BRegs Blog

A blog to debate the Building Control (Amendment) Regulations (BCAR): The BRegs Blog presents an opportunity for free expression of opinion on BCAR and their implementation. The blog is not representative of any professional body or organisation. Each post represents the personal opinion of that contributor and does not purport to represent the views of all contributors.

Tag: compensation

Inadequate Regulatory Impact Assessment for S.I.80

by bregs blog admin team

Audit-Checklist

To find out how one might effectively assess building control amendments we do not have to look far: the “Communities and Local Government: Proposed changes to the building control system – Consultation stage impact assessment” report was produced in the UK in 2012. You can read it here. The report comprehensively examines several options to revise and change the UK building control system. Their existing system, unlike ours, already has comprehensive local authority independent inspections with 80% backed by warranty.

The UK report included the Irish system as a option: light-touch, low-cost (to local authorities), self-certification, but discounted this early on due to cost to the consumer and to the wider industry. Making the system of building control simpler, leaner and more cost effective for society in general is clearly a motivating factor.

The UK is our closest model in terms of building standards, legislative system and environment. We are a fraction of the size of the UK, however our demographics are similar. One must wonder after reading this document, how the Department of the Environment, Communities & Local Government (DECLG) opted to continue with the most expensive form of building control for the industry, when a simple system of self-funded local authority independent inspections would improve building standards and save the industry tens of millions per year, while delivering a better standard of building generally and giving the consumer redress in the event of latent (hidden) defects?

Despite over 500 stakeholder submissions on S.I.80 received by the DECLG, no such study was carried out here. It appears that at no point in the consultation process or formation of S.I.80 have the impacts on SMEs, the industry and the consumer been considered in detail. The National Consumer Agency (NCA) estimates the extra cost to the Irish house building industry alone would be in the region of €30m- €90m per year (based on a sustainable level of 30,000 new dwelling units per year). The financial impact of S.I.80 on the wider industry is likely to be a multiple of this. With no comprehensive independent system of local authority building inspections, the effect of S.I.80 on building standards will not give the return for this extra cost to the industry, nor to the consumer. In their 2012 submission the Competition Authority express concern about “whether the additional costs imposed by the proposed regulations are in proportion to any benefit they might bring”

Worryingly, it would appear that the Department did not carry out a Regulatory Impact Assessment (RIA) of the March 2013 wording of S.I.80. A very brief RIA was completed in 2012 and the lack of a follow-up would suggest some of the very significant changes introduced by the Minister in the March 2013 draft have not been comprehensively examined. The RIA produced by the department is included as part of the following document “Strengthening the Building Control System – A Document to inform public consultation on Draft Building Control (Amendment) Regulations 2012“ . See document here

The Impact section (section 4) of the RIA is only six pages long and does not appear to be backed up with any research. For example, under the Section 4.6(i) Impact on National Competitiveness, the report makes the simple claim “There will be no negative impact on Ireland’s competitiveness”. The only costs noted is a notional cost per dwelling. Remarkably, the more significant insurance costs are excluded. This is an extraordinarily light assessment of a very significant amendment.

We do not need to look to the UK for examples of good impact assessment. The RIA of our own Construction Contracts Act 2013 (available here) and recent Health & Safety Legislation (available here) provide far more comprehensive analysis. Why has S.I.80 only had the most cursory impact assessment done on the 2012 draft and nothing since? Already three Senior Counsel legal opinions completed on the March 2013 draft of S.I.80 identified serious legal and practical issues associated with implementation, and all concurred that S.I.80 is unworkable in its current form. Given the wide-ranging effects on the construction industry, SMEs and the wider economy, it is remarkable that essential stress-testing has not been completed by the department.

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“severe risk of a hiatus in the construction industry” #bregs #Morning Ireland #JoanO’Connor

by bregs blog admin team

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Interview with Joan O’Çonnor on Morning Ireland: ‘RIAI call for postponement of Building Regulations’ 

Podcast at: feed://www.rte.ie/radio1/podcast/podcast_morningireland.xml

Listen back at: http://www.rte.ie/news/morningireland/

What is PI Insurance?

by bregs blog admin team

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PI (Professional Indemnity) Insurance is taken out by those providing a professional service to provide cover against claims for error or negligence. Generally, PI covers the legal fees involved in defending a claim and the cost of ‘righting the wrong’ if the professional was found to have been at fault.

PI is to protect the professional against a claim, if he makes a mistake. It is, sometimes mistakenly, considered as future warranty for the building owner available to fix anything that goes wrong with the building. This is not the case, as there is no certainty that the professional was at fault or that a claim will be upheld in court.

There are two important points about PI:

Firstly it is on a ‘claims made’ basis.  The claim must be made during the policy, so a 2013 policy covers claims made in 2013, regardless of when the problem happened in the past. This is not like motor insurance- if you crash today and cancel the policy, a future claim will be valid once insurance was in place on the date of the accident.  This poses a problem for professionals and consumers alike; because in order to provide redress, PI insurance would have to be kept in place until the statute of limitations applies.

Secondly, in Ireland there is ‘joint and several’ liability. This means that even if a professional is 1% liable, the entire claim can be made against him as the ‘last man standing’.

€10m Pyrite compensation pack agreed – Will anything change under the new regulations?

by bregs blog admin team

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An initial €10 million of funding has been announced by the Government to repair homes damaged by pyrite. (Journal.ie 16/10/13). Pyrite damaged homes are being rectified at taxpayer expense because there’s no ready system of redress for homeowners.

Although the stated objectives of the new regulations is to provide “traceability and accountability at all stages of the building process” (Minister Hogan 04/04/13), the consumer will be no-better off under the new regulations. A modified system of self-certification will continue and where the assigned certifier cannot be found, or the action for negligence fails , or the certifier no-longer has the means or the insurance to rectify the problem; it may be up to the taxpayer to once again step in and provide redress.

The best time to identify defects and remedy problems is during the construction, through a system of independent inspections. In 2012 The Pyrite Panel reported on the reasons for the failure to prevent defective material (containing pyrites) and recommended that “the system of independent inspections, carried out by the building control officers, should be strengthened to complement the mandatory certification process for buildings”

In the event of ‘latent’ defects (defects that are not evident or have not developed at the time that the building is complete) a mandatory system of Latent Defects Insurance would give the building owner immediate redress for pyrites and other hidden problems without having to go to court. From the Pyrite report: “More generally, from a public policy perspective, systems should be put in place that would provide protection for the public, in the case of urgent and serious problems (such as occurred in relation to pyrite in dwellings), without having to resort to prohibitively expensive, time-consuming and uncertain legal actions having to be taken by individuals.”(The Pyrite Panel Report 2012)

Commissioned by the government, The Pyrite Report Panel carried out a thorough investigation into the problem of pyrite in homes and completed its report in 2012. The report was endorsed by the government and published. If SI80 (the proposed amendment to the regulation) is a response to the problems of Pyrite in homes, it is remarkable that one of this report’s key recommendations: independent inspections by local authorities, is not an integral part of the proposed changes.

Download the 2012 Pyrite Report Here

What is Pyrite? 

Surveyors welcome €10m Pyrite Remediation Scheme Pledge but say the problem is not over. See SCSI press release here