Get all the latest construction industry updates below
The new failure to prevent fraud offence (FTPF): are you ready for 1 September?
The FTPF offence, introduced as part of the Economic Crime and Corporate Transparency Act 2023, comes into force on 1 September 2025.
The aim of the FTPF offence is to bring about a corporate-culture shift in relation to fraud prevention and encourage organisations to take proactive measures to prevent fraud. The offence is designed to make it easier to hold organisations accountable if they fail to prevent the commission of specified fraud offences by those associated with them.
Under the FTPF offence, an organisation will be held criminally liable if:
- an "associated person" commits a specified fraud offence; and
- the fraud offence is committed with the intention of benefiting the organisation, either directly or indirectly.
An "associated person" is anyone who performs services for or on behalf of the organisation. This includes directors, employees, agents, as well as other third parties, even if they are not under contract with the organisation. This is a broad definition as it also includes any person who provides services for or on behalf of the organisation while they are providing those services. The construction industry can have complex supply chains involving numerous contractors, subcontractors and consultants and therefore careful consideration needs to be given as to who is an "associated person" who could create a significant liability for the organisation under the FTPF offence.
For the organisation to be held liable, there must also be some intention to benefit the organisation arising from the specified fraud offence (the intended benefit can be in addition to a personal benefit conferred on the associated person). The intended benefit can either be direct or indirect: it does not need to be financial; it can include conferring an unfair business advantage or gaining future opportunities.
Currently, the FTPF offence only applies to "large" organisations. The threshold for this would be met where the organisation satisfies two or more of the following criteria:
- more than 250 employees;
- more than £36 million turnover;
- more than £18 million in total assets.
The construction sector can be viewed as high risk in terms of fraud compared to other sectors due to the political and public pressures to meet practical completion deadlines and achieve results. This pressure and urgency can result in potential fraud risks being overlooked in order to meet project timelines and expectations. It is therefore extremely important for organisations in the construction sector not only to be aware of the new FTPF offence but also take steps in readiness for the FTPF offence coming into force.
A full defence is available where the organisation can demonstrate that it had reasonable fraud prevention procedures in place at the time of the offence. Government Guidance issued last year sets out the types of measures that organisations should consider. This includes top-level commitment (to an anti-fraud culture), risk assessments, policies and procedures and regular training.
If you would like to discuss the new FTPF offence and the steps your organisation should consider taking ahead of September 2025, please contact Emily Sharples.
Building safety disputes: the Supreme Court's ruling in URS Corporation Ltd v BDW Trading Ltd [2025] UKSC 21 (URS v BDW)
The highly anticipated decision in URS v BDW was handed down by the Supreme Court on 21 May 2025.
The Supreme Court's decision encourages the timely remediation of defective buildings and offers useful legislative clarification that can impact other live building safety claims. The approach here is unsurprising given the legal policy that underpins building safety, which the Supreme Court noted is intended to incentivise claimants such as developers to proactively remediate defects (to remove danger to occupants), and to ensure that remediation costs are borne by those responsible.
Brief background
BDW's underlying claim arose following the discovery of design defects in multiple high-rise residential buildings it had developed (Developments). It was the original owner of the Developments.
BDW appointed URS to provide structural design services in connection with the Developments. Defects subsequently arose and BDW remedied the defects and pursued URS for the costs it had incurred.
When BDW remedied the defects, it no longer had any proprietary interest in the Developments and no related claim had been intimated against it. The losses claimed by BDW against URS were purely economic as they were incurred without there being any 'physical damage' to the Developments.
The Technology and Construction Court (TCC) found in BDW’s favour on preliminary issues about the types of losses actionable in tort. Following the introduction of the Building Safety Act 2022 (BSA), BDW amended its pleadings to capture claims under the Defective Premises Act 1972 (DPA) and the Civil Liability (Contribution) Act 1978 (the Contribution Act) which was granted by the TCC. The decision regarding the preliminary issues and the amendment to the claim was appealed by URS to the Court of Appeal (and dismissed), and then appealed again to the Supreme Court. This Supreme Court judgment decided on these issues – and not the outcome of BDW's underlying claim for the recovery of losses from URS.
