The Week That Was - 1 September 2023

Welcome to The Week That Was, a round-up of key events in the construction sector over the last seven days.

Government Introduces Three-Pronged Commencement Definition

The Government has introduced amendments to Building Regulations following a year-long consultation.  One change splits buildings into three categories with separate rules as to when building work is deemed to have started.

Construction on complex buildings is deemed to have started when the foundations supporting the building and the structure of the lowest floor level are complete.  For non-complex buildings or horizontal extensions, all foundations, any basement level and the structure of a ground-floor level must be completed before work will be considered to have started.  For any other building work, it will be when 15% of the proposed work has been completed.

This is in response to concerns that the Government's original single definition of commencement was set too far into the building process for complex sites.

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Falling material prices fail to prevent build-cost rise

Southern Construction Framework (SCF) has conducted a survey from eighty subcontractors across four southern UK cities, revealing a 3% increase in building costs over the past quarter.

This upward trajectory contrasts with a 1.3% fall in material prices observed in June, along with a 2% drop over the last year, as indicated by Department for Business and Trade data.  Notably, consultancy firm Linesight has also noted significant material price reductions, particularly for copper, in the previous quarter.

Kingsley Clarke, SCF's operations lead for the South West, points out that the reduction in material costs has not translated into corresponding savings for subcontractors.  This discrepancy is likely due to a delay in the reflection of material cost reductions on overall build expenses.

The SCF, in collaboration with its trade supply chain, anticipates a 4% growth in building costs by April 2024.  A similar projection comes from the Building Cost Information Service (BCIS), estimating a 3.2% increase during the same period.

The report warns against assuming an immediate reduction in build costs, noting the persistent pressure on construction materials. Additionally, the report highlights the growing labour costs, driven by workers' cost-of-living constraints and increased staff turnover, which are expected to keep overall expenses elevated in the near future.

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Department for Education urges schools to prepare evacuation plans for unsafe buildings

The Department for Education (DfE) has issued a call to school leaders, urging them to create emergency evacuation plans for buildings constructed with potentially hazardous reinforced autoclaved aerated concrete (RAAC).  Recent concerns over RAAC's vulnerability to collapse have prompted the Government to investigate its use in state-owned buildings.

DfE documents, as reported by The Guardian, are instructing schools to ensure that spaces containing confirmed RAAC, even those not considered critical, establish proper contingencies for swift evacuation until safety measures are enacted.  Some students have been informed that they will be learning remotely, in temporary classrooms, or at different schools, with the DfE stating that a "minority" will "either fully or partially relocate" to temporary facilities. The Government has faced criticism for not confirming when a list of affected schools will be published.

Since a school roof collapse in 2018, the safety of RAAC has been questioned.  Having been popular from the 1950s to 1980s, RAAC is notably less durable than conventional concrete.  Last year, the Office for Government Property warned of its potential for collapse.

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Civil Justice Council publishes part one of its final report on Pre-Action Protocols

The Civil Justice Council has published the first part of its final report on the Pre-Action Protocols.  This follows the publication of its interim report in November 2021.  The final report examines the role of the pre-action protocols, the potential benefits of digitalising pre-action processes, and the place and content of the Practice Direction on Pre-action Conduct. 

Recommendations include: amending the overriding objective to include express reference to the need to comply with and enforce pre-action protocols, making pre-action protocols mandatory, adding a question on compliance with the pre-action protocol in the directions questionnaire, streamlining the process for determining costs quantum disputes under Part 8 and CPR 46.14, and creating a separate pre-action protocol for small claims worth £500 or less.

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Strength of underlying claim relevant to application to discharge freezing order against defendant to contingent Part 20 claim

The High Court has held that where the claimant in a contingent Part 20 claim seeks a freezing order against the defendant to the Part 20 claim, the underlying claim against the Part 20 claimant is relevant to whether it has a good arguable case against the defendant to the Part 20 claim and therefore to whether the freezing order (FO) should be discharged.

The judge held that the start point was to establish the principal issues at trial, as those would form part of the inquiry into whether a party had demonstrated a good arguable case.  This standard was required because of the intrusive nature of an FO. An FO applicant must show where and on what basis they expected to recover judgment against the defendant.  This required the applicant to address all the main elements of their case. 

As the defendant / claimant in the contingent Part 20 claim had demonstrated a good arguable case in respect of the aspects of its claim, the application by the Part 20 defendants to discharge the FO was dismissed.

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Authors for this week's edition: Mars Yeung and Ava Mathias

Disclaimer: The information in this publication is for guidance purposes only and does not constitute legal advice.  We attempt to ensure that the content is current as at the date of publication, but we do not guarantee that it remains up to date.  You should seek legal or other professional advice before acting or relying on any of the content.