What a Best Practice Building Act for 2020 and Beyond Would Look Like
By Kim Lovegrove RML, FAIB, Senior Lawyer, Lovegrove and Cotton – Construction and Planning Lawyers
Over the last 20 years the effectiveness of building regulations has been severely tested in light of a litany of regulatory failures in a number of jurisdictions. Interestingly many of the failures have occurred in advanced economies, economies that are not constrained by the extreme budgetary constraints of the developing nations. There has been a “pan jurisdictional” or geographically indiscriminate phenomena where nations from both hemispheres have experienced construction failures ranging from the significant to the extreme. The leaky ‘condo’ crises in the nineties cost Canada many billions of dollars, as did the leaky building syndrome in NZ which has cost that country considerably more. The Latvian supermarket roof collapse which killed 54 people was a negative legacy of the GFC austerity measures and the dismantling of the national building inspectorate. Then there have been fire spread calamities such as the Brazilian night club 2013 inferno and Grenfell 2017, which claimed the lives of 242 and 72 lives respectively.
Building Control Failures have Assumed a Serial Dimension
When viewed in aggregate, one can conclude that building control in many jurisdictions is not delivering as building failures in one form or another have assumed a serial dimension. So there needs to be a rethink and a redesign of that which can lay claim to being best practice building control. There are many whom consider that it would probably be best if the redesign of modern day building control design could occur in an ‘apolitical’ laboratory that comprises a coalition of internationally venerated experts on enlightened building control, to ensure that critically independent lenses firstly diagnose that which is wrong with regulatory ecology and then secondly to divine the cure. But the writer is the first to concede that there is a utopian naivety in that idea, because the reality is that law reform will always be the progeny of the governing sovereign jurisdictions, as that is their exclusive constitutional remit.
Having been deployed as a law reformer in a number of countries, the writer has been afforded the opportunity to identify best practice building legislation and regulatory systems that are worthy of consideration for reforming jurisdictions. Here are some thoughts on point.
There will be one Building Act
The Building Act will be called precisely that, and it will be the primary, holistic and overarching piece of best practice building legislation that will govern the regulation of building control in the State. It will be ‘mission control’ for all things involving building regulation. The Building Act will be easy to locate, and there will be no labyrinthine process involved in locating the legislation. One of the best ways of determining whether a governing act of parliament is readily accessible to the consumer is to google a term like ‘building act’ – if an internet search can immediately trace and reveal that act, then that is a good start. If one types in the words ‘building act’ and a potpourri of ill-defined regulations ‘pop up’, then that is a problem. The governing act of parliament will be easy to locate on the web, literally at one’s fingertip.
The Building Act will have Clear Objectives.
The objectives of the Building Act will be clear and to the point. The Building Act 1993 (VIC) is one such act that achieves this, and it does so with an economy of language. Section 4 reads as follows:
Objectives of Act
(1) The objectives of this Act are—
(a) To protect the safety and health of people who use buildings and places of public entertainment;
(b) To enhance the amenity of buildings;
(c) To promote plumbing practices which protect the safety and health of people and the integrity of water supply and waste water systems;
(d) To facilitate the adoption and efficient application of—
(i) National building standards; and
(ii) National plumbing standards;
(e) To facilitate the cost effective construction and maintenance of buildings and plumbing systems;
(f) To facilitate the construction of environmentally and energy efficient buildings;
(g) To aid the achievement of an efficient and competitive building and plumbing industry.
(2) It is the intention of Parliament that in the administration of this Act regard should be had to the objectives set out in subsection (1).
There will be One Set of Building Regulations
There will be subordinate building regulations, called precisely that, ‘building regulations’. These regulations will be promulgated by the Building Act. They will deal with machinery or regulatory ‘drilled down’ and nuts and bolts matters like fines, time lines, penalties, prescribed fees and the like.
There will be One Building Code
There will be one Building Code which will enshrine the technical regulations and codified provisions that dictate how buildings will be built. (The Code will be called the Building Code although it will also mention the name of the State i.e. the New Zealand Building Code).
In the case of a federal jurisdiction where there is a Federal government, the code will be designed for national application, so that the state administrations can call up the Code, courtesy of the regulatory promulgation provisions in their local Building Act.
In the case of non-federal jurisdictions such as Singapore and New Zealand, there will be one National Building Act, one set of building regulations and one Building Code.
