Alex Clough, Partner
Mishcon de Reya
Hi everyone, welcome to our webinar on the current impacts and future directions of the Building Safety Act. I’m Alex Clough, I’m a Partner in our Construction Disputes team here at Mishcon de Reya. It was recently the seventh anniversary of the tragic fire at Grenfell Tower. As most of you will know the building had been reclad between 2014 and 2016 with a cladding system that was highly flammable and caused the rapid spread of fire across the exterior of the building. Following the fire, Dame Judith Hackitt led an inquiry which concluded that the system of building regulations then in place was not fit for purpose. She recommended a new regulatory framework to address these weaknesses. That new framework was implemented through the Building Safety Act which gained Royal assent just over two years ago in April 2022. The Building Safety Act goes beyond fire safety and has an impact on the safety of a building across its entire life cycle. I tend to think of the Building Safety Act as operating in three parts. The first part is the impact it has on the design and construction phase of new, high risk buildings. High risk buildings are residential buildings over 18 metres tall plus for the design and construction phase, high risk buildings also include care homes and hospitals. These buildings fall within the remit of the Building Safety Regulator for the purposes of building control. The Building Regulator, the Building Safety Regulator was set up last year and is part of the HSC. The Regulator has two objectives, to secure the safety of people in and around buildings in relation to risks from buildings and secondly, to improve building standards. The BSA seeks to achieve these objectives by requiring that new, high risk buildings must pass through three gateways, at the planning, commencement of construction and completion stages. At each of these stages the safety of the building must be demonstrated before the gateway can be satisfied. The second impact of the BSA is the implementation of new requirements for the operation phase of high risk buildings. These include the nomination of an accountable person who is responsible for managing the safety risks of fire spread and structural failure appropriately and engaging with residents in a collaborative and responsive way. Finally, the BSA implements powerful new tools for those seeking the remediation of unsafe residential buildings and the recovery of the costs of such remediation. It’s worth remembering that these provisions apply to both fire safety and structural safety. We have seen a number of claims coming through the courts and the first heard tribunal where claimants have used these new tools and I am aware that there are plenty of claims being progressed. The complexity of the new regime has given rise to novel questions of law and I expect we’ll see a steady stream of cases in the coming months and years.
Now that the BSA has been enacted for over two years and the BSR has been set up for over six months, it’s a great time to take a look at how the new regime is working in practice. Presenting our webinar today, we’ve got Kizzy Augustin, a Partner here at Mishcon de Reya in our Health and Safety team. Kizzy advises clients on all aspects of health and safety and has recently been working with her clients on their obligations during the occupational phase of a building. Adriano Amorese is a Partner in our Non-Contentious Construction team, working with clients at the front end of construction projects and helping them navigate the gateways during the construction phase. Richard Gerstein is a Partner in our Construction Disputes team and has been involved in one of the leading cases on remediation contribution orders. Finally, but most importantly, we have Chandru Dissanayeke from the newly renamed Ministry for Housing, Communities and Local Government. Chandru is the Director of Regulatory Stewardship and Reform in the Safer, Greener Buildings team. Thank you very much Chandru for joining us, we’re really looking forward to hearing about your ongoing work in relation to building safety. And with that I’ll hand over to Kizzy.
Kizzy Augustin, Partner
Mishcon de Reya
Thanks Alex. Well, Chandru, welcome to the webinar. I think I’m looking forward to diving into the BSA in a slightly different way than maybe some others have done but I don’t want to discuss the black letter of the law of the BSA and its content, I hope we can take that as read, all 250-odd pages of it, but there are some key areas that I think have really sparked some interest, particularly for those who find themselves having to meet new or extended obligations so, welcome.
Chandru Dissanayeke, Director
Ministry of Housing, Communities and Local Government
Thank you.
Kizzy Augustin, Partner
Mishcon de Reya
Let’s dive right in. Building Safety Act, BSA. The intention versus reality. Does it do what it set out to do?
