Building Safety Act 2022 (legislation.gov.uk)
Context
The detail of this article has been sourced from Pinsent Masons useful and informative Out-Law online resource.
On 28th June 2022 the implementation of the 2022 Building Safety Act (BSA) reached a key milestone, when changes to the limitation periods for claims brought under the 1972 Defective Premises Act (DPA) came into force. Under the Act, there is an obligation to construct any dwelling in a workmanlike manner using proper materials so that, when completed, the dwelling is fit for habitation. One of the most controversial aspects of the BSA, the reform will require businesses in the construction industry to review their positions under the new regime and to consider their insurances.
Key points to note
- The BSA amends the limitation period in which a potential claimant can bring a claim under the DPA from six years from completion of a dwelling, to either a 30-year limitation period for dwellings completed before 28th June 2022, or 15 years for dwellings due to be complete after 28th June 2022.
- The BSA also introduces a new prospective right of action against any person who “takes on work in relation to any part” of a dwelling. This means that claims may now be brought in respect of any refurbishment or remedial works completed on an existing building after 28th June 2022, subject to the new 15-year limitation period.
- This represents a widening of the scope for potential liability, often long after the right to bring an action under contract or in negligence has expired. Importantly, for dwellings completed as far back as June 1992, it opens up the possibility of a claim under the DPA that prior to the introduction of the BSA would have been considered time barred.
- Businesses in the construction industry should consider whether they have sufficient warranty and insurance protection to cover the extended limitation period for existing projects. Parties may be exposed where the limitation for liability under the DPA extends beyond existing warranties and insurance policies agreed under contract. Supply chain warranties should also be considered.
- When negotiating new contracts, businesses should consider the new limitation periods, and ensure that sufficient guarantee, warranty and insurance protections are in place.
Next actions
This article is provided for information and awareness, but insurance brokers with construction industry clients should be aware of the implications of the implementation of this element of the BSA in order to assist your clients and provide appropriate advice and guidance. It may also be appropriate to contact construction clients to ensure that their existing insurance arrangements are sufficient.