20th July 2021
Retrospective Limitation under the Defective Premises Act
Some of the most striking legal aspects of the Building Safety Bill (the “Bill”) are that it (a) seeks to extent the remit of the Defective Premises Act 1972 (the “DPA”) and it (b) seeks retrospectively to extend limitation periods under the DPA.
In particular, sections 125 and 126 of the Bill extend the reach of the Defective Premises Act 1972 (the “DPA”) in two important ways. First section 125 extends what is caught by the DPA. Second section 126 increases limitation under the DPA.
Section 125 – extending the reach of the DPA
Section 125 of the Bill will only apply to “…work completed after the coming into force of this section”: unlike section 126, its effect is not intended to be retrospective.
Section 125 (3) (b) of the Bill makes clear that anyone who acquires an interest in a dwelling in the building, whether that interest is equitable or legal, will be owed a duty under the DPA. This should make it easier for people who previously were hamstrung by the way leasehold interests were granted to still make bring claims for problems which arise with the freehold.
The Bill also provides at section 125(1) that if a person A gives instructions to person B to carry out work, then person B can rely on those instructions as a defence to any claim. However, that defence does not apply when person A simply tells person B to carry out a specific design. It therefore seems that for any potential defendant to rely on this provision they will have to show that they acted on specific instructions. Even then the potential defendant still has a duty to warn of “any defects in the instructions”. It will therefore only be in limited circumstances when the potential defendant can rely on the fact that they were given instructions to carry out certain works in a certain way.
The most eye catching changes to the DPA which arise from the Bill are in relation to limitation. Under section 125 (1) (8) the Bill provides that when works are carried out to rectify works already done, then time starts to run again in relation to those further works. On a quick reading of this section it may appear that parties can rely on the DPA for all repair works. That is not quite right as it is only when works are carried out to remedy initial problems falling under the DPA that the new limitation period starts. It would hopefully be the case that if initial works were done to a building which rendered them unfit for human habitation (which is the broad test for liability under the DPA) then remedial works would not cause other problems which similarly left the building unfit for human habitation. Therefore, this provision may not see the light of day very often.
Whilst the changes set out above will only apply to works complete after the Bill comes into force (see section 125 (2)), it may however cause some interesting issues for works which are ongoing when the Bill comes into force as parties working on those projects will find that the duties they owe at the end of the project have expanded when compared to the start of the project.
Section 126 – extending limitation retrospectively
Under section 126 of the Bill, the time period for bringing a claim under the DPA is significantly extended from 6 years to 15 years from the completion of the building. The extension is intended to be retrospective, so in principle it could remove accrued limitation defences.
The Bill does provide (in section 126 (5)) that a court will dismiss a claim against a defendant if it would have been barred by the current six year limitation period and allowing the claim to continue would be a breach of the defendant’s rights under the Human Rights Act 1986. How this provision will work in practice will be discussed in a different note.
Also section 126 (6) expressly states that if a claim was settled or determined before the bill came into force, then a claimant cannot rely on this extended limitation period. It would seem that provision was not necessary as the Bill does not resurrect claims which were compromised, or concluded, but given section 126 (6) there can be no doubt about the position.
Substantial contractors are used to carrying out works under a deed, which brings a limitation period of 12 years, so this is not such a huge change for them. Subcontractors may well feel this more keenly as their liability to any owners of any properties was limited to six years under the DPA. Having said that, under the Civil Liability (Contribution) Act 1976, a subcontractor may find that they face a contribution claim from a contractor two years after the contractor’s claim was concluded.
It appears from the explanatory notes to the Bill that the intention is that section 126 of the Bill will come into force two months after the Bill came into force. Whilst that notice period may be welcome to some developers, it is unlikely that will make any real difference.
Whilst this provision may help some property owners, the Bill may not provide as much increased protection as it first appears. Given the turnover of construction companies, particularly ones involved in cladding, it may be that after 15 years, a number of the potential defendants may no longer be in business.
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