Law Reform Concepts for Model Building Regulations for 2018 and Beyond
By Kim Lovegrove RML, FAIB, Senior Lawyer, Lovegrove & Cotton
The built ecology, both locally and internationally, has encountered profound, if not unprecedented, change in the last twenty years. Regrettably, building regulations have not evolved with sufficient alacrity and sensitivity to best calibrate with the dynamic and rapidly changing nature of the new building paradigm.
A holistic and best-practice approach to law reform is critical to moving forward. Such an approach must not be governed by provincial drivers, as we live in a world where the building industry is influenced by the headwinds of globalization, as so much of local construction product and construction systems are heavily influenced and reliant upon that which is sourced from abroad.
Architecture has also changed in a profound sense in that SHR (Super High Rises) punctuate and abound in skylines throughout the planet. SHR design and construction renders redundant some traditional approaches to building technology in light of the height, insulation and fire resilience sciences. The emergence of the SHR paradigm and high rise domestic abodes requires a revolution in building control thinking and this has not occurred with sufficient regard to international best practice.
It follows that the building regulation of the now and the future has to be sufficiently ‘elastic’ to keep up to date with a building industry metamorphosis that is gaining momentum. Many building regulatory regimes require major overhaul as they are not sufficiently protective of the public. The net effect of acquiescence has been a proliferation in building related disasters – disasters that have culminated in loss of life; the likes of Grenfell and disasters that have had a profoundly deleterious economic impact upon too many members of the public. On point is the Leaky Building Crises of New Zealand.
This paper endeavours to provide a conceptual template for progressive building control because it is time to take stock and develop building regulations for the future. Lessons learnt in recent times have helped shape some of the recommendations for consideration.
There Will Be Objectives that Reinforce the Fundamentals of Building Control, namely:-
Buildings will be:-
- Safe in all material respects
- fit for purpose
- Structurally sound buildings
- Warm in winter
- Cool in summer
- Immune to the vagaries of climatic tempest
- Conducive to good health with the accoutrements of sound sanitation and plumbing and reliable electricity
- Built in accordance with best practice building regulations and the plans provided to the constructors – on time – on price
- In circumstances of building failure there will be a regime that can deliver swift application of redress.
It is submitted that these key tenets would satisfy the overwhelming majority of members of the public.
There will be A Central Government Regulator (CGR)
The legislation will establish a principal Central Government Regulator along with administrative provisions that will dictate how the regulator operates as a department of the civil service.
For the purposes of this paper, it is assumed that there will be a federal body that produces a national building code such as:-
- The Canadian National Construction Code which is produced by the National Research Council
- The Building Code of Australia/ National Construction Code ( produced by the Australian Building Codes Board)
- The Building Code New Zealand
The code will be kept up to date with respect to the technical requirements and standards for construction.
The CGR will have exclusive responsibility for ensuring that building control is established and maintained in accordance with world’s best practice. This is critical as the provincial approach or ‘jurisdictionally-centric’ approach to building law reform that has assumed currency over the last 20 years has not worked for many legislatures in light of a failure to take on board lessons learnt from abroad.
The CGR will employ officers who will ensure that the legislation and regulations are regularly progressed and are in accordance with international best practice with respect to public safety and enlightened technological advances that impact upon the amenity and quality of buildings.
A senior officer/chief executive officer will be a statutory appointee who will report to a Minister who is identified as being the Minister for Construction.
The CGR will be empowered by statute to:
- Develop and maintain a dedicated Building Act
- Through statutory based authorization, participate with those charged with carriage of developing a national building code, ensuring that it is adopted, maintained and well integrated with and complementary to the Building Act.
- Establish a practitioner licensing body responsible for the annual registration and licensing of building practitioners
- Establish an investigation, probity and auditing regime for building practitioners
- Establish regulations for a mandatory insurance regime in order to ensure that the:-
- Insurance products provide the right type of construction indemnity both with respect to the amount of cover and the type of cover
- Insurance accreditation is reviewed and implicit in that review will be regard to consumer satisfaction regarding the availability and effectiveness of that cover.
- Establish an appeal body empowered with the responsibility of ensuring that appeals with respect to building approval decisions and practitioner misconduct enquiries will be heard promptly.
