Simon Lewis, partner in Construction & Engineering at Womble Bond Dickinson, discusses the consultation paper issued by the MHCLG and the legislation that may arise from the recommendations made in the paper.
In June 2019 the Ministry of Housing, Communities & Local Government (MHCLG) issued a consultation paper entitled Building a Safer Future: Proposals for Reform of the Building Safety Regulatory System. The consultation period closed at the end of July, but it is very likely that we will see legislation arising from the recommendations made in the paper within the next 12 months depending of course upon certain other developments which are currently taking up a considerable amount of the government’s time.
The consultation paper has been issued as a result of the findings of the report by Dame Judith Hackitt into the terrible fire at Grenfell Tower. The main recommendations in the Hackitt report were as follows:
- Create a more effective regulatory and accountability framework to provide greater oversight of the industry
- Introduce clearer standards and guidance, including establishing a new Standards Committee to advise on construction product and system standards and regulations
- Put residents at the heart of the new system of building safety, empowering them with more effective routes for engagement and redress
- Help to create a culture change and a more responsible building industry, from design, through to construction and management.
The government’s response to these recommendations is set out in the consultation paper and is likely to result in a very significant change to this aspect of the construction industry. Equally importantly, it is also likely to result in a much more considered and extensive focus on the need to have fully maintained and accessible digital information in relation to the design, construction and operation of the built estate (already widely known as the “golden thread”). The proposals in the consultation paper will apply to all multi-occupied residential buildings of 18m (six storeys) or more. The consultation paper asks a series of questions in relation to the proposals it sets out, but it seems safe to assume at this stage that this provides a fairly clear evidence of the way in which the legislation is likely to be structured.
In this review, I will concentrate principally on chapter 3 of the consultation paper, which sets out the proposals for system reform with new duty holders responsible for duties across the whole life cycle of the building from design to demolition. I will also look briefly at chapter 5, which describes the creation of a new building safety regulator and, briefly, at chapter 6, dealing with sanctions.
Chapter 3 of the paper is structured in three parts:
- Part A – Duties in design and construction
- Part B – Duties in occupation, and
- Part C – Duties that run throughout a building’s lifecycle.
Part A of chapter 3 proposes five duty holder roles for buildings during the design and construction phase which include clear safety responsibilities. These roles are:
- Client (any person for whom a construction project is carried out as part of the business)
- Principal designer (the designer appointed by the Client to control, plan, manage, co-ordinate and monitor the pre-construction phase when most design work is carried out)
- Principal contractor (the contractor appointed by the Client to plan, manage, coordinate and monitor the construction phase)
- Designer (any person who carries out the trade, business or other undertaking in connection with which they either prepare or modify design or arrange for, or instruct any person under their control (including employees or employers) to prepare or modify design); and
- Contractor (any person who in the course of carrying out a business manages or controls construction work (building, altering, maintaining or demolishing a building or structure)).
These roles will be familiar from the Construction (Design and Management) Regulations 2015 (better known as CDM). They can be filled by either an individual, a company or a partnership. It is notable however that the government is considering whether, if these roles are carried out by companies or partnerships, there should still be a single accountable person at board level who can be identified as having responsibility for building safety. The concept of personal accountability is a theme that runs through the consultation paper.
It is proposed that all duty holders should as a minimum be required to cooperate and share information with the building safety regulator, ensure compliance with building regulations, comply with specific regulatory requirements and ensure the people they employ are competent. There may be a further duty to promote building safety and the safety of persons in and around buildings depending upon how the legislation is framed. There will also be role-specific duties for each duty holder. These are listed in Annex C to the consultation paper. Clients will also have the responsibility to make suitable arrangements to plan, monitor and manage building work, including allocation of sufficient time, resources and prioritisation to promote building safety requirements.
Part A then goes on to set out three gateway points at which the relevant duty holder will need to demonstrate that they are managing building safety risk appropriately in order to progress to the next stage of development. The three gateways are:
- Gateway 1 – before planning permission is granted
- Gateway 2 – before construction begins
- Gateway 3 – before occupation begins.
Gateway 1 would be part of the planning permission process and would apply to all multi-occupied residential buildings of 30m or more (unlike Gateways 2 and 3, which apply to all such buildings over 18m), requiring the applicant to submit a “Fire Statement” with their planning application and for the local Planning Authority to consult the Fire and Rescue Authority before granting planning permission.
Gateway 2 requires duty holders to demonstrate how they comply with building regulations by providing full plans and supporting documentation. This would include a 3D model of the building produced by the Principal Designer covering the building “as planned” including the products to be used in the building. In other words this will be a BIM model, part of the emphasis on the use of digital information which runs through the consultation paper as part of the “golden thread”, discussed further below.
