One of the many changes introduced by the Building Safety Act 2022 (BSA 2022) relevant to those in the construction industry is the change to limitation periods for claims under the Defective Premises Act 1972 (DPA 1972) and the Building Act 1984 (BA 1984). These changes come into force on 28 June 2022. If you think your liability period for a project is only six or 12 years, it might be time to think again.
Building Safety Act 2022 changes to the Defective Premises Act 1972, Building Act 1984 and Building Liability Orders
For a claim that a dwelling is unfit for habitation under section 1 DPA 1972, prior to the BSA 2022, the limitation period was six years. For claims accruing before 28 June 2022 (i.e. works completed), the limitation period will now be extended retrospectively to 30 years – allowing for claims in relation to projects that developers, contractors and consultants had previously considered well beyond the limitation period for any claims. Section 1 claims relate to the provision of the dwelling only (its original construction). Claims that have previously been settled cannot be re-opened and a claim which breaches a defendant’s human rights must be dismissed. For section 1 claims accruing after 28 June 2022, there will be a prospective 15-year limitation period.
The BSA 2022 also introduces new section 2A in the DPA 1972. This extends the right to claim under the DPA 1972 for any work carried out by a business to a dwelling, such as refurbishment works. Claims under section 2A can only be made for claims that accrue after 28 June 2022 and will have a 15-year prospective limitation period. Remember that the DPA 1972 applies to dwellings of any height, not only high-rise properties. The Civil Liability (Contribution) Act 1978 might allow a defendant of a DPA 1972 claim to claim a contribution from another party involved in the works, but that will depend on the facts in question.
Section 38 of the BA 1984 is also expected to be brought into force by 28 June 2022 – this is a general right to make a claim for damage caused by a breach of the Building Regulations. This relates to any building in England and Wales, not just dwellings. This change won’t have retrospective effect, but claims can be brought under section 38 for claims accruing after 28 June 2022 for 15 years. Claims for pure economic loss are within the scope of a DPA 1972 claim, but it is not yet clear whether this will be recoverable in claims under section 38 BA 1984.
Developers, contractors and consultants that are (or ever have been) part of a group of companies, should also be alert to Building Liability Orders (BLOs). If it is just and equitable to do so, the courts can make a BLO to extend liability incurred under the DPA 1972, section 38 BA 1984 or other claim arising from a building safety risk, to associated companies. Parent and sister companies may therefore find themselves jointly liable for a claim against a group company, which might have been a project specific SPV, even where that group company has been dissolved.
What should you do?
From 28 June 2022, claims may be brought under section 1 of the Defective Premises Act 1972 in relation to dwellings constructed in the 1990s. For claims accruing after 28 June 2022, the limitation period will be 15 years for claims under sections 1 and 2A DPA 1972 and section 38 BA 1984. If you haven’t already, it’s time to re-consider your retention policy for contracts, documents and project records, and review your previous projects to consider where liability might now exist.