- Establish a ‘policing the policing’ capability to ensure that those building officials/building surveyors whom are empowered to ensure that buildings are built in accordance with building regulations do in fact make good on that statutory mandate.
- Establish a research capability to ensure that the department, the Minister and the CEO are kept abreast of international best practice building practices.
- Develop or interface with the body charged with responsibility of ensuring that non -conforming manufactured goods either constructed locally or imported from abroad do not find their way into the market place. If no such external accreditation of product regime exists, then the department will establish such a regime or a collaboration which may consist of the accreditation of appropriate testing bodies that in turn test and recommend to the department the accreditation of suitable new product.
- Such accreditation body will maintain a register of accredited manufactured product and will have the power to “de-accredit” product that is proved to be dated, obsolete or not in accordance with international best practice.
The Legislation Will Establish and Maintain Sound Oversight Enforcement and Compliance Regimes
Unless the building regulatory probity regime is capable of protecting the public, the regime will fail. Sound building control regimes never leave things to chance and do not function on the basis that the market will self-regulate and deliver utilitarian outcomes for consumers. Most construction actors are motivated by delivering good construction product. A minority of actors compromise the integrity of the profession particularly if they are primarily actuated by the maximization of profit at the expense of the consumer.
In a worst case scenario, corruption can find its way into building ecology and this can have a profoundly deleterious impact upon the quality of building and end user amenity. Hence, when enforcement regimes break down, the vagaries of the market emerge and the more unsavory elements of the industry are afforded the opportunity to express themselves without restraint. When this occurs, quality plummets and the risk of dangerous building practices emerge.
It is therefore paramount that government adopts a paternalist, intrusive and interventionist approach to the monitoring of building control and the construction process. It is equally important that genuine and venerated consumer representatives make up part of the composition of key Boards, tribunals and key advisory committees, otherwise cronyism can become entrenched which can compromise the public good dividend.
Part in parcel to this is the establishment of enforcement regimes that have ‘early warning detector systems’ – systems that are capable of detecting failure and noncompliance at the earliest opportunity to ensure that problems are identified and dealt with at genesis.
Key Ingredients of Enlightened Probity Regimes
There will be regulations and technical codes that clearly articulate the rules of building. These regulations and codes will be based upon a heritage of best practice approaches to building control. They will be updated regularly and perennially, sympathetic to the rapidly evolving nature of building which is an ‘accomplis’ of technical innovation.
The probity regimes will ensure that as the buildings are constructed, progress is independently scrutinized and approved at key legislated inspection junctures. Best practice building control regimes are inherently cynical as they distrust market forces.
The probity regime will ensure that the building officials are very much in the nature of probity officers, are qualified, preferably with degrees in building surveying so that they have a sufficient level of technical dexterity to determine that which is acceptable versus that which is unacceptable construction practice.
There will be Rigorous Building Approval Processes and a Highly Professional Building Officialdom
Enlightened building approval regimes rely upon the establishment and maintenance of robust statutory approval processes and mechanisms that compel all construction actors to comply with those processes.
The most important professional in the regulatory ecology is the “building official” – the person charged with the responsibility of ensuring that buildings are constructed in accordance with the building regulations. In this paper, the term ‘Building Official’ will be used interchangeably with ‘Building Surveyor’. It follows that best practice building regulation will fully articulate the roles and powers of this paramount building practitioner.
The Statute will provide that building permits can only be issued if the designs and the documents that support the building permit application comply with the Building Act, the apposite building code and the relevant standards and interwoven Acts of parliament.
The building official will ensure that building permits cannot be issued if he or she forms the view that the work does not comply with:-
- The building permit
- The building code
- Any fire regulation requirements
- Other regulations that by law must be complied with.
The official, by law, will be required to inspect the progress of the building work at key and legislatively mandated stages and will only pass the inspections if satisfied that the building work complies with the laws that overarch the approved plans. Such an approval process must be attended by the highest levels of integrity on the part of the building official.
If the building official forms the view that the work does not achieve the requisite benchmark, the legislation will ensure that the building official has the power to:-
- Refuse to pass the building work.
- Communicate in writing why that work was not capable of being passed and that which is required to bring the work up to a suitable standard.