Chandru Dissanayeke, Director
Ministry of Housing, Communities and Local Government
Yes, it’s a great question right because as policy officials, we sit in Whitehall and we engage the sector, seeking to try and influence the behaviours of those operating in markets driving productivity and growth and profit ultimately for the organisations they operate in. Now in doing that what we saw from Grenfell was often what wasn’t thought about properly was the residents who inhabit these buildings long after those that designed them, construct them, have moved on and so really the Building Safety Act, the intention here as Dame Judith Hackitt put it was to start to put the residents right back into the heart of thinking in relation to how we design, build, construct and indeed manage buildings in the future. So how do you really get that counterbalance of the drive for profit, productivity and growth, counterbalanced with the need to create really brilliant homes for people to live because ultimately, that will also drive happiness, social growth, economic growth and wellbeing within our society, right, we all want a good place to live. So the intention of the Building Safety Act was just rebalance some of that and recognising that there will always be a small padre of people that wilfully neglect their duties and responsibilities or indeed seek to active irresponsibly. And so how do you drive up the consequence in that scenario so that it detracts and it deters those people from operating in that way. In addition to that, it’s also about bringing much greater clarity as to the roles and responsibilities that we want to see people take and driving accountability into the system and improving transparency, so Alex beautifully spoke about the two intentions of the Building Safety Act, I sort of see it slightly wider than that. I see the Building Safety Regulator and the National Construction Product Regulator as two foundation stones through which we drive cultural change across the sector and we drive behavioural change into the way people operate.
Kizzy Augustin, Partner
Mishcon de Reya
That’s quite interesting. Sorry, sorry to cut you.
Chandru Dissanayeke, Director
Ministry of Housing, Communities and Local Government
Yeah, of course.
Kizzy Augustin, Partner
Mishcon de Reya
I just thought it’s quite interesting, I mean you’ve mentioned quite a few things that have sparked a bit more interest in kind of delving deeper. You talked about Dame Judith Hackitt and you know the comments that she made, rightly or wrongly, about this regime not being fit for purpose. What, what do you see as fit for purpose bearing in mind, you know, in your role as Director for Regulatory Stewardship and Reform, I would, I would take it that the ‘stewardship’ part would include, you know, testing whether or not something is, or this legislation is fit for purpose so, do you think that we’ve got it right here?
Chandru Dissanayeke, Director
Ministry of Housing, Communities and Local Government
Er, don’t know yet, right, so we’re trying something and we are moving here but we need to keep it under review and we need to be humble and have humility in the fact that it may not be working as well as we would like it to in all areas. Also, we may need to tighten up bits in other areas and it will be for this new Government who’s been appointed to really take a look at that and decide how it wants to, wants to move forward but we’re all interested to hear what the Grenfell inquiry says on September 4th, we’re going to need to take stock at that point but we should also be aware that we have introduced a five yearly review in law of the regime, which means that every five years in law, ministers will need to appoint an independent person to review the regime and make sure it is operating in the way it was envisaged and also hopefully highlight areas where it can be improved. Right, so, I’m not going to say that it’s perfect but I am going to say it has absolutely addressed some of the behaviours that we do not want to see out there, right, so you know if you just take Gateway 1, when it was introduced a year and a half ago, the Regulator was declining over 40% of applications and that was due to really badly thought out designs at the planning gateway stage, that has dropped dramatically and people are getting much better applications in at Gateway 1 and so you can start to see a change in the behaviour within the sector and the expectations. That will happen on Gateway 2 and 3 right, there are delays I know going on there and it’s not good enough and we need to get better but that’s the job of the Regulator and it’s the job of industry as well to change behaviours and respond to new expectations.
Kizzy Augustin, Partner
Mishcon de Reya
How do we get round this idea of the demystification of, of the BSA. Look, we’ve all had issues and it’s really quite comforting to hear you say we’re all trying, you know we’re trying to do the best that we can, I presume the Regulators are trying to do the best they can, duty holders are trying to do the best they can to comply but there is this idea that there’s so much of the Act that’s still slightly confusing and, you know, a perfect example is the identification of certain roles. We’ve still got clients who are struggling to understand who is an accountable person, who can be a nominated person for PAP, you know, who could perform the principal designer role and so on? So, how do we further demystify, it seems like we’ve done a bit and as you say, applications that have come through are better and there’s a bit more clarity, there’s still so much shrouded in a bit of mystery so how do we manoeuvre that, how can we advise our clients for example to manoeuvre that?
Chandru Dissanayeke, Director
Ministry of Housing, Communities and Local Government
Yeah, so look, we have published guidance on the roles and who we expect to undertake the roles and who the accountable persons are. The accountable person actually is enshrined in law who that is. The roles, as in principal designers and others, are issued in guidance. Now within all of that, there is, you know, and I understand this, there will be some reluctance from those in the sector having operated under one expectation for decades to suddenly think to themselves actually, I’ve got all of this new roles and responsibilities, am I comfortable, am I right, okay, so I do understand that, but the truth is even in the old regime, although it wasn’t clarified, that was what was expected of you. Now, we’ve just made it much clearer and much harder and so I know RIBA are introducing principal designers for architects and they’ve got a scheme there which they want to introduce and for some architects that might be difficult for them to understand that they have these responsibilities and duties in relation to safety and to the end resident who are going to use their buildings, rather than just designing the building and passing it on to someone else to build, right. And the whole sector is going to have to get used to the fact that there are expectations which are better articulated now in legislation and new guidance that weren’t before and quite frankly, if you’re not willing to take those expectations and meet those requirements, you shouldn’t be in the sector.