The codified building classification criteria will also have regard to the inherent or potential risks that are posed by different types of buildings such as:-
- Uncomplicated construction such as warehouses and storage facilities
- More complicated structures such as high rises
- Hospital facilities
- Residential abodes
- Civil defence facilities
Careful regard in the risk classification will be had to intended use, mindful of the fact that some buildings may be designed to contain pernicious components and elements that can cause injury to people and environment. Warehouses that will house combustible or toxic chemicals would be case on point.
From a consumer and industry perspective there are much greater efficiencies to be gained by centralised and single regulatory regimes. In jurisdictions where building regulations are dispersed in a number of statutes and multitudes of departments, it is much harder for the user to navigate through the regulatory terrain. This in turn causes delays and a greater opportunity for misinterpretation. Further, it requires a greater diversified skill level. All of the above impact upon the optimum operationality of the building regulatory ecology.
It is not a ‘stretch’ to realise that users are reassured if there is one Act, one code and one lead agency that administers building regulation.
The regulatory hierarchy and top down approach where the technical code and building regulations are subordinate to the one Act also make it clear which legislation and regulatory instruments assume precedence. When there is no clear hierarchy there is greater risk of conflict of laws.
There will be a dedicated Ministry of Construction
There will be a Ministry or a Department for Building Control. This lead agency will be the responsible body for overseeing the administration of building control in that State and will report to a Minister that will be exclusively responsible for the building regulation portfolio.
The Ministry will maintain regulated inter-connectivity with key departments like the Fire Brigade to ensure that regard is had to their policy recommendations; such is the importance of this instrumentality in terms of minimizing loss of life to fire brigade personnel and the public.
The logic in having one lead agency that performs the central administrative role for the building approval regime is compelling. The consumer will be in no doubt as regards whom the paramount regulatory body is and will not have to navigate between different lead agencies that interact in the regulatory ecology.
There will be A Best Practice Product Accreditation Body
There will be a national product accreditation body which will assess and determine whether construction product is fit for purpose and suitable for use and sale in the market place. Such a body has to be a national or Federal body as some of its jurisdiction may involve a legislated relationship with customs authorities and border control officials.
The test for suitability will be such that any product approved must satisfy rigorous testing to ensure that the product does not and will not cause any harm of whatsoever nature to the end user or the fabric of the building. Case in point would be aluminium composite panels; manufactures intent on exporting ACPs to local market would be required by law to seek accreditation from the accreditation body.
Once product is approved, it will be formally accredited and placed on an accredited product register. Products that are not featured on the register will not be capable of being lawfully used.
Any business, regardless of whether it is an on or offshore manufacturer, will be required by law to pay one hundred percent of the cost of testing and accreditation.
If it becomes evident that an approved product is subsequently found to be defective, the accreditation of that product will be revoked and it will be illegal to henceforth use that product.
The legislation will provide that regard must be had to such accreditation and it will be an offence for any actor to utilize product that is not accredited.
The product accreditation body will, in all likelihood, be a Federal body that is aligned with or collaborates with best practice testing authorities. The federal body will be empowered to approve and accredit testing authorities that will be exclusively empowered to test, approve or reject product applications. The body will also have the power to remove the accreditation of the testing authority if it is established that the testing regimes do not accord with international best practice.
International best practice criteria for testing will be used, as globalization and free trade agreements have generated an international market place where exporters of product can export to any given jurisdiction. Cross-jurisdictional harmonization and best practices are thus critical. ACP vertical fire spread is case on point. China, Australia, the UK and the Middle East have all encountered like problems and infernos derived from like product.
There will be a Practitioner Licensing Board
There will be a practitioner licensing Board which will license all building practitioners in the state. The Board will come under the jurisdiction of the Ministry of construction.
There will be building officials responsible for the building approval process
The building officials will:-
- Issue building permits
- Carry out building inspections
- Issue occupancy permits when the building is completed
The rationale for the establishment of the dedicated discipline of building official, sometimes referred to as an accredited checker (Singapore) or an accredited certifier (Australian state of NSW) is that there is merit in the appointment of one designated person that is vested with the responsibility of overseeing the building approval, from commencement of the process to the end. If multi – actors or agencies are engaged in this process then there can be significant delays to both permit issue, inspection and the issue of occupancy permits. Further the liabilities and accountabilities for oversight of the building approval process at law become more opaque and diffuse.