In circumstances where the building work deviates from approved plans or contraventions the law, the building surveyor will issue orders that make mention of the contravention and that which needs to be done to rectify the contravention.
The legislation will provide that a failure for a constructor to abide by the order within the period required for rectification will result in referral to the central probity and oversight body for investigation and prosecution.
The building official will discharge these functions ‘without fear or favor’ in that the official will act:-
- Without hesitation
- In a manner that is immune and impervious to the wishes or demands of a client or practitioner where those demands are at odds with the legislation codes and standards
The legislation will ensure that there are provisions that dictate that a failure on the part of the building official to discharge his or her statutory duties along the above lines will be grounds for serious disciplinary censure; such is the vital importance of that which is associated with the discharge of those functions.
There will be Robust Building Official Qualifications
Building officials will be qualified in building surveying, and the qualification will be robust and purpose designed. The qualifications will be obtained by attending a reputable tertiary institution. Courses will be accredited by the CGR and will only be approved if the qualifications equip building officials with the skills and rigor necessary to understand the relevant Acts of parliament, building codes and standards, and that which constitutes sound construction practices.
The qualification will also have a compulsory unit in construction ethics and probity; the course will highlight the critical role of the vocation and equip the official with an understanding of best practice probity protocols.
There will also be an experience criteria whereby the qualified official will have to serve a formal apprenticeship, with a licensed building surveyor before he or she will be eligible for registration.
Limitations will be Imposed Upon Building Surveyors with respect to Approving Performance Based Designs
Building surveyors will not be able to approve alternative solutions of performance based design proposals unless such approvals have been approved by independent peer review.
The peer review body will be a body established by the regulator that has the power to assess performance based design applications. Such body may be an appeals board or a panel that is established to exclusively deal with such applications.
Conflict of interest provisions will dictate that the peer reviewers will be totally “arm’s length” on any project that relates to the application.
Mandatory Auditing will be a Given.
Building officials will be audited by performance auditors appointed by the CGR annually on at least two occasions. One audit will be without notice.
The auditors be empowered to:-
- Inspect the building officials records and procedures
- Inspection protocols
- Enforcement notice and orders procedures and records
If there is any evidence of recalcitrance, it will be fully investigated and referred to the registration probity regime for deliberation.
The auditing system will be a user-pays regime based upon the law society regimes where the “auditee” has to pay for the audits. This will ensure that the auditing regime has sufficient funds to properly resource a function that is vital to the integrity of the probity regime.
Licensing, Investigation and prosecution regimes
A best practice licensing regime will ensure that the legislation establishes a practitioner registration and probity body that will be independent of the CGR to ensure that it operates as an independent body.
All key or principal construction actors will be licensed and registered with a central government controlled registration body. Such is the importance of the registration regime, as the market cannot be allowed to self-regulate.
In the late nineties, the New South Wales government set up the BSAP, a self-regulating body augmented to monitor the conduct of building surveyors. The system failed within a couple of years, as it lacked the financial resources to properly discharge its oversight functions. The writer once heard someone say that if you allow vital professions to self-regulate and self-discipline, it’s like “appointing Dracula to run the blood bank”. Investigation, prosecution and disciplinary decision making requires a bureaucracy which is expensive to establish and just as expensive to maintain. This is the job of the state and cannot be easily outsourced, particularly in an industry where non-conformist building practices can culminate in death.
The licensing body will have the power to both license and remove a licence or, to put it another way, register or deregister.
There will be a licensing arm that will:-
- Establish the qualification and experience criteria for registration
- Resource the regime
- Ensure that the qualification and experience criteria is in accordance with best practice
- Maintain the register of practitioner registration and de-registration
There will also be a probity arm that will carry out investigations and audits:-
- Investigatory and auditing resources
- Ensure that the resources are responsible and have the degree of elasticity to quickly respond to and investigate complaints
Some best practice elements of a sound qualification registration regime will be implemented to ensure that:-
- All actors will have “real” (rather than token qualifications), degrees or diplomas from reputable and rigorous tertiary institutions.
- An apprenticeship category that gives the graduate trainee mentored and supervised training for a couple of years to ensure that that which has been learnt can be applied to practice.