Kizzy Augustin, Partner
Mishcon de Reya
Yeah, I mean there’s an element of that and I remember talking to a particular client about the Construction, Design and Management Regs and when that came out and was revised, the 13.11 around who does what became a big issue. Do you think if maybe the CDM regulations had been applied and understood at the time, would we have a need for the BSA?
Chandru Dissanayeke, Director
Ministry of Housing, Communities and Local Government
Yeah, so CDM is specific to health and safety at work for those who are working in and around the site. These regulations really focus on the residents who end up with the building that they live in, right, so CDM doesn’t cover that, the Building Safety Act does, which is the point I was making right at the start of the, of this webinar, which was you know this is about how do we put residents right into the decision-making at the time of design, construction and management of buildings.
Kizzy Augustin, Partner
Mishcon de Reya
And do you think that we’ll be having some further secondary legislation, I know you mentioned guidance, so RIBA have been quite, quite vocal about that. Is there space for further secondary legislation to help with understanding what the, the key issues are?
Chandru Dissanayeke, Director
Ministry of Housing, Communities and Local Government
Look, legislation is always at the prerogative of the government of the day so, I can’t speak for the Government as to what it may or may not decide it wants to legislate on, but what I can absolutely say is, the Regulator and the Government want this system to work well, right, we are committed to housebuilding, there is a 1.5 million statement out there, we are committed to infrastructure build, so we want this regime to work well but we just don’t want any old house or any old building, we want good buildings that meet the requirements of the residents that live in there over the long term and so we’re committed to working with industry to make sure that there is clarity out there but recognising that sometimes that clarity might not be always the way people want it to be.
Kizzy Augustin, Partner
Mishcon de Reya
Let me turn it on its head a little on the kind of point of view of the Regulator. So, we know that the BSR is part of the HSE, HSE we all know and love, now I’m quite interested in the relationship between the BSR and the Ministry and how the BSR may or may not be held to account. I think when I think of your role and thinking of stewardship and directorship and leadership, I think about allocation of resources, I think about management, I think about oversight of accountability and compliance so, what does that relationship look like in practice? You’ve got the BSR, you’ve got an opportunity for the BSR to essentially be held to account if a duty holder isn’t quite happy with a decision, there’s an appeal process but what does that kind of relationship look like in practice?
Chandru Dissanayeke, Director
Ministry of Housing, Communities and Local Government
Yes, so the first thing I should say is, it would, it’s unique for a Government department to have to deal with appeals, right. The idea here is we want the Building Safety Regulator to deal with things in an independent way. So, operational matters should be independent of the Government of the day and should be undertaken by the Regulator according to proportionate standards and guidance which is out there working with the sector so, so that should be the primary route. However, within any primate route, there should also be the ability where things aren’t working for it to escalate to the Department, both so that we can act and resolve issues and that’s usually through adjusting the strategic framework or providing more resource or whatever it is, but also in this unique case, a bit like planning, there is the ability to appeal to the Department for an adjudication, particularly when timelines are breached rather than a decision being not what you like, right, so it’s not about appealing to the Department because you didn’t like the decision, it’s about appealing to the Department because the timelines for making the decision was breached. Now in that scenario, the Department will look to, as quickly as it can, resolve the issue and get to a decision as quickly as we can, but to be clear, we will still be doing that within the operational bounds, guidance, standards which are set out there, it’s not about seeking to do anything other than that but it’s just to provide a failsafe to make sure that the Department knows what’s going on and we can adjust things accordingly. Now, we are, we do provide the budget for the Building Safety Regulator through the Department. The Building Safety Regulator itself sits within the HSE, the Health and Safety Executive and is sponsored primarily by DWP, Department for Work and Pensions. But what we have is an Advisory Committee which monitors and has strategic oversight over what the Building Safety Regulator does specifically and we have regular meetings with the leadership team there both at Chair, Chief Exec and ministerial level to make sure that they are delivering in the way we intended. Now I should say, you know, we are in a transition period, right, so the Building Safety Regulator is just setting up, so with anything there are going to be these tensions and these little areas which bubble up which aren’t quite working in the way that it perhaps was envisaged or you’ll want and we’re committed to working with the Regulator to resolve those transition issues as quickly as we possibly can.