There is much divergence of opinion internationally about the amount of power the official should have and the role of government vs a vs local government in the building approval process. Suffice to say opinion is mixed as some jurisdictions prefer to see the heavy hand of the local governmental regulator rather than the ‘migration’ of much of the approval task to the private sector. Key determinants will be whether the oversight and regulatory probity regime is sufficiently robust to ensure that building officials are ‘dis-incentivised’ from compromising their statutory obligations for fear of attracting dire sanctions by the central regulator.
The building official will carry out at least 3 mandatory inspections at critical and legislatively mandated junctures and random inspections will also be required.
The official can either be an employee of local government or a private sector employee. If the official is a private sector employee, that official will be audited on at least two occasions annually by a licensed government auditor who will ascertain whether the official has at all times discharged his or her statutory obligations.( Japan has maintained an annual mandatory auditing regime for private certifiers for over 20 years, very successfully)
The building official will ensure that that which is approved and built is carried out in accordance with the approved plans and the technical requirements of the building code.
There will be a final joint inspection
Prior to issuing the certificate of final inspection the building official will attend a joint inspection with representatives from the officers of all of the practitioners that have had paramount involvement with the building project. This will include the:-
- design engineer
- approving engineer
- any other inspectors
- a representative of the Fire Brigade/Department
The building official upon completion of the work will arrange the inspection and will satisfy him or herself that the work is fit for occupation and will then issue an occupancy permit which will be filed with the local municipality. The joint inspection regime is very common in a great many Chinese jurisdictions and has much to commend it.
Rationale for the mandatory inspection regime
One of the most vital parts of the building approval regime is the inspection protocol. A robust inspection regime operates like an early warning detector system; problematic future construction scenarios are identified early before they become problematic as-built scenarios.
Mandatory inspections at key junctures ensure that there is rigorous regard to each stage of construction so that the building official can if need be regularize matters, by issuing rectification notices and orders. Absent mandatory inspections there is no guarantee that any inspection will occur. Further absent mandatory inspection there exists a greater likelihood that compromised construction outcomes will not be discernible until a much later stage, on account of the fact that they were not identified earlier and at a time when the malaise could have been thwarted.
The idea of a joint inspection which is an approach that is used to great effect in Shanghai, has compelling merit particularly for complicated and high risk buildings. It affords the principal actors the opportunity to peer review in the presence of the official and determine whether indeed the building according to all, is fit for occupation.
Risk Based Building Inspection Regimes
The World Bank has expounded the merits in adopting risk based inspection regimes.
“Adopting a risk-based approach can simplify key regulatory processes that govern business activities. This fundamental step involves moving from inspections, licensing, and other regulatory tools that cover all business uniformly to an approach that tailors the instruments used for regulation and control based on the level of risk. The higher the potential risk posed by a specific business activity, the stricter the control and the greater the need for licensing or permitting and more frequent inspections. For low-risk activities, a license or permit should generally not be required, and inspections should be rare. Having a proper methodology and tools to classify enterprises or activities according to risk is thus particularly important. Risk matrices are the primary way used to conduct this sort of classification. Risk matrices are fundamental instruments used to classify establishments depending on their risk level – and adapt the regulatory response (e.g. inspections, licensing) on this basis. This means that resources can be used more effectively and efficiently, and that administrative burden is minimized while positive outcomes are maximized. Creating a risk matrix in itself is not necessarily a complex exercise, and can be done using international experience and examples, and relying also on the regulators’ and experts’ experience in the country. The parameters leading to higher or lower hazard are generally easy to identify, provided that the common mistakes listed above are avoided.”
(Blanc, Florentin; Franco-Temple, Ernesto. 2013. Introducing a risk-based approach to regulate businesses: how to build a risk matrix to classify enterprises or activities (English). Nuts & bolts. Washington, DC; World Bank Group.)
Building inspection regimes provide an ideal setting for the application of risk based inspections. The writers’ preference, as stated above, is that inspections be mandated by law. One jurisdiction that requires the carrying out of mandatory inspections is the Australian State of Victoria. The mandatory inspections stages are:-
- Before footing placement;
- Prior to pouring reinforced concrete;
- Frame completion;
- Inspection of fire inhibitors; and
- Final inspection.
Although there is much to commend the Victorian legislature for regulating the mandatory prescription of inspections, the limitation is that the inspection regime is not a sufficiently evolved risk base regime in that it is a ‘one size fits all approach’.
