Alarming Legal opinion: BC(A)R SI.9

by Bregs Blog admin team

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At a recent CPD event organised by Commercial Media Group (CMG) Events and chaired by RIAI Council member Toal O’Muire in DunLaoghaire on Wednesday 26th March 2014, some very alarming legal opinions were made on professional liability and professional indemnity insurance for certifiers under Building Control (Amendment) Regulation (SI.9 of 2014). Link to event information: Building Control 260214. A summary with main points quoted to follow. Presentations are included as attachments.

Barrett Chapman, Partner, Contruction Department, McCann Fitzgerald Solicitors:

Certificates “…should have said ‘I am of the opinion…If you certify and the building doesn’t comply, you are liable. There is no doubt about that…” Barrett Chapman stated that the DECLG need to review the word “certify” as it is “an absolute“.

He gave a very bleak appraisal of the 2013 certificate wording amendments. He said that a professional could certify “based on last night’s episode of the Simpsons” and it wouldn’t change the fact, that certifiers are offering an absolute (i.e. a guarantee) that a building complies. Despite additions of ‘based on the above’ and ‘using reasonable skill care & diligence’, the “absolute wording is still there“.

If a professional certifies that a building complies with building regulations, and later the building does not comply, the professional has made a “negligent misstatement”. While professionals may be able to avail of a cap for liability under a contract, a contract wording cannot change tort liability to 3rd parties.

Question from from the floor: ‘What is the difference between ‘opinion of substantial compliance’ and ‘certificate of compliance’?

Answer: “Tort of negligent misstatement cannot kick you where you offer an opinion of substantial compliance using reasonable skill care and diligence”

He suggested that certifiers should make sure they have professional indemnity insurance. Regarding advice is to assigned certifiers in light of his presentation, whether to act in the new certifier roles, Barrett offered this advice: “Don’t“.

Link to Barrett Chapman presentation Barrett Chapman CPD presentation

Fiona Forde, Barrister-at-law, Law Library:

Fiona Forde confirmed Barrett’s bleak assessment. Quote: “Assigned Certifiers will not be able to rely upon ancillary certificates. The courts have already proven this…Joint & Several liability is held on sacredly by the courts…(People will be) unable to put up much of a fight as ancillary or assigned certifiers.” She suggested architects’ P.I. Insurance would continue to be a target.

Link to Fiona Forde presentation Fiona Forde CPD presentation

Graeme Tinny, Director, Griffiths & Armour Professional Risks:

Graeme Tinney hoped that BC(A)R would improve standards and reduce the number of claims. However P.I. Insurers operate on the basis of “reaction rather than anticipation.” “As PII is claims made, insurers can wait and see and walk away at any stage. He suggested LDI as an alternative. Quotes from presentation:

” The minister’s statements* may have a negative effect as he says the certifier is offering a guarantee.  Employees will be exposed where they sign certificates and the firm they work for folds…PII is a terrible way to manage construction risk…Its costly because you end up in court”.

Link to Graeme Tinney presentation Graeme Tinney CPD presentation

* Minister Hogan, RTE Radio 1, 28th February 2014:  “What they (self-builders) will require, for the first time in addition is a professional person that will have to sign off that the work is done and that will cost somewhere between one and two thousand euro and that’s a small cost to pay for making sure that things are done right for a home that might cost €100,000 or €150,000

* Minister Hogan, The Last Word, 10th December 2012″…some of the professional bodies are totally opposed to what I am trying to do, most of those professional bodies were equally culpable to developers and builders of the shoddy workmanship. They must take responsibility for that. I’m empowering those professionals now to sign their name in a mandatory way and certify that the works are done to a high standard, that they stand over what they are signing

 

Other BREG blog Links on legal aspects: 

Legal Firms Advice: BC(A)R SI.9

Reddy Charlton: Building control amendment regulations 2014

William Fry: Building Control Amendment Regulations 2014

McDowell Purcell: Impact of the building control amendment regulations 2014

Arthur Cox: second time lucky building control amendment regulations 2014

Dillon Eustace: The Building Control (Amendment) Regulations 2014.pdf