Kizzy Augustin, Partner
Mishcon de Reya
That, I mean again, good to hear, I mean it’s not a new issue. Those who are familiar with the way in which the Health and Safety Executive conduct investigations or even enter into discussions with duty holders, I think there’s been a shift between being the helpful advisory entity and more towards the enforcer and is suppose the anticipation is the BSR will be very much the same, they will act more in a, in a kind of enforcer capacity now we’ve moved from all of the transition periods that we had but it’s good to hear that you, that there is an avenue to at least, I call it hold, hold the BSR to account and it is about those timelines, I think you’re right, it’s about those timelines, it’s not about appealing decisions per se but it’s about the timelines. Where you’ve got duty holders who feel very, slightly aggrieved maybe but they’ve got lots of things to do and they’ve got deadlines to do them, whether it be applying for notices or permission to do works and they’ve got 8 or 12 weeks to do that, it seems that when you turn things the other way, the BSR don’t have those timelines or even if they did, they don’t necessarily have to stick to them and so I think that’s where some of the concern has come from, certainly from a client perspective, it’s how do we get around that without having to go through the very formal route of appealing to the Secretary of State?
Chandru Dissanayeke, Director
Ministry of Housing, Communities and Local Government
There’s really, there’s a few points in there which are fascinating, right. So, so the first is are we interested in the Building Safety Regulator being productive, effective and efficient in delivering decisions? Absolutely. Right, we’re all committed to that but equally, do we want those decisions to be of high quality? Absolutely, right. So, the mistake I would suggest that potentially led to some of what happened in Grenfell and what we see elsewhere in buildings is that we were too worried about speed and not enough concern about the quality of the decision, right, we cannot, we cannot make that mistake again where we are chasing after speed of decision at the expense of putting residents at risk, right, so, so that is a, a no-brainer of saying that, that culture needs to change. Now equally, that doesn't mean the Regulator can take however long it takes, there are set timelines that it should be following and where it’s not, we as a Department are very keen to know and we’re sort of pushing the Regulator, recognising we’re in a transition period and in the transition period two things happen, a Regulator is gearing up to understand the role it’s doing and the capacity it needs but also the industry is beginning to understand what the Regulator wants and how it needs to gear up to meet the needs which are required. Right, so there are two, it’s not a, it’s not a sort of Regulator fault or a industry fault, it’s two partners who need to learn how a new system works and that takes a little while, right. Now what we need to make sure is that delays that happen are not systemically intrenched into a system in an inefficient and ineffective way and the excuse of quality is not given for really poor, ineffective decision making, right. So, so we absolutely must make sure that that is not systemised within, within how this operation works and we’re keeping a close eye on that over the transition period to make sure we’ve got the right capability capacity. Equally, right, this should not be an excuse for people to carry on doing the same things that they have done before. This is a new regime, which requires new information and I want to also be clear, some of the feedback I’m getting from the Regulator is quite a lot of the applications which are being put in, even at Gateway 2, would not have met the old requirements let alone the new requirements. Right, so the sector needs to gear up and change. Now I also understand that there will be pressure on the sector because time is money and when investors have put money in based on one set of expectations and suddenly the timelines get extended, that affects investment decisions. I’m hoping that will ease quickly and we will get to a point where we baseline and then we can improve from that baseline as opposed to the uncertainty which is currently existing out there because no one is quite sure how and when things are happening. I do also want to see communications between the sector and the Regulator improve considerably.
Kizzy Augustin, Partner
Mishcon de Reya
I think that will come.
Chandru Dissanayeke, Director
Ministry of Housing, Communities and Local Government
And the Regulator is helping as well.
Kizzy Augustin, Partner
Mishcon de Reya
Yeah, I think, I think that will come. I’m quite, I mean I’m just drawn by your, the passion that you have towards where you’d like to see the BSA going and the BSR going. What, how did you get into all of this? I often get asked, you know did I wake up one morning and want to be a Health and Safety lawyer? Clearly, not because it wasn’t very fashionable 25 years ago but what, what made you get into kind of building safety and reform?