This inspection regime applies to all buildings regardless of their complexity or their risk ‘pathology’, be it simple and uncontroversial warehouse construction or SHR (super high rise). The Victorian Building Act 1993 fails to index the inspection regime with the inherent risk profile of the building classification and thus has limitations.
A best practice inspectorial regime would correlate the number of prescribed inspections with the complexity and the ‘personality’ of the intended building in use. It would follow that the ‘lower the mercury’ on the building ‘risk barometer’, the lesser number of prescribed inspections. It may follow that SHRs would require ten inspections, warehouses two.
Ideally a regulatory risk matrix would be developed by highly regarded technical experts with the complement of a very capable construction lawyer. The matrix would be divided into different building classifications and those classifications would then be matched with a regulated mandatory inspection regime. The number of mandatory inspections and the type of inspections would be driven by construction complexity and the buildings` capacity to generate harm in circumstances where there are compromised construction outcomes.
Enforcement powers of the building official
If the building official observes any irregularity or construction input that is not in accordance with the Building regulations then:-
- A building enforcement notice will be issued
- If the notice is not complied with an order must be issued
- If the building official is from the private sector and there is noncompliance then the matter must then be referred to an auditor at the Ministry.
The auditor will have powers to compel compliance. Furthermore the auditor will automatically refer the matter of non-compliance to the Licensing Board for further investigation.
The auditor will be able to seek full cost recovery for any material noncompliance of an order issued by a building official.
Legislative provisions must be drafted to make it very clear that the building official affords no favours to owners or builders in respect of the impartial and decisive application of enforcement notices and orders. As there is increasing resort to private certification in many countries, strong probity controls are critical. The import of the provisions will be such that if an auditor or investigatory body establishes that a building official has not been impartial in the exercise of the enforcement powers, then that will be a ground for suspension of license and in circumstances where there is corruption or there has been evidence of financial incentivisation to turn a blind eye as it were then resort to criminal prosecution.
There will be a licensing and registration regime.
The Ministry for Construction will establish the licensing Board. The Board will determine the criteria for licensing and will oversee the probity regime for registration and licensing of practitioners to ensure that the public is protected from practitioner recalcitrance and ethical compromise
The Licensing Board will ensure that principal Construction actors licensed annually.
The criteria for gaining a practitioner license will be:-
- An approved qualification
- Approved level of experience
- The maintenance of compliance insurance cover
- Maintaining annual compulsory professional development
- Payment of the annual licensing fee
The practitioners will be:-
- Residential builders
- Commercial builders
- Building officials
- Building inspectors
- Proof engineers
- Designers and draftspersons
The Licensing Board will establish the qualifications and experience criteria for the actors. In the case of engineers, architects and building officials the qualification criteria will be not less than a degree in the respective discipline from a recognised university or tertiary institution.
With regards to the establishment of qualification criteria regard should be had to international best practice on point. The greater the skill, the level of professionalism and ethical propensity the less likelihood of optimum construction outcomes.
There will also be grading mechanisms. In Shanghai for instance to practice as a medium level engineer one must have a degree in engineering and 5 years’ experience. To become a quality assurance supervisor, the engineer has to obtain an additional 4 years’ experience and must then sit and must then pass a further examination to qualify as a quality assurance engineer. Under this system little is left to chance in terms of ensuring that a key actor in the building approval design and quality vetting process is up to speed.
In Germany the “proof engineer” is licensed by government to vet engineering designs and computations that have been prepared by the engineers and designers engaged by the developer. This second set of eyes brings to bear the ‘lenses’ of total arm’s length objectivity and detachment along with a very high qualification and skill set. This approach resonates with a culture that is very much disposed to best practice quality outcomes.
The German approach has much to commend it with respect to complex buildings such as high rises or SHRs ( super high rises) or buildings that contain high risk elements or buildings that harbour the likes of combustible cladding; there is a lot to be said for making the deployment of a proof engineer mandatory by law.
The insurability of a building regulatory environment is an insightful bell weather as regards whether a construction paradigm functions properly. The insurance industry keeps a very close eye on building regulatory failure and the pricing of construction risk. Market underwriting is rather nomadic, insurers move in and out of markets as they are global players with global appetite, but they do not have an appetite for higher risk as countries that have experienced the flow on effect of the combustible cladding controversy have found out. If insurers refuse to underwrite construction jurisdictions then there is little consumer protection for compromised construction outcomes so it is critical that regulation in light of its holistic and utilitarian make up delivers an insurable paradigm. An insurable paradigm will show case strong building controls, skilled practitioners and swift and efficient dispute resolution mechanisms and the most compelling evidence of building control success will be no construction related death and minimal claims for economic loss.
