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Proposed Defective Premises (Northern Ireland)

Posted: 17th June 2024

The Construction Professionals Council of Northern Ireland (CPCNI) recognises that the proposed changes to the current Defective Premises (Northern Ireland) Order 1975 and the Limitation (Northern Ireland) Order 1989 have been brought forward with good intentions and we support the Executive’s desire to act quickly and all our member organisations share the desire to see improvements in building safety and quality. However, we are extremely troubled that use of the ‘Accelerated Process’ has effectively reduced the amount of scrutiny and rigour that is required for the proposed legalisation, to a level that is unacceptable to ensure that the proposed legalisation is ‘safe’ and will achieve the desired outcomes. We are also concerned that the proposed Bill has been drafted based on an extract from the Building Safety Act 2022, which is intended to address the wider issues resulting from the Grenfell tragedy.

The CPCNI has a number of specific concerns about the proposed legalisation; we are seriously concerned that the legislation has not taken account of the following issues and potential problems that may arise following the passing of the proposed Bill:

1. In relation to the 5 high rise buildings were applications funds from the Building Safety fund for remediation of cladding on buildings that are considered unsafe.
We understand that there are hundreds of apartment owners in these 5 buildings (and a call has gone out for more, as up to 10 were originally identified) who cannot and have not been able to sell apartments and have been ‘trapped’ in buildings that are deemed to have, unsafe cladding since 2018, who now see ‘light at the end of the tunnel’ via the Building Safety Fund. We also understand one of the conditions for receipt of funds is that all other avenues for redress have been exhausted. The proposed retrospective legislation, which opens up a potential further avenue for redress, may impact those applying to the Building Safety Fund. If those apartment owners have to pursue their losses using the proposed Defective Premises Bill, this
is going to delay the remediation of their properties.

2. The Defective Premises Bill only applies to those carrying out ‘work’ on a building. Carrying out ‘work’ means building or design work i.e. contractors and designers and NOT suppliers or manufacturers of defective materials (such as MICA blocks) as they do not carry out ‘work’.
The current proposal has the unintended consequence of creating a significant
disparity in Northern Ireland that disadvantages the N.I. construction industry in a manner that the GB industry has NEVER been exposed to. NI mainly consists of small builders and small professional practices (Architects/Designers/Engineers/

Building Surveyors) who will be exposed to risks that the English construction industry (which is much larger and has arguably broader shoulders to suffer such actions) has never been exposed to.

3. A potential issue is the inability for designers to obtain 30 year ‘run-off’ insurance cover, which may create a real risk that people will attempt to make claims under the Defective Premises Bill which may be successful, but where there is no money to pay any award. In England, we have seen that professional indemnity insurers are indeed not willing to underwrite retrospectively to a term of 30 years; this expectation is unrealistic and unreasonable.

The vast majority of professional service providers within Northern Ireland do not operate very large companies and are mainly micro SMEs (up to ten) or sole practitioners. They will simply not have the capital to fund uninsured losses for remedial work over which they had no influence or control, nor the cost of dealing with claims.

4. The proposed Bill does not appear to make provision for Companies limiting
liability by establishing a Special Purpose Vehicle (SPV) to deliver a particular development. The Bill will not hold suppliers of defective materials retrospectively liable and that construction companies that established SPVs will fall outside the reach of the legislation. In England the Building Safety Act introduced Building Liabilities Orders to give the courts the power to go behind the ‘corporate veil’ and also hold material suppliers to account for defective materials. This is particularly relevant in Northern Ireland as there is a risk of mica issues emerging.

Therefore to avoid this proposed Bill creating unsafe and unworkable legalisation, we requested that Minister for Communities should pause the progress of the Bill through the Assembly and allow for:

  • a full consultation with the construction industry as a whole and in particular
    with all the relevant professional organisations
  • a detailed consultation with the insurance industry and legal experts to arrive at workable solutions which avoid targeting innocent parties
  • a review and inclusion of the wording to precisely define the defects intended to be addressed.

This approach would help avoid the creation of loopholes for unscrupulous claims and prevent unrealistic transfers of risk, whilst enabling the market to meet the needs of its clients and provide assurance to both professionals and the public.

The CPCNI represents 21 professional bodies within the Northern Ireland
Construction Sector, with a collective membership of over 9,500 people, employed by hundreds of locally based SMEs. Our remit is to act in the interests of our constituent members, to promote best practice for professional services within the construction industry, including improving the image and increasing the understanding of the services provided by the professions, and to serve society by promoting improved quality and value to clients. We also represent the Construction Industry Council (CIC) in Northern Ireland.