Chandru Dissanayeke, Director
Ministry of Housing, Communities and Local Government
It’s a, it’s a good question, right. So I am, I’m your typical policy wonk within, within Whitehall and so my skillset is probably intangible and questionable. I mean that… my skillset is really about looking at systems and how you reform systems and so I’ve done that across a variety of different areas previously. I was invited to join this area of work when, soon after Grenfell Tower fire, so in September I was, I was in Cabinet office at the time and I was invited to join in September so I came and joined in September 2017 and really it’s been a huge learning curve, right, so I, I wasn’t part of the sector before, I didn’t know much about it before, it’s been a huge learning curve and I’m very grateful to lots of people out there that, who have, who have educated me and helped me and continue to help me, right, so I also need to be clear, expertise never sits in Whitehall, right and so really, this is about how Whitehall engages the experts which are out there in the field and brings that expertise to bear to make sure that legislation is both fit for purpose and is being delivered in the way it was intended and the outcomes are as intended, right, so, so this is an ongoing process of partnership, it’s not a “We know the answers and we are the experts.” Absolutely not.
Kizzy Augustin, Partner
Mishcon de Reya
It’s ongoing. Yep. And with that in mind and my last question before I get my colleagues to pipe in as well, you don’t have to answer this if you don’t want to but do you think now that we’ve got a change of Government we are going to see the same level of focus and push and drive for real building safety reform, obviously we had Michael Gove, who was very focused on building safety. Do we think we’re going to see the same focus now? What’s your kind of hopes for the future in building safety?
Chandru Dissanayeke, Director
Ministry of Housing, Communities and Local Government
Look, I, I absolutely know that the Government is committed to building safety and committed to making sure that every single resident in this country has the ability to live in a home that gives them the best start and best opportunities in life and I know that is absolutely at the forefront of their mind, particularly as they’re starting to look at how we deliver the 1.5 million new homes, it’s absolutely at the forefront of the mind.
Kizzy Augustin, Partner
Mishcon de Reya
Brilliant, thank you, Chandru. So far, for your observations, don’t go anywhere yet, it’s not all over. Really, really enjoyed listening to your thoughts about where we are now versus where we ought to be or where we are going to be in the future. As you can probably imagine, we’ve had varied experiences of the implementation and the operation of the BSA, both from a legal point of view but also through the lens of our respective clients. Adriano, do you want to kick us off with some of your observations?
Adriano Amorese, Partner
Mishcon de Reya
Yeah, thanks Kizzy. Hi Chandru. So I suppose my observations pick up on a couple of the themes that we’ve already discussed actually and hopefully drill down in a little bit more detail so, the first observation I have relates to the new Building Regulations Dutyholder Regime and specifically the role of the principal designer which discussed a little bit about before and I suppose as someone who specialises in front and procurement advice, I can see that many of our clients are really struggling to persuade their appointed architects to take on the role of the Building Regs principal designer despite the encouragement from RIBA to do so and mainly due to concerns around competency and availability of PI cover. Now when I look at it, at its heart the PD role, the principal designer role is really about managing and coordinating design to ensure that the functional requirements of the Building Regulations are complied with so, it’s really hard when I look at a project team to imagine that anybody on that team would be better placed than the architect to do that, but given the apparent sort of narrowing and shortage of available options, do you think that the direction of travel will inevitably be that the BSR has to take a broader view in terms of who performs the principal designer role sort of in much the same way as the HSE has had to do with the CDM regulations where you know we started off assuming that almost certainly the principal designer role would be performed by the lead designer on a project but invariably it’s ended up being I suppose more peripheral members of the project team.
Chandru Dissanayeke, Director
Ministry of Housing, Communities and Local Government
Yeah, so I think the Act itself remains agnostic, right? And so it can be whoever is responsible and takes responsibility to do it, so we are relatively agnostic in legislation. I should say RIBA are absolutely certain that it should be the architect and certainly when I look at this with a lay eye, it would be, a bit like what you said Adriano, I sort of agree, right. Now, you mention two things there which is people are reluctant because of competency and/or PII cover and both are absolutely relevant. If it was competency, well quite frankly RIBA and ARB and others need to resolve that quickly, right, and architects need to be competent for the work that they are undertaking and if they feel they are not competent, well good, they shouldn’t be doing it, step away, right. So, really clear, competency should not be compromised. PII is difficult, right. We know the market has been hardening, it’s gone through shifts and changes in the last seven years where it was easy, hard, easy, hard and I think at the moment it’s somewhere in between, right. Speaking to some people, they say it’s getting better, other people say it’s getting worse, right, but we’ve got a job to do with PII which is about helping them understand how the sector manages and handles risk and how the people that are taking on these roles are competent enough to take on these roles so I do think the RIBA work around having a register of principal designers or a set of frameworks and continuous development around them is the right thing, I think that will help with PII but really, what the insurance firms are really saying is, look, give us some confidence that you’re competent enough to take on this job, this work, and some clarity and then we can ensure you and I hope that’s the case. If that isn’t the case, we certainly need to look at that space and think about how we, how we loosen it a little bit but competency must not be compromised here, right, it needs to be someone who is competent.