Building practitioners will be required by law to carry compulsory professional indemnity cover. This cover will provide indemnification for losses that emanate from negligent design or supervision. This assists the aggrieved in obtaining recompense for losses caused by building practitioners.
The insurance requirements will be approved by the Ministry and will be published in Ministerial ordinances or gazettes and it will be illegal for building practitioners to practice unless they are insured.
In the case of builders they will be required to carry a warranty cover that provides compensation for losses that emanate from defective workmanship.
Funding of departments and the related statutory bodies charged with the responsibility of discharging central building control functions
It is well established that without sufficient human resourcing and funding probity regimes, building control apparatus will fail. When it fails, there can be disastrous consequences. The Latvian supermarket roof collapse that caused 54 deaths was in part due to the failure of the probity regime. Post GFC austerity measures culminated in the disbanding of the national building inspectorate. The disaster ultimately led to the resignation of the Prime Minister whom felt partially responsible for the systemic failure.
American prohibition likewise in the 1920s was doomed to fail from the outset because the governments did not allocate anywhere near the amount of funding to underpin the enforcement regime. The amount of funding was infinitesimal in comparison to that which was required. The illegality of alcohol consumption then established a culture of vice and systemic disregard for the law and the notorious gangster culture took hold and multiplied. This led to the repealing of prohibition in light of the unmitigated failure of the legislated regime. Prohibition failed because enforcement failed and enforcement failed because of fiscal parsimony and woefully insufficient resources.
It follows that the establishment of sustainable funding is of absolutely critical importance to the viability of a probity and enforcement regime.
Sustainability of income streams is critical; hence, the central regulator must ensure that there is a responsive and continual funding supply.
The Latvian incident reveals that this is not always possible, particularly in challenging economic circumstances, so the regulators need to think “outside the circle” and look for user pays ways of funding probity regimes. Some of which are as follows:
- annual licensing and registration fees
- a brokerage imposed on insurance providers so that a percentage of the premium levied finds its way into the regulator’s treasury
- user-pays auditing regimes where practitioners pay the auditors for annual and mandatory audits
- a construction levy being imposed when building permits are issued and remitted to the regulators treasury
- annual and compulsory continuing professional development training where the training is provided by external and accredited training providers on the basis that a percentage of the training revenue is remitted back to the central regulators treasury
If the above mediums are implemented, the costs of financially underpinning the regulator’s probity regime can be substantially underwritten.
Licensing Board Probity regime
The Board will oversee the probity regime for the building industry in the State. The licensing body will have broad investigatory powers and will also have the power to:-
- Conduct a hearing
- Fine suspend or cancel a license
- Refer heinous matters to the policy for criminal investigation and prosecution
There will be an investigatory and auditing arm of the Licensing Board.
The auditing arm will ensure that all building officials are audited twice a year. The auditing arm will ensure that all other building practitioners are audited at least once a year. The auditors will be empowered to carry out random audits at any time. It will be incumbent upon the ‘auditees’ to afford full cooperation to the auditors with respect to giving the auditors access to building project records and practices.
The auditors will be required to have a technical qualification and a law enforcement qualification.
Auditing and enforcement is critical in so far as it is one of the best means of public protection. One of the best auditing regimes that the writer has observed is the Japanese regime where the private building official is audited annually. Although the Japanese had regard to the private certification model adopted by a number of Australian jurisdictions in the early nineties, whereas in the Australian jurisdictions there was no legislative requirement for building officials to be annually audited, the Japanese made the auditing requirement mandatory at law.
The impartiality of a small sector of private certifiers in Australia has been called into account as there is a view that some certifiers have not been sufficiently arm’s length from their contractor or developer clients. The Japanese approach which is very much akin to the auditing regime that applies to lawyers that hold client monies in trust, ensures that audits occur at regular intervals. As the practitioner is ever mindful of the fact that he or she will be audited and investigated for errant practices, the process serves to put a break on any temptation to compromise a statutory obligation.
Although in Japan the annual mandatory auditing only applies to private building officials it is considered that an optimum best practice probity regime would ensure that all building practitioners are audited annually. The challenge however for the establishment of a ‘broad church’, auditing regime would be that it would require the government to provide immense funds to the capability. For this reason the user pays funding regime sighted below is commended to the reader for consideration.
