Global menu

Our global pages

Close

Building Safety Bill passes House of Commons with 30 year limitation period amendment for retrospective claims under s.1 of the Defective Premises Act 1972

  • United Kingdom
  • Construction and engineering
  • Construction and engineering - Articles

26-01-2022

Background

On 10 January 2022 Michael Gove, Secretary of State, raised speculation that there could be a 30 year limitation period for defective cladding claims in high rise buildings. Gove requested in a letter to the housebuilder industry that they meet for roundtable discussions with information that they have on all buildings over 11m high, which they had played a part in constructing over the past 30 years.

At that stage it was unclear if this represented a serious intention by the government to make changes to the Building Safety Bill and amend further the limitation period for defective cladding claims. The Building Safety Bill, as introduced on 5 July 2021, had already caused surprise by amending the 6 year limitation period for claims under s.1 Defective Premises Act 1972 (the “DPA”) from 6 years to 15 years (which was to apply both prospectively for future work and retrospectively for work that had already taken place).

Amendment in the House of Commons

In the House of Commons on 19 January there were calls that the 30 year limitation period should be included as a matter of law. On 20 January a revised draft of the Bill passed the House of Commons. This now includes the amendment that claims under s1 DPA shall have a retrospective 30 year limitation period.

S.1 DPA provides a statutory right of action for any person who acquires a legal or equitable interest in the provision of a dwelling, so that work is done in a workmanlike, or as the case may be professional, manner with proper materials so that the dwelling is fit for habitation when completed.

The revised wording, as issued on 20 January, features in s.119 of the Building Safety Bill. The Bill retains a 15 year limitation period for prospective claims under s.1 DPA. The 15 year limitation period fors2A DPA (when undertaking work to an existing dwelling or converting a building into a dwelling) and s.38 Building Act 1984 (for breach of the building regulations), have also been kept as originally published.

Speaking in the House of Commons on Wednesday 19 January, MP Christopher Pincher said, “Since the introduction of the Bill, it has become clear that a number of buildings affected by cladding and other serious fire safety defects were completed prior to 2007….That is why we tabled Government amendment 41, which will retrospectively extend the limitation period for section 1 of the 1972 Act to 30 years, meaning that there will be access to this route of redress for buildings completed from mid-1992 onwards. That represents a substantial extension beyond the current six years. I recognise that changing the law in this way is unusual and that 30 years represents a long limitation period. However, I consider that the exceptionality of the current circumstances in respect of cladding and other serious fire safety defects warrants the longer retrospective limitation period of 30 years.

The Bill is currently being reviewed by the House of Lords and will have to pass both a report and committee stage before it becomes law. It is not known for definite if this amendment will be approved, although its passage in the House of Commons shows that it is strongly supported by government

Legal implications  

  • s.1 DPA applies to the “provision of a dwelling”, so the 30 year limitation period will only impact works that were for the construction of new dwellings. It does not apply to works that involved the repair, refurbishment or change of use to an existing building
  • s.1 DPA provides a statutory right of action for anyone who commissioned or acquires a legal or equitable interest in the dwelling. This creates opportunities for those who might not otherwise have been able to make a claim due to the absence of a contract. This provision affords a remedy to a wide range of potential claimants
  • there is a defence to s.1 DPA under s.1(2) DPA, whereby if a party was following another’s instructions then they will not be liable, except to the extent that they had a separate duty to warn. This means that those acting as sub-contractors or sub-consultants may be able to raise this as a defence to any direct claim against them. It is therefore likely that main developers or housebuilders will shoulder the burden of claims. This approach has been the source of much criticism in the industry
  • there had already been concern that the 15 year limitation period would make it difficult for defendants to flow down liability to their supply chain (with contracts either having a 6 or 12 year limitation period, depending on whether they had been by hand or by deed). This has been compounded now with the increase to the 30 year limitation period
  • the 30 year limitation period may also create additional difficulties for developers or housebuilders to defend claims due to the lack of key information from archives or absence of personnel.  There had been concerns that the extension of the limitation period would create problems under the Human Rights Act 1998 as it interferes with a defendant’s right to a fair trial. This remains a defence under the Building Safety Bill, however it is unclear how this could play out in practice
  • the amendments to the DPA are not limited only to fire safety or defective cladding claims – but to any defective workmanship or materials in the provision of a dwelling making it unfit for habitation. This could potentially open up new sources of claims not initially intended by the Building Safety Bill
  • although key terms such as “unfit for habitation” have already been considered by the courts (such as in Rendlesham Estates plc and others v Barr Ltd [2014] EWHC 3968 (TCC)), it is expected that further case law may follow in interpreting the provisions within the DPA as it will be a source for much future litigation
  • the change to the 30 year limitation period for retrospective claims is created by the new section 119(4), which states:
Where by virtue of section 1 of the Defective Premises Act 1972 a person became entitled, before the commencement date, to bring an action against any other person, this section applies in relation to the action as if the reference in subsection (1) to 15 years were a reference to 30 years.

The commencement date has been defined as the date upon which s.119 comes into force.  In practice, this could lead to what appears to be an arbitrary distinction, whereby one party could have a 15 year limitation period, whereas another could have 30 years on the turning of date set by government.  Also, as the potential claimants are those who commissioned, or have a legal or equitable interest in, the works it could be hard to establish at what point in time they acquired the right to bring an action for the purposes of establishing which limitation period applies.

Eversheds commentary

Although the intention behind the government’s action is clearly to afford a right of redress for as many wronged parties as possible, there are concerns at how the law is being manipulated to facilitate this.  Extending the limitation period retrospectively to 30 years is legally unprecedented and the interpretation of these provisions may create additional and costly litigation as claims progress through the courts.  Without information on when the “commencement date” is, the cut off between the 15 year and 30 year limitation period seems highly subjective and difficult to determine.

There are also continued shortcomings with the solution proposed.  s.1 DPA claims under the DPA relate only to the “provision of a dwelling”, meaning that unsafe materials that were used in refurbishment or conversion works will not benefit from the retrospective limitation period.  Also the s.1(2) DPA defence for those acting under another’s instructions, means that sub-contractors and sub-consultants may avoid liability and the majority of claims will be shouldered by mainstream developers.  It seems unfair that those responsible down the supply chain may not be held to account.  This is heightened by the fact that there may be no contractual redress against these parties either due to the retrospective nature of the claims and the fact that contracts that have already been entered into have either a 6 or 12 year limitation period. Most document archival policies are only for a period much less than 30 years, and so developers could be seriously hindered in defending claims. 

This is a worrying time for developers who are no doubt conducting audits to assess their potential liability and retrieve available information on these claims.   The Bill is currently being reviewed by the House of Lords and there may be further amendments before it is passed into law.