Claims against Approved Inspectors – no-where to go?
Both before and following the Grenfell Tower tragedy, we have dealt with a number of disputes in relation to fire safety and noncompliance with Building Regulations.
We frequently get asked by clients whether, as a developer or freeholder, they can claim for the costs of remedial works against building control if they negligently confirmed that the design or construction of a building complied with Building Regulations?
In respect of claims against local authority building control (LABC), the short answer is no. There is no contract with LABC and so there can be no claim for breach of contract. Furthermore in Murphy v Brentwood DC, the courts shut the door on parties claiming for the costs of remedial works in negligence against LABC, holding that they had no duty in respect of such losses.
However, private companies registered as Approved Inspectors (AIs) can also now carry out building control functions. No cases had considered claims against AIs until recently:
In the Court of Appeal case of The Lessees and Management Company of Herons Court v Heronslea Ltd and others the court considered whether AIs had a duty under section 1(1) of the Defective Premises Act 1972. Under this section, a person taking on work for, or in connection with, the provision of a dwelling owes a duty to the employer or owner to see that the work is done in a workmanlike or professional manner to make the dwelling fit for habitation on completion. It held that the earlier case of Murphy indicated that this duty should not apply to LABC and there was no reason to treat AIs any differently.
In Zagora Management Ltd and others the court considered various claims relating to defective construction work at a new-build residential development, including whether the AI had fraudulently mispresented that the development complied with Building Regulations in signing off the final certificate. Even though the Court found that the AI had knowingly or recklessly made a false representation in the final certificate, the claims:
- 1.1 by the leaseholders failed for lack of reliance on the final certificate; and
- 1.2 by the subsequent purchaser of the freehold failed as the AI would not have intended for them to rely on the representation. Perhaps if the freeholder had been the original developer its claim could have succeeded?
A key difference between AIs and LABC is that they are usually appointed under a contract. If you have the benefit of a contract or warranty with the AI, then a breach of contract claim can be considered. That said, in practice AIs generally insist on clauses excluding much of their contractual liability.
Given the above, clearly it is very difficult to bring a claim against AIs. You should therefore ensure that you have robust suite of contractual documents in place so that claims in respect of breach of building regulations could be made instead against the contractor and/ or the design team.