Funding of the Auditing regime
There will be a user pays regime. The auditors will be accredited by the Ministry of Construction but the practitioners will pay the Ministry an amount that is commensurate with the auditor’s fee. The auditors need not be in the full time employ of the Ministry but will be accredited and approved by the Minister.
This auditing funding model regime is based on the auditing regime for Australian lawyers, a user pays model that is established and has been pivotal in ensuring that practitioner recalcitrance is minimised. New Zealand also has had in place a like regime for many years.
The rationale for the user pays auditing system is to ensure that regardless of the ebbs and flows of the building economy, the enforcement regime funding model is sustainable and not constrained by contracting governmental budgets. The Latvian super market roof floor collapse occurred as a result of post GFC austerity measures where the inspectorate regime was dismantled. As user pays self-funding auditing regime based on the Australian lawyer auditing model would ensure that this would never occur.
The composition of statutory boards and tribunals and key advisory bodies will be based upon high levels of skill and probity
All statutory boards will have a balanced blend of both venerated industry participants and genuine consumer representatives. At least one third of all members of such boards will comprise consumer representatives and no decision will be possible unless the consumer representatives agree with the decision.
The consumer representatives will comprise one representative from the relevant department of consumer affairs but the balance will comprise members of the public that are chosen in response to an advertised campaign. The successful applicants will need to establish that they genuinely represent the consumer constituency.
The tenure of board members will be three years with a right of reappointment for an additional three years.
Where there is an imminent threat to life and limb or major adjoining property damage the Ministry of Construction will be able to direct the building official to issue enforcement orders and directives immediately by also will maintain an absolute discretion to intervene on its own behalf and invoke whatever measures in its absolute discretion it considers necessary.
Appeal Powers regarding building approval matters
There will be a designated tribunal or division within that Tribunal that will have the power to preside over and hear appeals in respect of the following:-
- Notices and orders issued by building officials
- A failure on the part of an official to approve an inspection
- A failure on the part of an official to issue an occupancy permit
- A failure on the part of an official to issue a building permit
- The appealing of a reprimand or censure handed down by the licensing body
There will however be no appeal right in circumstances where the Ministry of Construction has been compelled to invoke emergency intervention powers.
There will also be a fast track appeal procedure, where matters that require urgent determination are ‘moved up the line’. The Building act will define the circumstances that qualify for urgent determination. There will be a significant fee levied for the initiation by the appellant of a fast track appeal and this fee will be prescribed in the regulations.
Regardless of whether the hearing is a fast track appeal or a normal hearing there will be 3 decision makers presiding over the appeal, one of whom will be a lawyer experienced in administrative or construction law.
The decision makers will be ministerial appointees and they will be chosen on account of them being venerated and respected by members of good repute from the construction fraternity. They need not be full time employees of the Tribunal or the public service; rather they can also be employed in other capacities.
The members will be remunerated in accordance with a remuneration scale published in the regulations.
The Powers of the Decision Makers
The decision makers will have the power to:-
- Uphold the decision of first instance
- Overturn the decision of first instance
- Award costs against the party that was unsuccessful
The Responsible Theatres for the resolution of civil, commercial and residential building disputes
There will be dedicated specialist divisions of Courts and or Tribunals that will specialise in the resolution of building disputes. These specialist divisions will be established by legislation that will empower the designated theatre to have primary responsibility for the managing and resolution of construction disputes.
The jurisdiction will comprise mediators and specialist decision makers, be they judges or referees that facilitate the resolution of building disputes.
The regime will also ensure that in addition to providing accredited mediators there will be accredited expert witnesses whom are venerated by peers of good repute and these expert witnesses will be deployed to diagnose construction failure causation and the costs associated with rectification of same.
Both mediators and independent expert witnesses will be remunerated by the parties on a 50/50 basis to ensure that the costs are born equally. This will ensure that the State does not have to underwrite such deployment.
Judges and decision makers will be remunerated by the state and will be employees of the state judicial systems.
Rationale for dispute resolution system
Building disputes are complex and highly specialist and require the deployment and intervention of specialists with both experience that is tailored to resolve building conflicts that are specific to this area. Ideally the decision makers will have a background in construction law. In the Australian state of Victoria there are a number of dedicated construction dispute resolution theatres such as divisions within the Victorian Supreme Court and the Victorian Civil and Administrative Tribunal. These divisions comprise decision makers that practised construction law prior to their joining the Bench. Their experience belies a natural affinity for the resolution of building disputes.
