BSR delays expected to trigger wave of litigation
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Delays caused by the Building Safety Regulator (BSR) are beginning to spark serious concern across the construction industry, with many projects held up for months and some even becoming financially unviable. As frustration grows, legal experts are warning that disputes over responsibility for these setbacks are likely to escalate into litigation.
In the context of a rapidly evolving regulatory landscape, questions are now being raised about whether the BSR and the current framework are fit for purpose.
“There is inevitably a surge of litigation down the track,” said Sarah Rock, head of construction at London law firm Boodle Hatfield.
She said: “With the eight-year anniversary of the Grenfell Tower tragedy approaching, now is an opportunity for the industry to take stock on the progress made in improving building safety across the country and review what is working, and what is not.”
“The regulatory and policy landscape has changed enormously in the last eight years and contractors, consultants and developers have had to quickly adapt to these shifting and growing regulatory demands. From the Building Safety Act and the Building Assessment Certificates, to the incoming Remediation Access Bill and Building Safety Levy, the scale of new regulation and administrative and financial burdens on the industry cannot be underestimated.”
“In particular, one of the more talked about aspects of the Building Safety Act, the gateways process, has faced an onslaught of criticism from the industry. With reported delays of up to 11 months for projects to gain approval at the gateway 2 pre-construction stage, it is no wonder the industry is growing frustrated.”
“It is hard to imagine a world in which these delays don’t wind up in the courts. Whilst criticism has been directed at the BSR to date, there is inevitably a surge of litigation down the track as projects over run and cost significantly more than initially expected. Developers and contractors are already facing economic headwinds, adding lengthy delays to projects will only drive-up costs further and, in the unlikely event that build costs aren’t higher than expected, the cost of lack of use of the asset for months on end will inevitably hit projections.”
“It is only a matter of time before the blame game begins, and parties involved in HRB projects will be looking to point the finger and establish who can be found ultimately responsible for delays and losses. Who is found liable will of course depend on the agreed terms of the contract, which will likely have been drafted before such delays could have been predicted – possibly months before the delays emerged. Whilst there is some allowance for additional time and money required for delays in receiving approval from a statutory body or relevant authority within the JCT standard form, delays caused by the BSR could not have been anticipated before entering the contract.”
“Only time will tell how such claims will play out in the courts, but one thing is for certain: they will be hard fought. It is likely professional teams will grow far more involved in new projects going forward to avoid parties facing costly litigation and potential claims down the track.”
Read the full article in The Construction Index here.