Gateway 3 requires duty holders to hand over building safety information about the final, as built building before occupation is permitted. The Client must as a minimum apply for and receive a provisional registration of the building and assure the building safety regulator that building risks have been assessed and arrangements are in place for the building to be operated safely during the occupation phase.
Part B of chapter 3 sets out proposals for a new building safety regime. The intention is to clarify responsibility for keeping buildings safe and that the critical fire and structural safety risks are identified. During occupation, it is proposed that there be introduced a new “accountable person” who would be the duty holder legally responsible for ensuring that building fire and structural safety risks are reduced as far as is reasonably practicable.
The accountable person must register their building or buildings with the building safety regulator, comply with the requirements of a building safety certificate issued by the regulator and carry out, provide to the regulator and comply with a safety case demonstrating how they reduce risk. The accountable person must also name a competent building safety manager and provide them with access to funding necessary to carry out their functions. Notwithstanding any delegation of functions on a day to day basis to the building safety manager, the accountability under the building safety certificate remains with the accountable person. Again, whilst the accountable person may be an individual, partnership or company where the accountable person is a partnership or a company, it is proposed that there should still be a single accountable person at board level. The safety case itself will be reviewed every five years. This will tie in with the requirement to review the registration every five years.
Part C sets out duties that run throughout a building’s lifecycle, extending the safety case approach detailed in Part B. Given that various different persons are going to be responsible for a building during the various phases of its design, construction and operation, continuity of information is important and it is this that gives rise to the now well-known “golden thread” of building information which is to be created, maintained and held digitally to ensure that the original design intent and any subsequent changes to the building are captured, preserved and used to support safety improvements. It is likely that the golden thread will require the use of a common data environment that will allow different parties to work collaboratively on developing and maintaining the information.
In addition to the establishment of this golden thread of information, it is proposed that a key data set is created; a sub-set of building information held in a specified format. This data set is required as part of the golden thread to enable the building safety regulator to analyse data across all relevant buildings. The key data set is likely to include details such as a unique building identifier, its location, its size, building type/purpose, years built and refurbished, façade and structure information and minimal information on safety. Given that the key data set will need to be held in a specified format, the Government intends to mandate compliance with detailed data standards that will specify the formats and naming conventions for the variables in the key data set and the file formats in which the data set should be shared. The key data set should be open and accessible by default. The security-minded approach set out in PAS1192-5 (soon to be superseded by ISO19650-5) will apply to the gathering and storage of this information.
Part C also deals with the duty holder duties covering mandatory occurrence reporting, confidentiality and reporting issues and competency requirements.
Chapters 5 and 6
Chapter 5 of the consultation paper sets out details in relation to proposals for establishing the office of building safety regulator and chapter 6 sets out proposals to improve compliance and strengthen enforcement and sanctions to back up the new safety regulatory framework. It is felt that at the moment there is a lack of enforcement action which therefore provides little deterrence against non-compliance. It is proposed that in addition to reinforcing operating standards and the provision of professional guidance, proactive intervention and monitoring ultimately there will be enforcement action available through formal orders, by penalties or by reviewing the building safety certificate which may, ultimately, lead to revocation.
Sanctions will be both civil and criminal and will involve fixed and variable monetary penalties for building safety breaches. It is anticipated that penalties levied may be considerable for breaches of building safety. This is not precisely defined but a footnote to the relevant paragraph in the consultation paper (362) indicates by way of example HMRC’s power to levy civil penalties of up to 100% of the tax evaded, plus the tax itself and interest on the unpaid sum going back up to 20 years in extreme cases. Clearly, it is intended that the penalties will be severe.
There is a great deal to consider in the consultation paper and it will require substantial primary legislation, but the indications are there that this will happen and will happen relatively quickly. In addition to the enhanced statutory requirements which will be reflected in the new duty holder roles, this statutory framework will become a contractual requirement in all building and engineering contracts. In addition to the civil and criminal penalties proposed, breach of these obligations will therefore be a breach of contract in itself.
The ramifications of the terrible events at Grenfell Tower will be felt for many years to come. A significant result of the tragedy will be the revision of the building safety regulation framework in this area: a tightening of sanctions, a greater emphasis on personal accountability and a clarification of the rights, roles and responsibilities of those that own, maintain and live in multi-occupancy buildings like Grenfell Tower.
An important aspect of this change is the “golden thread” of information, emphasising the need for the industry to understand that a crucial aspect of building safety is not just the need to ensure that buildings are kept in a safe and proper condition throughout their lifetime but also that it is the maintenance of the digital information resource that will enable subsequent owners and users to know the detailed history of the building’s lifecycle. Access to this information will be a major contributor to improvements in building safety in the future.