Supreme Court decision
The Supreme Court dismissed URS's appeal and determined that:
- URS, as a designer, owed a duty (as part of its assumed responsibilities in the tort of negligence) to guard BDW, as a developer, against pure economic loss it may suffer including repair costs to the Developments. The Supreme Court also determined that "voluntarily" incurred loss can be recoverable, however in this case the losses suffered by BDW were not voluntary because if the defects were left unremedied:
- BDW risked reputational damage;
- occupants risked death or injury, for which BDW might be legally liable; and
- BDW still had a legal liability to the occupants to remedy the defects; the remedy was only unenforceable due to the (then) expiry of time limits for pursuing claims against it.
- Developers can be owed a duty under the DPA and there is no reason why a developer (such as BDW) cannot simultaneously both owe a duty (to homeowners) and be owed a duty (by its designers / contractors) under the DPA.
- On 28 June 2022, section 135 of the BSA introduced an extended retrospective time limit of 30 years for bringing claims that had arisen by virtue of section 1 of the DPA before 28 June 2022. The Supreme Court confirmed that this retrospective 30-year time limit applied to BDW's claim. It would only not apply if a claim settled or was subject to a judgment before 28 June 2022 and its applicability would breach Convention rights under the Human Rights Act.
- Extended time limits for pursuing claims by virtue of section 1 of the DPA must apply to related claims to avoid a scenario in which a claim involving a building safety defect is pursued against a developer under the DPA, but the developer is time barred from pursuing an onward claim against a directly responsible contractor.
- If two parties are liable for the same damage, section 1 of the Contribution Act provides a liable paying party with a statutory right to recover a payment contribution from another liable party. The Supreme Court confirmed that entitlement to the contribution arises when payment is made in connection with damage for which both parties are liable, which – in this case – was when BDW remediated the defects.
New JCT Target Cost Contract
The JCT has, on its JCT Parliamentary Reception (Summer 2025) webpage, announced that its new Target Cost Contract will be published this summer.
The Target Cost Contract will be the JCT's newest contract and it will form part of the JCT's 2024 edition of building contracts. The new contract will come in the form of a main contract and a sub-contract with accompanying guides.
The JCT uses its annual Construction Industry Parliamentary Reception to celebrate the JCT's achievements and new developments. In June, at this year's Reception, the JCT will introduce its new contract and preview key resources ahead of the official release.
JCT to withdraw its 2016 Edition of Contracts
In previous editions of Building Interest, we mentioned the JCT had launched its 2024 edition. The JCT presently has two editions of its suite of contracts in use - the 2024 edition and the previous 2016 edition.
In March, the JCT announced that contract users will be able to access contracts from both editions until March 2026 following which the 2016 edition will be withdrawn and will no longer be available to purchase either in hardcopy or digital format.
Responsibility for all fire functions moves to MHCLG
In the last issue of Building Interest, we mentioned the Government's response to the Grenfell Tower Inquiry Phase 2 Report (the "Government's Grenfell Response") which was published in February and which paves the way for further changes to the life critical building and fire safety landscape in England and the UK in the next decade and beyond.
Implementing a change that formed a key recommendation in the Grenfell Tower Inquiry’s Final Report, that building and fire safety should be overseen by a single department, on 1 April, the government brought fire and building safety together by transferring Ministerial responsibility for all fire functions from the Home Office to the Ministry of Housing, Communities and Local Government (MHLCG): Responsibility for all fire functions moves to MHCLG - GOV.UK.
Construction products reform
Alongside the findings in the Grenfell Tower Inquiry's Final Report, Dame Judith Hackitt's Independent Review of Building Regulations and Fire Safety and the subsequent Independent Review of the Construction Product Testing Regime by Paul Morrell OBE and Annelise Day KC in 2023 (the Morrell-Day Review) revealed widespread and systemic failures of the regulatory and oversight regime for construction products.
