Articles

Introduction

It is 30 years since the proclamation of the Victorian Building Act 1993. Unbeknownst to some, it was based on a national microeconomic initiative—the National Model Building Act. Here’s some background:

The Model Building Act, initiated by the Australian Uniform Building Regulatory Co-ordinating Council (AUBRCC) in 1990, marked a pivotal shift in how building regulations were developed in parts of Australia.This initiative aimed to create a unified, efficient framework that could address the inefficiencies and inconsistencies prevalent in the building industry at the time. By incorporating best practices from around the world and focusing on key reforms such as liability capping, compulsory insurance, and private certification, the Model Building Act sought to set new benchmarks in construction regulation and consumer protection.

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AUBRCC – the Catalyst

In 1990, the Australian Uniform Building Regulatory Co-ordinating Council (AUBRCC) initiated the creation of a National Model Building Act to streamline building regulations nationwide.

The Rationale for the Project and the Problems with Building Regulation in the Early Nineties

The push for national uniformity aimed to cut costs and increase efficiency by addressing conflicting regulations, which were costly and inefficient for interstate developers, builders and building practitioners. This push was triggered by the national microeconomic regime encouraged by the special premiers’ conference an initiative pioneered by the late Prime Minister Bob Hawke.

The Aims of the Project

1. Develop a world-class model of building regulation.
2. Reform construction liability laws.
3. Establish efficient appeal mechanisms for building permits.
4. Introduce private certification for building permits.

The Methodology

The project was apolitical and driven by a national microeconomic reform initiative, which was a broader effort to improve the efficiency of the Australian economy. The process began with extensive international analysis, involving the selection of best practice concepts from abroad, such as the ten-year liability capping and compulsory insurance models from France, and adapting them to fit the Australian context.

Consultation

Extensive consultations with industry stakeholders, local governments, and trade associations ensured comprehensive input. Stakeholders provided preferences for reforms, including liability capping, proportionate liability, and private certification.

Drafting Instructions and a Model Act

Drafting instructions were prepared for parliamentary counsel, specifically the NSW Office of the Chief Parliamentary Counsel, leading to the creation of the Model Building Act. The Model Act was then distributed to key stakeholders nationwide.

What then Happened?

While the Model Building Act did not become a uniform national law, its key principles were adopted by various jurisdictions over the next decade, significantly influencing building regulations.

The Northern Territory

The NT was the first to adopt the Model Building Act, introducing private building approvals, liability capping, compulsory registration, and insurance for building practitioners.

Victorian Building Act 1993

Victoria followed, implementing a mandatory registration system for key and defined building practitioners. This system required practitioners to be qualified in their respective disciplines, have experience in their vocations, and carry compulsory insurance.

Proportionate Liability: Proportionate liability allocated responsibility among multiple parties based on their contribution to the loss. This ensures each party only pays their fair share, promoting fairness and accountability.

Ten-Year Liability Capping: This limited the period for claims against building practitioners to ten years from the issue of an occupancy permit for the completed building work. It offers certainty and reduces long-term risks for construction professionals, aiding in managing insurance premiums.

NSW

NSW introduced ten-year liability capping and proportionate liability in the late 90s. The state also established a registration system for key building practitioners, although only private certifiers were required to register under this system.

What Was So Pioneering About the Model Building Act?

The Act introduced proportionate liability, ten-year liability capping, compulsory insurance, private certification, and a more efficient dispute resolution system for building permit delivery.

So Did the Model Building Act Reshape Modern Day Building Control in Some Jurisdictions?

Dr. Anthony Lavers a British expert in construction law and building regulation, commented on the profound impact of the Model Building Act, stating: “The reforms in Victoria and New South Wales were nothing short of groundbreaking and set a new benchmark for building control.” Lavers made this observation during a presentation at a construction law conference in 2005. Although uniform legislation was not achieved, the Act provided a law reform template that several jurisdictions adopted. It introduced essential reforms like proportionate liability and compulsory insurance, which improved consumer protection.

Conclusion

The Model Building Act was profound because it introduced pioneering concepts like proportionate liability and compulsory insurance. These reforms significantly reduced local government liability exposure, improved efficiency, and set new standards for building regulations, shaping modern-day building control in parts of Australia. By addressing some of the inefficiencies and inconsistencies of previous regulations, the Act established a more equitable and efficient framework for the construction industry, laying the groundwork for future reforms in building regulation.

Author
This article was authored by Adjunct Professor Kim Lovegrove, who served as the Project Director for the Model Building Act project. He later became the instructing officer to parliamentary counsel in Victoria while serving as the Assistant Director of Building Control during the development of the Building Act 1993.

Disclaimer:

The information provided in this article is for general informational purposes only. It is not legal advice. The views expressed in this article are those of the author only and are not to be taken as reflecting the views of any affiliated organizations or entities.