The Week That Was - 6 May 2022

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

The Building Safety Bill receives Royal Assent

On 26 April 2022, the Building Safety Bill completed its passage through Parliament.  It received Royal Assent on 28 April 2022 and is now known as the Building Safety Act 2022 ("the Act").

The Act aims to provide increased protection for leaseholders and to ensure that the industry pays to fix building safety issues.  It also delivers improvements to the assessment of building safety risk.  

From a legal perspective, one of the biggest changes introduced by the Act is that it widens the scope of the duties owed under the Defective Premises Act to include a new subsection 2A, covering refurbishment and rectification works. It also extends the limitation period to 15 years for future claims under sections 1 and 2A, and to 30 years retrospectively for claims under section 1.  This means that claimants will now be able to bring claims against those responsible for the construction of building with fire safety defects on buildings that were constructed at any time since 1992.

The implementation of the Act affects the planning, development, occupation and management of properties.  We await the impact of the Act's passage on all elements of the construction industry, the regulation of it and the professional indemnity insurance market.

A copy of the Act can be found here.

Ongoing costs uncertainty in the construction industry

Despite several companies posting strong financial results, there is ongoing concern regarding cost uncertainties in the construction industry.

Builders' merchant Travis Perkins' reported a recent 17.9% increase in revenue, whilst construction equipment hire firm HSS reported an increase of 21.3% from 2020 to 2021.  A growing interest in energy-efficient projects is also keeping SMEs' order books healthy.

Despite an overall boost in sales, new challenges such as the war in Ukraine and the effect on global supply chains could challenge current stability in the months to come.  Four in five small construction companies have already put their prices up this year, with many expecting to do so again before the summer.  

To read more, please click here or here.

£350m life sciences hub for London

Developers Oxford Properties and Reef Estates have been selected to deliver a 300,000 square foot life sciences hub near London Bridge.
Planning applications are due to be submitted and a team including UrbanR, Perkins and Will, and DSDHA will be involved.

The hub will have world-class lab facilities and will be in the centre of a life science cluster.

To read the full article, please click here.

Application for further information - Evolve Housing and Support v Bouygues (U.K.) Ltd & Ors [2022] EWHC 906 (TCC)

The court considered an application for further information made by the Third Defendant (Stride Treglown Limited, an architect firm ("STL")) to a dispute.  The Claimant alleged that there were fire safety defects in the cladding façade of the property that STL had consulted on.

The Claimant's principal objection to providing the further information was that it did not have full information as to the role played by STL in respect of both design and inspection. STL's position was that (i) the Claimant had failed to particularise its case on causation and breach; and (ii) there had already been enough information disclosed to enable the Claimant to comply with the request for further information.

The court granted STL's application and it succeeded in all of its requests.

A copy of the judgment can be found here.

Increasing number of construction firms in critical financial distress

Begbies Traynor have reported that the number of companies in critical financial distress was almost a fifth higher in the first quarter of 2022 than the same period last year.  However, the figure was higher in the construction sector, where the number of companies in critical financial distress increased by 51%, and the hospitality sector, with bars and restaurants increasing by 42%.

The review suggests that there may be a wave of insolvencies on the horizon, as the economy adjusts post-pandemic, with COVID-19 support loans becoming repayable, support measures ending and inflation rising.

See here for further details.

Thanks to Sharona Zovich, Georgina Haynes and Helen Thomas for contributing to this week's edition.

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.