Adriano Amorese, Partner
Mishcon de Reya
Yeah, I agree and looking at it through a more optimistic lens I think what we are seeing is a greater willingness on the part of architects than perhaps we had six months ago to take on the role and I think that’s probably driven by PI insurers being more amenable to, you know depending on terms of coverage, to their insurance carrying out that role and then the messaging from RIBA has been really helpful I think in terms of reassuring the architect profession that actually what they are being asked to do is, to your point earlier, is what they should be doing anyway and it’s what they have been doing.
Chandru Dissanayeke, Director
Ministry of Housing, Communities and Local Government
But if you don’t know Building Regulations right, how the heck can you operate as an architect in this country?
Adriano Amorese, Partner
Mishcon de Reya
Yep.
Chandru Dissanayeke, Director
Ministry of Housing, Communities and Local Government
It’s just like, it’s a no-brainer, isn’t it?
Adriano Amorese, Partner
Mishcon de Reya
Yeah, I agree. And so my second observation it picks up on this, of slightly different theme but related of course, it’s picked up on the paranoia around the BSR’s ability to hand on and respond to the volume of applications that it’s expecting so, we’ve been very focussed on the transitional arrangements and as you can imagine there’s been lots of manoeuvring and people trying to make sure that they fall into the transitional provisions to avoid the rigours of the new Building Control system. Now we’re out the other side of that, I think there’s a lot of concern around particularly on projects involving high risk buildings, the potential for delays at Gateway 3 and as you alluded to earlier, the implications that can have for project completion and occupation and the adverse implications that that has economically. And as we discussed, where a decision hasn’t been issued by the BSR within the statutory timelines and an extension hasn’t been agreed, you’ve got, you have got the option to submit the non-determination application to your department but that’s a slightly opaque process isn’t it which doesn’t really offer any guarantees in terms of, in terms of the timing and outcomes so, I suppose two questions from that, one is do you think clients are right to be concerned about the BSR’s capability at the present time? Do you see that improving? And in reality, will MHCLG have the capacity to handle what could turn out to be a large volume of applications whilst any teething issues are worked out within the BSR?
Chandru Dissanayeke, Director
Ministry of Housing, Communities and Local Government
Look, my hope is the number of cases we get are zero to er, that’s not to say that we won’t be ready to take them on and that’s not to say that we shouldn’t publish guidance on how we intend to do that and the timelines that we would like to hold ourselves to that. That must be the practice and that must be something we do, right so, as a department, I am not letting us off the hook, I am working my teams quite hard to work through all of that and publish stuff and do stuff, right, so I want to be, I want to be clear about that. However, like I said, I want zero cases coming to the department because the best place to make, determine cases are, is in the Regulator that has the resources and the ability to determine those cases best. So my encouragement would be for any clients to work with the Regulator to achieve that. Look, can I, can I give you a cast iron guarantee over this transition period that we are going through that the Regulator has absolutely all the capacity and capability that it needs to deliver. I can’t, but I’m talking to the Regulator regularly, they are assuring me gearing up in places. I know that there are some cases which are extending. I know in those cases the Regulator is reaching out to the clients and asking whether by mutual consent those cases can extend. I would encourage clients to work with the Regulator on that. I also note the Regulator is looking at its internal processes to think about how it can work more effectively across these, right, so, so I do accept there’s a, there’s a period of uncertainty while the new regime embeds, beds in and we’re getting the first few cases going through Gateway 3 and Gateway 2. I’m sorry but I would encourage us to bear with the Regulator and make sure that we get those processes right so that when the next cases come through, they come through quickly and easily rather than seeking to escalate immediately and driving an alternative process which doesn’t resolve the issues and the primary process. It’s in all of our interests to get the primary processes through the Regulator working well, not in our interest to look narrowly at an individual scheme and think about how quickly to make it across the line. I can assure you, it will always be quicker through the Regulator than going to the department.
Adriano Amorese, Partner
Mishcon de Reya
Yeah, thanks Chandru, that’s encouraging. I was also encouraged by what you said earlier as well about the quality and sophistication of the applications improving as the market becomes more I suppose drilled in terms of what the BSR’s expectations are when it comes to applications.
Chandru Dissanayeke, Director
Ministry of Housing, Communities and Local Government
There needs to be more communication as well, right, between the client and the Regulator, so there needs to be more communication and I hope that improves over time as well.
Adriano Amorese, Partner
Mishcon de Reya
Yeah, and I think Government has been clear about the advantages of early engagement with the BSR as well to make sure that the process is expedited and any sort of potential delays are headed off at the pass so that’s, yeah, consistent.