Mediation will be compulsory on account of the fact that building disputes are very costly affairs. It follows that the sooner a matter is resolved, i.e. preferably at the genesis of the dispute, the less prejudice will be sustained by the disputants on account of “run away” legal and expert witness fees.
The requirement for Court appointed expert witnesses, is to remove the need for adversarial expert argument that tends to characterise plaintiff/respondent litigation. In terms of technical diagnosis there should be no argument, rather there should be clinical analysis of causes of building failure or compromised construction outcomes by one actor, in circumstances where that clinical analyses is:-
- Independent and totally arm’s length of the parties rather than ‘expert for hire’ as it were
- Carried out by someone that is highly qualified and venerated by peers of good repute
- Remunerated in equal shares by the parties to ensure that the impartial deliberator does not need to be funded by the public purse
The Liability regime
10 Liability Regimes
The aggrieved i.e. those negatively affected by a construction outcome that emanate from the negligence of a practitioner will have 10 years to initiate legal proceedings from the date upon which the occupancy permit was issued. 10 years after that period of time has concluded the plaintiff will forfeit the right to sue for damages. There will be one exclusion and that is where the negligence culminates in an injury or death the claimant’s rights to sue will still remain intact.
The system is based upon the Spinetta Law, a very established French liability regime that has underpinned French Liability Laws for many years. The concept has also been adopted by many Australian jurisdictions.
The rationale for adoption is that the limitation period is non-contentious as there is a clear and defined period for the initiation of legal proceedings i.e. 10 years, post issue of an occupancy permit. Furthermore it is well established by insurance actuaries that by the tenth year, the incidence of claims emanating from a construction output dating back ten years prior, is nigh on non-existent; hence there is more than ample time within the ten years for the aggrieved to initiate legal proceeding as the defect that was consequential upon negligent construction would have revealed itself.
This doctrine dictates that each practitioner that is responsible for his, her or its contribution to a construction failure will be found liable, for a percentage that is commensurate with or equal to the practitioner’s liability. When a number of practitioners’ are found liable for a negative construction outcome, the judge will apportion the liability between the defendants in the shares that the judge considers equate with their liability.
Proportionate liability complements a compulsory registration and mandatory insurance regime in that all parties responsible, in their being licensed are also insured. This enables them to financially account for their failure. It is a fair doctrine in that accountability is measured and judged having regard to the allocation of contribution for construction failure.
The system was introduced to the Australian States and Territories in the early nineties and has been well received by consumers and practitioners alike on account of its inherent fairness and jurisprudential logic.
It is considered that the best way for building control to move forward is for regulators to go back to the fundamentals, back to the drawing board. As building control is very much an internationally interconnected paradigm in the 21st century the pressure for regulatory harmonization is much greater not only within the context of local settings, be they Federal or non-federal but also ‘pan country’, ‘pan pacific’, ‘pan northern hemisphere’.
Best practice building control must be holistic, reminiscent of a jigsaw puzzle that can never be complete unless every component of the puzzle is incorporated into the complete picture. To leave out one piece of the puzzle is to generate an imperfect outcome and in the case of the design of building regulation that can be fatal, literally. The completed picture must be designed to eliminate construction deaths, minimise negative economic consequences, and reach a balance of building efficiency with robust building control mechanisms.
Consistent with the globalization of markets, products and systems is the need to develop internationally best practice building regulations that are inspired by precisely that: international best practice. The comfort factor associated with looking within is becoming less and less viable. One of the reasons the emerging Asian economies are progressing so remarkable quickly is their willingness to be at the cutting edge, their willingness to be the best, to adapt and evolve. They are not held back by the inertia of the past or even the present for that matter. Progress requires embracing the future and recognising that building regulation is not concrete (in that once the concrete is set its pathology is such that it must not move). Regulation has to be designed so that it can move to ensure that it can adapt and be living rather than static in terms of its ability to evolve.
About the author
Kim Lovegrove RML FAIB is a general counsel at Lovegrove and Cotton lawyers. He is Senior Consultant to the World Bank and a law reform adviser having been deployed in an advisory capacity in Japan, Australia, India and China. He is a past conjoint professor in building regulation and certification. He is the Ethiopian Honorary Consul to the Australian State of Victoria.