The Building Safety Act: Changes to the Limitation Period Under The Defective Premises Act 1972

It has recently been announced that the Building Safety Bill is being brought into force as The Building Safety Act 2022 (the “Act”) and will extend the limitation period in respect of when a claim can be brought under Section 1 of the Defective Premises Act 1972 (the “DPA”).

Section 1 of the DPA essentially provides that “a person taking on work for or in connection with the provision of a dwelling . . . owes a duty” to a person who it is provided to the order of and any person that acquires an interest in the dwelling (i.e. any subsequent purchaser / leaseholder) to “see that the work . . .  is done in a workmanlike, or as the case may be, professional manner, with proper materials, so that … the dwelling is fit for habitation when the work is completed”.

1. What are the changes to the time limitation period under Section 1 of the DPA?

The Act will extend the time limitation period for bringing claims under the DPA:

• from 6 to 30 years for work already completed before the relevant provision of the Act comes into force i.e. retrospectively (which given the current timeline for the Act will mean capturing liability for works dating back as far as mid -1992); and
• from 6 to 15 years for future work carried out after the enactment of the Act i.e. prospectively.

2. How will the changes to Section 1 of the DPA impact consultants?

Section 1 of the DPA does not only apply to contractors “taking on work” but also to designers “taking on work” (whether or not they are formally qualified professional consultants). This means consultants, including amongst others, architects and structural engineers, owe a duty under Section 1 of the DPA (but not including a local authority or approved inspector carrying out their statutory duties as they are expressly carved out) to any person who originally commissioned the dwelling and any person subsequently acquiring a ‘legal or equitable interest’ in the dwelling, such as the freeholder of a block, a homeowner, or a leaseholder. The pool of potential claimants is very wide.

The extension of the liability period means that under a simple contract the time limitation period in respect of liability under Section 1 of the DPA which would normally be 6 years from the date of breach (with a long stop date of 15 years for claims in tort for latent defects) would be extended to 30 years for retrospective work and 15 years for prospective work. It is anticipated that employers may seek to extend time limitation provisions in consultants’ appointments to reflect the changes to the DPA (potentially even looking to sneak in a longer period for claims not relating to the DPA).

Following these changes, a number of claims which had previously been statute barred will now be within the limitation period, meaning that there is a risk that there will be a greater number of claims brought. However, following the Grenfell Tower disaster, there has been a significant amount of scrutiny on the fire safety of existing buildings, so it remains to be seen whether in reality the change will actually give rise to a flurry of further claims.

Given that the professional indemnity insurance market has been significantly reducing the cover available in respect of fire safety issues, there could well be situations where consultants are faced with claims relating to historic fire safety issues in respect of which their insurance policies will not respond (or where aggregate sub-limits are quickly eroded).

It should also be noted that liability under the DPA is a strict liability and therefore does not require proof of negligence or fault to bring a claim, so those consultants whose polices are “negligence” based will only be covered so far as they have been negligent. However, a dwelling being unfit for habitation suggests a fairly high threshold, so insofar as claims against consultants are concerned, we would hope that claims where there has been no negligence would be rare.

Note also that for future work, the Act will significantly expand the type of work that is subject to the duty under the Defective Premises Act 1972 to include not only new buildings but also refurbishments to existing buildings.

In addition to the changes to the DPA, Section 38 of the Building Act 1984, meanwhile, will provide a statutory right of action to anyone suffering damage as a result of a breach of the Building Regulations. This provision has been on the books for a while but is not yet in force.

We recommend that consultants consider the time limitation periods in appointments and seek legal advice if necessary to ensure their positions are protected.