Chandru Dissanayeke, Director
Ministry of Housing, Communities and Local Government
But never at the expense of quality decisions, right.
Adriano Amorese, Partner
Mishcon de Reya
Of course.
Chandru Dissanayeke, Director
Ministry of Housing, Communities and Local Government
Quality decisions are paramount.
Adriano Amorese, Partner
Mishcon de Reya
Yep. Thanks Chandru. Kizzy, hand back to you.
Kizzy Augustin, Partner
Mishcon de Reya
Ooh sorry. Who’s next? Alex? Or was it Richard? Richard. Over to you Richard.
Richard Gerstein, Partner
Mishcon de Reya
Hi Chandru. I’m going to take you to a completely different part of, of the legislation. I’m involved in advising developers, contractors and, and residents on the impact of the Act and some of the problems that they’re now suffering as a result of defective cladding, defective insulation and how they get round or how they ensure that the works that are necessary are carried out. And I was quite intrigued by what you said in your introduction because you talked about the importance of the residents and the one problem that I’m coming up against time and time again when I’m acting for the groups of residents who have cladding issues which need to be remedied, is that if they seek, you know, justice through the courts or in this case through the First Tier Tribunal and they go for remediation orders or remediation contribution orders, they’ve got no ability to recover the legal costs that they incur in those proceedings, which is of course is very different from what would happen if they were bringing their claims in the courts. Is that something that is, the Ministry have picked up on that they are aware of? Is that something that there’s something might happen with going forward?
Chandru Dissanayeke, Director
Ministry of Housing, Communities and Local Government
Yes, so look, we did think about this quite hard actually, when we were introducing the Act and we felt it was a lower barrier for people to go in with certainty around their costs to take action against others rather than being left open to have to pick up the other party’s cost if they lost, right. So this was about how do we provide certainty to the individual leaseholder that wants to act against a big corporation and not be worried about suddenly being landed with that big corporation’s legal bill as a result of losing their case, right. So there was a balance here between enabling costs to be recovered versus reducing the barrier to enable people to, to take costs. You know, I should be clear, we also have the Recovery Strategy Unit which is also taking, is also acting to take big developers and contractors to court and through the system to make sure that residents are being protected and that sits in the Department and has several cases outstanding at the moment but hopefully you know, as case law starts to develop and it moves up the different tribunals, we should see these cases become cheaper and quicker for residents but I do, I do accept that there is a, there is a barrier at the moment, right, because it costs to bring things to court.
Richard Gerstein, Partner
Mishcon de Reya
I’m quite intrigued by that answer and the reason I’m intrigued by it is, is that the other point that I picked up from your introduction was you were talking about unscrupulous developers and I’m afraid in, in my line of work, you know when we’re involved in litigation, certainly when, you know, there are businesses that there are, there are companies, there are developers in particular who, who might play the long game, who might think that they can squeeze out the, the individuals, small group of individuals if they play their long game and drag out, drag out the litigation, drag out the court hearings, whatever it’s going through. Now, they have the advantage in those, in the circumstances where there is no ability for the, for the residents to recover their costs. Now, whilst it should be a fairly simple process and when one appears in the tribunal, you can see conceptionally that it might be but the reality is we’re dealing with a brand new piece of legislation, it is complex, it is changing regular as new legislation and new statutory instruments are introduced, residents can’t keep on top of that so they’re having to engage lawyers, they are being prejudiced in my eyes by the fact that they can’t recover the costs, so actually, it seems to me it’s having, it’s having the reverse of what you intended.
Chandru Dissanayeke, Director
Ministry of Housing, Communities and Local Government
It depends, right, Richard, because I am seeing residents take cases and win, right, so, so, there is a, there is a, you know, if you can show me sufficient evidence of people who are not being able to do it, I’m really interested. I’m not saying that all legislation is all right, we need to keep it under review. At the same time what I would say is, there is a separation between getting the works done versus pursuing those who have done the wrong thing. And getting the works done within the Act made it very clear it’s the responsibility of the landlord, freeholder, however you would like to describe it, to undertake the works and it only permits those costs to be passed onto leaseholders in specific circumstances, right, so there is something here about the landlord and the freeholder getting the works done. I should say as well, the Building Safety Regulator, particularly for buildings above 18 metres, is doing the five yearly inspection, right, so at some point those people that aren’t getting those works done will be caught and will be driven and will either lose the ability to manage their buildings and all of the income generated from it or will need to get those works done so, so, the pathway to making those buildings safe for the resident is there. Now the pathway for holding those responsible for account, I accept is harder, right, and that’s why we’ve created the Remediation Contribution Orders and etcetera, but it is harder, but there is some success. I was speaking to one freeholder who was telling me they’re expecting to get 80% to 90% of their costs back from those responsible for doing the works initially and that is through the Act. So, do we want all leaseholders to be taking action against those responsible? No, we want leaseholders and residents to be safe and we want the freeholders and the landlords really to be taking the action against those who are responsible.
