Under Construction: Legal Developments Within The UK Construction Industry | March 2024 – Construction & Planning

Landmark decision rules against building owner in first
contested remediation contribution order

The first contested application for a remediation contribution
order (RCO) under the Building Safety Act has been handed down in
Triathlon Homes v SVDP & Get
Living, which clarified that RCOs can be made against a
party that was not the original “wrongdoer”.

The decision provides guidance on when RCOs will be made and the
types of losses that they cover, and will be of particular interest
to developers and building owners.

Read more about this decision in this Insight.

A key focus of the tribunal was on whether it was “just
and equitable” for an RCO to be made. It concluded that
such orders were not concerned with the fault of any one party.
They were an independent remedy which places the burden of
remediation on developers and landlords deemed to have the broadest
shoulders on which to bear the (often very substantial) costs. This
is despite the fact that the costs were incurred due to the fault
of others. The decision is being appealed by the building owner,
who commented that the judgment was “fundamentally
flawed“.

“What next for Building Safety
Disputes?” was explored by Rebecca Francis and Emily
Clements in a recent webinar as part of Osborne Clarke’s
Disputes Week. Watch on-demand
now.

New Building Safety Levy consultation

In January, the government issued a third consultation on its proposals for the Building
Safety Levy which will be introduced under the Building Safety Act.
The levy will be imposed upon developers of qualifying buildings in
England as a means of recouping some of the funds distributed for
the remediation of building and fire safety defects in the
aftermath of the Grenfell disaster.

While the government’s initial intention was for the levy to
apply to higher-risk buildings only, the scope envisaged in the
consultation includes all residential buildings requiring building
control. Though this is subject to some exceptions, the new scope
of the proposed levy is broad and includes purpose-built student
accommodation and build-to-rent properties. Under the current
proposals payment of the levy will be a condition of receiving
building control sign-off.

The consultation closed on 20 February and the government’s
response is now awaited. No timeline for the implementation of the
levy has been provided to date.

In other building safety news, the Welsh government recently
published regulations which amend the building control regime in
Wales from 6 April 2024. The regulations primarily involve a shift
from the previous system of building control professionals to the
new regime of registered building control approvers and registered
building control inspectors. They also make transitional provisions
relating to building control and the function of building control
professionals, creating a transitional regime that operates until 1
October 2024.

Biodiversity net gain regime comes into force

The new biodiversity net gain regime, which imposes mandatory
requirements for developers to evidence a net gain in the
biodiversity of a site it is developing, came into force last
month. From 12 February 2024, a minimum biodiversity net gain of
10% will be a statutory requirement which applies to the majority
of planning applications.

Developers will now have to consider how best to deliver and
maintain the gain and are facing additional costs as a result of
the changes. This may result in landowners charging a premium on
developments where achieving a 10% gain is more
straightforward.

Read more in this Insight.

Building the Future Commission: the Long-term Plan for
Construction

Building magazine has published a major report titled “The Long-Term Plan for
Construction” to mark its 180th anniversary. The wide-ranging
report makes recommendations on 11 key challenges facing the UK
construction industry, including structural changes to government,
reforms to public sector procurement, planning system reform and
introducing whole-life carbon regulation.

The recommendations include changes to regulation, policy and
industry practices. One of the principal issues the report
considers is the decarbonisation of the construction industry and
the need to improve the performance of existing built environment
stock in line with the UK’s net zero 2050 commitment.

While investors generally perceive climate change as a financial
risk and the majority of companies want to occupy net zero
buildings to meet their corporate social responsibility
obligations, other sectors of the industry continue to lag behind.
Reasons for this range from the additional costs involved when
utilising sustainable solutions to a lack of knowledge and skills.
For example, the sustainability performance of new-build housing is
almost entirely driven by building regulations.

The report offers a number of potential solutions, including
whole-life carbon regulation, for which it recommends the
government should:

• Introduce Part Z of the Building Regulations to regulate
  embodied and whole life carbon as soon as possible, together with
  an industry-backed knowledge hub, to set and support the standard
  for net-zero targets for different building types currently being
  developed at industry level.




• Require mandatory reporting against industry-wide baselines, to
  force rapid change throughout the supply chain. Manufacturers
  should provide environmental product declarations, or equivalent,
  for all products so that carbon can be considered more easily and
  accurately reported in the procurement process. Transparency around
  contractors’ contributions to embodied carbon and energy
  performance will help incentivise early design development by
  leveraging the advantages of design for manufacture and assembly,
  thus reducing contractor “risk pricing” at tender stage.
  Further incentivisation could be realised by embedding minimum
  requirements in contracts in respect of such baselines.




• Increase investment in research and innovation, beyond the
  scope of the Construction Innovation Hub and develop and promote
  further industry and sector-specific knowledge hubs such as the
  National Retrofit Hub (which was set up to identify housing
  retrofit best practice and fill in the gaps in knowledge
  areas).

At the heart of the proposals sits the requirement for the
government (as the industry’s largest client) to lead by
example and reform procurement. The report suggests that long-term
frameworks should be established to promote greater efficiency
through standardisation and that projects should be audited to
ensure the above principles are adhered to.

Ultimately it is clear that in order for the industry to be
successful in achieving net zero targets in future, early
engagement throughout the whole supply chain will be essential.

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