employers, designers, and contractors alike is what happens when the Regulator does not grant permission to progress through a gateway. The two scenarios that will be of concern to social housing providers are where:
- The Principal Designer fails to provide the golden thread of information to the Regulator, or provides information which shows that that the HRRB design poses a risk to resident safety, in consequence of which the Regulator denies permission to commence construction; or
- The Principal Contractor fails to provide the golden thread of information to the Regulator or provides information which shows that that the HRRB as constructed poses a risk to resident safety, in consequence of which the Regulator denies permission to occupy the building.
At present, design team appointments and building contracts do not expressly allocate these risks, nor will they include obligations to collate or provide the golden thread of information. Social housing providers will need to consider risk allocation in advance of the Bill passing into law, and it is likely that new contractual mechanisms will be needed in relation to the golden thread of information and the duty holder regime.
While the content of the golden thread of information has not yet been conclusively determined, at the practical completion gateway it is likely to include as-built drawings, operation and maintenance (“O&M”) files, and health and safety (“H&S”) files, amongst other documents. Social housing providers familiar with new-build programmes will be aware that contractors can be slow to provide as-built drawings and the O&M and H&S files. We are also aware of instances where contractors have never provided complete sets of these documents.
This raises questions about how social housing providers can manage the risks arising from the scenarios identified above, and what new contractual mechanisms are appropriate to incentivise performance by their design team and contractors. For instance:
- Should the principal designer be expressly liable for design changes required by the Regulator, or for overrun costs and losses incurred by social housing providers flowing from delays in commencing construction of an HRRB due to a failure to provide information to the Regulator, or providing information in which the Regulator identifies a building safety issue?
- Should certification of practical completion be linked to the Principal Contractor providing of the golden thread of information to the Regulator, or to permission by the Regulator to occupy the building?
- Should release of the retention be linked to the Principal Contractor’s discharge of this obligation?
- Once practical completion is certified, it cannot be revoked, and social housing providers are advised to consider whether defect rectification provisions in building contracts need to be updated to refer to instances where the Regulator refuses to permit occupation of a newly constructed HRRB due to a building safety issue, and who carries the cost of those rectification works (which may fall outside the scope of current defect mechanisms.
Any loading of these new regulatory risks onto principal contractors and principal designers is likely to be reflected in increased costs from those parties, and it is not yet clear whether professional indemnity insurers will agree to cover the duty holder regime under professional indemnity policies. Nonetheless, the new duty holder regime raises significant risks to the construction of new HRRBs and social housing providers are encouraged to consider these risks before the Bill becomes law.
For more information
Our fire safety experts are experienced in advising social housing providers on building safety issues. We also provide training for social housing providers regarding building safety issues. If you have any questions in relation to the points raised in this ebriefing please contact Beulah Allaway. If you have questions in relation to this series of ebriefings, or would like to find out more about our bespoke training programme, please contact Kieran Binnie.
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