Richard Gerstein, Partner
Mishcon de Reya
I wish I, I saw it quite from the, from your angle but maybe I can talk to you about some specific examples offline. Probably not appropriate.
Chandru Dissanayeke, Director
Ministry of Housing, Communities and Local Government
I’d love to. I would, I’m keen to make it easier and quicker and simpler so yes, absolutely.
Richard Gerstein, Partner
Mishcon de Reya
Great. Kizzy, back to you.
Kizzy Augustin, Partner
Mishcon de Reya
And then back to Alex for her last question.
Alex Clough, Partner
Mishcon de Reya
Thanks Kizzy. I had one question about the Building Safety Fund so, where funding has been granted then there’s an obligation in the funding agreement that the responsible entity that receives the funding has to take all reasonable steps to recover the cost of the remedial works from those responsible through well, either through insurance claims or against those responsible through legal action against the original delivery team. So that might include claims under the original contracts or collateral warranties or third party rights or claims under the Defective Premises Act and the guidance online says that the Ministry doesn’t rule out seeking an assignment of the relevant rights where it considers it appropriate to do so to pursue those costs. So the question I had is, what steps is the Ministry taking to ensure that responsible entities are pursuing all those legal rights and how involved is the Ministry with those claims?
Chandru Dissanayeke, Director
Ministry of Housing, Communities and Local Government
Yeah look, so, I’d probably start off by saying it must be right that when the taxpayer is funding the remediation of buildings that those who are responsible don’t get away scot-free, right, so it must be right that we go after those who are responsible for the defects and it’s only those who are contracted or have the contractual relationship that can take that action against those responsible for the defects, right, so that must be right, we are saying taxpayer money is provided but you must take reasonable steps to recover that money from those responsible because they mustn’t be allowed to get away with it scot-free, right, that must be right. Equally, it must be right that if the taxpayer is funding it that at some point and the taxpayer feels that further action can be taken against those responsible, should have the ability to take that action. That also must be right. Then there is a question of at what point does the Government decide it is now the right place to act against certain entities, right, now I should say, it’s not like Government’s been standing still, right, we’ve had the Developer Contract which basically got rid of all of the court cases in relation to large amounts of the large developers and sort of said they will pay for it, right, and not only will they pay for the cladding, they will pay for all of the defects that make a building unsafe for residents to live in, right, so you’ve got that which the Ministry has, has agreed with developers and we’re holding them to account. In addition, we’ve got the Recovery Strategy Unit which has several active cases where it’s pursuing those responsible to make sure that funds are recovered and people are doing the right thing. So driving consequence into the system must also be part of the strategy alongside making sure residents are safe absolutely, immediately or as quickly as is possible. So, so, Alex, I think the answer is, we are doing it but it’s, you know, we can’t be in every single case and we do expect everyone to do their part.
Alex Clough, Partner
Mishcon de Reya
So, thanks Chandru. And that is the end of the time that we’ve got with you which is a shame because I’ve got lots more questions and I know that we’ve got questions on our chat as well so, we will pick those up with you separately, thank you to everybody who put questions in and I’m sorry that we’ve not had time to cover those but we will, we’ll raise them with you separately, Chandru if that’s okay.
Chandru Dissanayeke, Director
Ministry of Housing, Communities and Local Government
Of course.
Alex Clough, Partner
Mishcon de Reya
So thank you very much for joining us. It’s been, it’s been really interesting, I’ve really enjoyed it and I hope everybody else listening and watching has enjoyed it too. If anybody watching has any questions for our construction or our health and safety team then you can get in touch by clicking on the ‘Resources’ tab which should be at the bottom of your screen and those resources include our new Building Safety hub, our virtual popup service and our Building Safety training course. So thank you very much for watching and Chandru, thank you again very much.
Chandru Dissanayeke, Director
Ministry of Housing, Communities and Local Government
Thank you for inviting me and I feel I’ve let Richard down the most, so I’m sorry Richard.
Alex Clough, Partner
Mishcon de Reya
Don’t worry, we all feel like that. Thanks. Bye.
Chandru Dissanayeke, Director
Ministry of Housing, Communities and Local Government
Thank you.