- A code of ethics that is taught, examined and passed to reinforce the paramount virtues of building structures that suit the public and to ensure that quality of product with the public in mind is always top of mind.
The practitioner registration and licensing regime will ensure that key actors in the construction paradigm are registered, namely:-
- Designers i.e. architects and draftspersons
- Building surveyors/officials
- Expert witnesses that give evidence in the resolution of building disputes
In circumstances where recalcitrants are identified, the government will have in place auditing and disciplinary institutions that can:-
And either exonerate if there is no case to answer or punish and remove the recalcitrant from the fraternity of registered building practitioners. The statute-backed enforcement and decision-making institutions will calibrate the magnitude or severity of the professional misdemeanor with the appropriate level of censure. This will range from:-
- And or fine
- Suspension or licence cancelation
- Referral of matters involving corruption to statutory bodies that preside over corrupt conduct such as the ICAC ( NSW) or the IBAC (Victoria)
- In a worst case scenario, such as proven cases of corruption or reckless negligence that causes death, Jail. The Japanese Building Act features such power.
Liability Apportionment Laws will be Fair, Logical and the Accountabilities will lie with Those Responsible.
Proportionate liability, rather than joint and several liability, will be the liability apportionment regime. The proportionate liability regime will ensure that all parties judicially implicated in a building failure are held to account on the basis that their level of accountability is matched with the level or degree of negligence that is proportionate to the factors that culminate in building failure.
No actor or defendant will be liable to assume the liability of any other codefendant. This will ensure that liability apportionment is fair and determined by the defendant’s level of culpability.
Joint and several liability, the traditional British-based liability doctrine still followed in England and New Zealand will not apply. Reason being defendants assume the liabilities of other parties or codefendants in circumstances where others are insolvent. This results in a disproportionate burden of responsibility being attributed to defendants or actors not responsible for the third party contribution to the building failure.
To ensure that the public is protected, proportionate liability regimes will only operate in circumstances where there is compulsory insurance for all building practitioners. Proportionate liability will not be introduced unless the complement compulsory insurance exists, because a failure to legislatively mandate these complements can culminate in the public’s inability to obtain substantial recompense for building failure.
All registrants will be insured with insurance providers that provide indemnification for defective building workmanship or workmanship that is the product of negligent work practices and inputs.
Without insurance, there will not exist the opportunity for members of the public to achieve financial recompense for compromised construction outcomes. It is recognized that insurance is not a perfect panacea but is the best mechanism currently available to deliver financial redress; albeit a mechanism that is often attended by considerable dissatisfaction and disillusionment when relied upon by consumers.
The CGR will be responsible for ensuring that the insurance regime satisfies members of the public who fall victim to compromised building quality outcomes.
There will be an Insurance Complaints Officer
In accrediting insurers that are afforded permission by the PGR to operate in the market place, the regulator will ensure that there is an insurer complaints officer akin to an ombudsman. This person will be tasked with receiving and assessing complaints furnished by members of the public, Tribunals or stakeholders whom are aggrieved by or have concerns about:-
- The time the insurer takes to assess and respond to the complaint
- The bona fides of the insurer in responding and granting indemnity
- The costs associated with pursuing the insurer with respect to the resolution of genuine claims
The insurance officer will then have the power to make recommendations to the CEO as regards whether a formal complaint should be sent to the accredited insurer that gives the insurer the opportunity to provide the appropriate level of redress to the consumer. In a worst-case scenario, the insurance officer may recommend that the insurer accreditation be removed. The legislation will dictate that the CEO must have regard to and act upon such complaint, unless there are compellingly objective reasons as to why those complaints have not been acted upon.
The regulator would also establish the criteria by which the insurer can participate in the market place in addition to establish the protocols for participation and revocation of insurer accreditation.
10 Year Liability Capping
The French based concept of liability decennial, 10 year liability capping will be implemented. This concept ensures that plaintiffs have the ability to issue legal proceedings for building failure for a period of ten years after the building official issues an occupancy permit. The regime brings to bear clarity and non-contentiousness with respect to the period of time that one can issue legal proceedings.
Swift and Efficient Appellate Systems will be established.
There will be two appellate streams; one for appealing the determinations of statutory decision makers i.e. the decisions made by building officials relating to the rejection or the approval of building approval related decisions.
