Are claims against builders and designers under the Defective Premises Act about to increase significantly?
There have been some far-reaching changes to the 1972 Defective Premises Act recently, which open up the liability of builders and designers significantly for poor design / construction. In this article, we look at how this might affect those involved in the subsidence industry. Firstly though we need to say that we are not lawyers and are not seeking to give legal opinion which can be relied upon. We are just exploring possibilities and raising questions. Before taking any action in pursuit of a DPA claim, people should seek their own expert legal advice from a specialist lawyer.
Until 2022, the 1972 Defective Premises Act was rarely used to pursue recoveries against builders or designers following subsidence resulting from defective design of foundations. It had a 6-year limitation period, and only the original purchaser of the house could bring a claim, and it only applied to new houses (not subsequent work on them). Following the Grenfell enquiry, the 2022 Building Safety Act was passed which (amongst other things) extends the limitation period for DPA claims to 30 years (if the duty was owed before 28th June 2022) and enables subsequent owners of the property to bring a claim against the original builder, designer or developer. It also introduces a new section 2A which extends the duty (to design and build properly) to those involved in “taking on work in relation to any part of a relevant building”. So the duty now applies to contractors and professionals providing extensions, alterations and other work on dwellings (which was done after 28th June 2022) with a 15 year limitation period.
For a more detailed assessment of the changes, see a series of articles from expert barrister Andrew Butler KC here;
https://tanfieldchambers.co.uk/a-golden-age-for-defective-premises-act-claims/
https://tanfieldchambers.co.uk/defective-premises-act-claims-the-fitness-for-habitation-test/
https://tanfieldchambers.co.uk/defective-premises-act-claims-the-measure-of-damages/
So how might this affect structural damage following subsidence or heave?
There are a series of tests to pass before a claim can be brought;
1. Breach of the duty under S.1
“…to see that the work which he takes on is done in a workmanlike or, as the case may be, professional manner, with proper materials, and so that as regards the dwelling it will be fit for habitation when completed.”
2. Having established a breach of the the duty, what is then needed to restore the claimant back to the position they would have been in had the breach not occurred?
3. That the claim is brought within the appropriate limitation period
Subsidence or heave relate to ground movement beneath the foundations, and the designer / builder is responsible for deigning/constructing the foundations so that the risk of this is minimised. It was held in the 2009 case of Bole v Hunstbuild that heave damage to a house built on foundations which did not comply with NHBC Standards for depth passed the tests and a DPA claim succeeded against the architect and contractor.
There is a big difference between a property being “uninhabitable” and one “not fit for habitation”. The latter is a much lower threshold and the courts have shown a willingness to consider properties unfit in cases where foundations have not been properly designed / constructed (as in Bole v Hunstbuild and in Harrison v Shepherd Homes). We are unaware of any specific subsidence cases which have been tested in the courts, but it seems logical that the same principal should apply; foundations not to appropriate standards = breach of DPA duty.
In Harrison v Shepherd Homes (a case involving defectively designed piles which settled), the Court said that it was a question of “fact and degree” and in this case whilst the damage caused by the defective foundations (i.e. cracking) did not make the properties unfit for habitation, the defective foundations themselves did.
In both of these cases a major and disruptive remedial works scheme was required – which may well have been key in the courts’ decisions over fitness for habitation. Perhaps in a case of minor cracking which can reasonably be resolved in other ways which didn’t affect habitation (for example by tree removal), maybe the decision would be different? The degree of damage and risk to health/safety or undue inconvenience/discomfort are considered in applying the test, quality defects making the home unsuitable and deteriorating condition (such as progressively widening fractures perhaps?).
The next question therefore is whether the damage is directly due to the breach or not. There is no doubt that climate change is making subsidence more common, and we do sometimes see cases where foundations designed to NHBC Standards still subside due to roots growing deeper than expected. NHBC Standards are devised to try and minimise the effects of root-induced clay subsidence by making the foundation deep enough to be below the zone of influence of the nearby vegetation (at its anticipated mature height – thus future-proofing the building against the growth of existing trees). They are not infallible though, and if it can be demonstrated that the subsidence damage would have occurred anyway (even if the foundations has been built to NHBC Standards) due to extraordinary root growth through climate change, then there is perhaps an argument that the loss is not entirely directly attributable to the non-compliant foundation depth. Against this, it could probably also be argued that the damage would have been less if the foundations had been deeper – so some of it is directly attributable to the depth inadequacy. It might hinge around the amount by which the foundation depth is inadequate and the amount of subsidence which has occurred beneath the proper design depth. The question to ask is what would the damage most likely have been had the NHBC Standards been followed properly? Then what is now necessary to restore the property back to that position?
We would expect the courts not to be too sympathetic towards professionals who have failed to follow the straightforward guidelines laid down in the NHBC Standards, and inclined to lean towards the home-owner who has suffered a loss.
What about work such underpinning, or resin-injection into the ground beneath the building?
If this is covered at all by the DPA it needs to have been done after 28th June 2022. If so, then does it count as “work in relation to any part of a relevant building” – the new s.2A duty which applies to anyone taking on such work in the course of a business? We think it would – though the question has never (to our knowledge) been argued in court. We would argue that as such work is intended to stabilise a subsiding building, if it fails to do so and it should have been reasonably predictable that it would so fail, then the DPA duty is breached.
It’s then necessary to demonstrate that this failure has directly caused the loss – which is again where climate change or new intervening factors might be regarded as contributory. Clearly if trees were planted after the work was done which caused subsidence years later then that would not be directly attributable to the underpinning, but if any which were there at the time went on to cause subsidence then perhaps that would be regarded as directly attributable? In the same way that NHBC Standards are supposed to future-proof a new foundation against known subsidence risks, perhaps underpinning should be viewed similarly?
These are uncharted waters legally speaking, though there are potentially discussions to be had over the extent of the new s.2A DPA duty. Not necessarily a matter for the courts to decide at this stage, but discussions with builders & designers (and their insurers) over settlement of such claims.