The Morrell-Day Review was announced by government in April 2021 and was published in April 2023. The purpose of this review was to identify weaknesses in the system for testing and certifying construction products and to make recommendations on how he system could be strengthened to provide confidence that construction products are safe and will perform as labelled and marked.
The failures identified include:
- insufficient focus on product safety within the existing regulatory regime
- uneven coverage of the regulatory regime (with only one third of construction products covered)
- a lack of rigour and capacity in key institutions responsible for testing and certifying products and conflicts of interest not properly managed
- poor product information
- tolerance, within the sector, of misleading marketing and false claims about products; and
- failures being underpinned by insufficient enforcement and inadequate routes to redress.
As part of the Government's Grenfell Response, MHLCG launched a 12 week consultation on construction products reform, accompanied by a 158 page Construction Products Reform Green Paper (February 2025), which closed on 21 May 2025.
The proposals for reform include:
- comprehensive regulatory coverage
- improved enforcement mechanisms
- mandatory compliance for products with designated standards
- enhanced product information and transparency
- strengthening third-party testing and certification
- a strengthened accountability framework
- digital solutions for enhanced traceability
- enhanced coordination among regulatory bodies
- strengthening routes to redress
- sustainability and environmental considerations
- continuous improvement and adaptation
MHLCG also identified five groups that will be critical to delivering change:
- construction product manufacturers;
- construction industry supply chains, including clients, contractors and designers;
- the national quality infrastructure, including the British Standards Institution, United Kingdom Accreditation Service, and conformity assessment bodies;
- regulators; and
- the government.
Reforms set out in the Green Paper include the introduction of a new single construction regulator; enhanced regulator powers and resources; the implementation of tougher oversight on testing, certification, manufacture and use of construction products; ensuring consistency between the UK’s regulatory framework and the revised EU framework; and expanding regulatory coverage to include all construction products.
We will report on the government's response to the consultation once it is published.
Employment law update
A new legal duty that took effect last year is the duty to take reasonable steps to prevent sexual harassment came in on 26 October 2024 under the Worker Protection (Amendment of Equality Act 2010) Act 2023.
The Act introduces a duty on employers to take reasonable steps to prevent sexual harassment of their employees and workers. It also gives employment tribunals the power to uplift discrimination compensation by up to 25% where an employer is found to have breached the preventative duty.
Although the Act doesn't allow employees and workers to bring stand-alone discrimination claims for third-party harassment (such as by customers, service users and suppliers), the preventative duty does itself extend to sexual harassment by third parties.
The Employment Rights Bill is also set to introduce employer liability for all types of third-party harassment in the future, the preventative duty will be a helpful way for employers to get up to speed with best practice in this area now.
For more detail on the duty and how we can help you, have a look at our recent bulletin: Sexual harassment: the new preventative duty.
In the pipeline – UK Government's new Infrastructure Strategy
The government is expected to publish a 10-year Infrastructure Strategy (10YIS) in June.
10YIS will outline the government’s overall approach to core economic infrastructure and set out its plans for various infrastructure areas that include transport, energy, water, flood risk management, waste, housing, social infrastructure and digital. For the first time, the government’s infrastructure strategy will also bring together plans for housing and social infrastructure – hospitals, schools, colleges and prisons.
The government has stated its intention that 10YIS be coordinated across the whole of government and aligned with a new long-term spending framework with capital budgets set for at least five years, extended every two years at regular spending reviews. 10YIS will go beyond this, setting out a 10 year set of priorities for infrastructure.
The new National Infrastructure and Service Transformation Authority (NISTA)
In preparation for 10YIS, the government has launched a new body to oversee the delivery of its infrastructure plans.
The National Infrastructure and Service Transformation Authority (NISTA) combines the functions of two organisations:
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the National Infrastructure Commission (NIC), an external body that assessed the government’s progress on infrastructure plans and offered advice and recommendations; and
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the Infrastructure and Projects Authority (IPA), which sat within the government and supported the delivery of major infrastructure in the UK.
NISTA sits within HM Treasury and the Cabinet Office. It will be responsible for both economic infrastructure (water, energy, transport etc.) as well as social infrastructure (hospitals, schools, prisons etc.).