The second stream will relate to findings regarding professional misconduct.
Appealing Statutory Decision Maker Determinations
All Building officials will be endowed with the power to:-
- Issue building permits
- Carry out building works inspections
- Issue construction completion certificates
- Issue enforcement notices and orders
- Alternatively refuse to issue the above instruments
All of these decisions, regardless of whether they are affirmative or in the nature of a declinature, will be capable of being appealed. Time will be of the essence in terms of the progression and resolution of the appeal.
It follows that there must be an appellate regime, be it a tribunal or a Board that is endowed with the power to assess and review the decisions and determination and either uphold the decision at first instance or overturn it. A sound model is the Building Appeals Board of the Australian state of Victoria.
Features of such a regime will be:-
- The members will be government part time appointees – Ministerial nominees to be precise
- Appointees who are well-regarded and have venerated expertise
- A full complement of expertise that is required to make informed determinations
- A membership that comprise a combination of lawyers and technically qualified professionals.
- The system will be swift and the hearings will very rarely take longer than a day or so.
The legislation will ensure that more consumer representatives are appointed to a best practice appeal board to ensure that decisions take on board public dictates.
The Resolution of Civil Disputes will be More Efficient and Better Integrated
As there will be in existence an established dispute resolution regime for the resolution of disputes concerning defective building work and contractual conflicts, the legislation will not create new Tribunals or Courts. The legislation will, however, generate regulations that interact or ‘dance with’ the Acts of Parliament that govern dispute resolution to ensure that the matters that enhance the efficiency and cost of dispute resolution are best practice. This will mean that the intervening Acts of parliament will amend their respective statutes to ensure that:-
- Expert witnesses giving evidence in building cases are registered and accredited with the registration body.
- Mediation is made compulsory at the outset of a building dispute
- Tribunals or courts that are empowered to hear building cases will ensure that only registered expert witness are permitted to give expert evidence and, moreover, there will be a regime in place which enables such bodies to appoint the experts to give evidence in contested matters
- The experts will be remunerated by the disputants on a fifty/fifty basis to ensure that the system is both user pays but also guaranteed impartial expert opinion
- Legislation will also provide that the party that loses the case will pay the entirety of the victor’s legal fees on a full indemnity basis and will be required to provide reimbursement for the victor’s court expenses and the reimbursement of the fifty percent paid for expert evidence.
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 twenties 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 encounter 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 premium levied finds its way into the regulators 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.
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.
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 aluminum 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.
An 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.
Restrictions will Be Imposed Upon those whom Utilise Performance Building Codes
Australia and New Zealand have had performance building codes since the mid-nineties. There is little doubt that performance building regulation has afforded more flexibility and innovation and has also lowered the cost of building on account of the benefit of innovation being a much greater variety of means by which one can design buildings.
There is nevertheless a critical mass of disenchanted members of the public that are very vocal about their reservations concerning performance codes, alternative solutions and the inherent flexibilities of the newer system. There is also a consensus amongst this constituency that performance regulations have lowered the cost of building on account of an opportunity created to use cheaper construction methods and products.
Another criticism is that building surveyors are afforded far too much discretion to sanction and approve performance-based solutions via the non-prescriptive pathway.
Performance building codes will only operate when:-
- Building surveyors, regardless of whether they are of the private or public sector derivation, are legislatively prevented from approving performance based designs.
- Performance-based design applications are referred to independent peer review and the peer reviewers are totally “arms-lengthed” from the application and the parties that submit the application.
- The panel members are appointed by government and the basis of such appointment is that they are venerated, highly qualified and by the same token have a consumer representative as one of the experts presiding with the decision.
Invitation to Comment:
The writer has endeavoured to identify some of the key factors that make for best practice building regulation. The writer does not enjoy a monopoly on best practice insights and thus invites readers to comment on the paper in the commentary section. There is one caveat however comments must be constructive, progressive and solution-focused. This piece is not about ‘shaming and naming’, recrimination nor is it of ‘the rear view mirror’ orientation. Comment is sought that will contribute to a best practice building regulatory metric, and useful and constructive comment will find its way into the paper by way of direct quote and footnote. The paper will then be presented at a national law reform think tank that will take place in February 2018.