Since the fire, and the subsequent publication of the Inquiry's Phase 1 Report, the legal and regulatory landscape around fire safety for 'higher-risk' residential buildings has undergone significant change. This has been achieved by updates to the Building Regulations, the Building Safety Act 2022 and the creation of a new Building Safety Regulator. The Phase 2 report goes further and makes a number of additional wide-ranging recommendations for change, both in respect of fire safety and wider aspects of building safety. We explore a selection of those recommendations which will be of particular interest to Construction Professionals and their Professional Indemnity insurers.

Regulation

The Inquiry found that the regulatory arrangements applicable to the construction industry had become fragmented with responsibility for different aspects resting with various Government departments, local authorities, commercial organisations and Trading Standards. This was inefficient and an obstacle to effective control.

The Inquiry therefore recommends that the Government draw together under a single regulator all of the functions relating to the construction industry to include:

1. the regulation of construction products;
2. the development of suitable methods for testing the reaction to fire of materials and products intended for use in construction;
3. the testing and certification of such products;
4. the issue of certificates of compliance of construction products with the requirements of legislation, statutory guidance and industry standards;
5. the regulation and oversight of building control;
6. the licensing of contractors to work on higher-risk buildings;
7. monitoring the operation of the Building Regulations and the statutory guidance and advising the Secretary of State on the need for change;
8. carrying out research on matters affecting fire safety in the built environment;
9. collecting information, both in this country and abroad, on matters affecting fire safety;
10. exchanging information with the fire and rescue services on matters affecting fire safety;

These recommendations go beyond the Building Safety Regulator established under the BSA 2022, which was set up primarily to regulate so called "higher-risk buildings". 

We anticipate that the eventual creation of a single regulator would be a positive change in the industry. It should assist all working in the construction sphere to fully understand and comply with their duties and responsibilities. However, the process of bringing that regulator into existence, and the transition of the various roles and responsibilities to a single focal point, will likely be a complex and lengthy process. During that transition, those involved in the construction industry will need to keep abreast of developments and avoid the pitfalls of changing requirements. The new licensing regime also has the potential to create difficulties and risks, particularly for contractors (see further below).

Higher-risk buildings

The changes enacted to date by the BSA have been linked to "higher-risk buildings" as defined in the BSA 2022. Currently, higher-risk buildings are defined by reference to their height (at least 18 metres or seven storeys and containing at least two residential units). The Inquiry now recommends that this definition is reviewed urgently to reflect "the nature of [a building's] use and, in particular, the likely presence of vulnerable people, for whom evacuation in the event of a fire or other emergency would be likely to present difficulty". The Inquiry also goes on to recommend that fire safety strategies take account of the needs of vulnerable people are prepared and updated at various stages of the BSA Gateway Regime.

Depending upon whether and how this change is implemented, we can see it causing some uncertainty and may mean that (significantly) more buildings are brought under the more stringent regulatory requirements applicable to higher-risk buildings. Whilst, as the Inquiry notes, the current requirements relating to height are 'arbitrary', at least they are clear. A move to a focus on the future occupancy and use of a building by 'vulnerable people' could potentially apply to almost all residential buildings, especially within the social housing sector. Construction professionals may therefore be faced with difficult choices about the categorisation of a building as 'higher risk' or not, and their decisions in this regard coming under future scrutiny.

Legislation and guidance

The Inquiry found that the current statutory guidance to the Building Regulations, in particular Approved Document B, does not provide the information needed to design buildings that are safe in the event of a fire. It therefore recommends that the statutory guidance generally, and Approved Document B in particular, is urgently reviewed and revised taking into account the expert evidence of Professor Bisby, Professor Torero and Dr Lane who provided evidence and guidance to the Inquiry.

It is beyond the scope of this article to discuss the technical aspects of the Building Regulations and associated statutory guidance. However, this recommendation is a further reminder to the industry that knowledge around fire safety (and building safety generally) is not static and, to quote the report, represents "an evolving science". Professionals will therefore need to be aware of the key technical findings of the Inquiry and its experts as well as monitoring ongoing developments in this area.

Construction professionals

The Inquiry makes a number of recommendations that are applicable to specific professions, in particular:

Fire engineers

The Inquiry found that "not all those who profess to be fire engineers are capable of performing that role competently and that the complexity of the subject matter is not well understood." This leads them to recommend that the role of Fire Engineer become a recognised and legally protected profession subject to the regulation of an independent body. 

From an insurance perspective, the introduction of an independent regulatory body is likely to lead to requirements for "minimum" insurance terms in the same way as other regulated professions. Those minimum requirements will need to be developed by the regulator and agreed with the insurance market. Further, as recognised by the Inquiry's recommendation that the Government take steps to ensure the availability of more "high-quality masters level courses in fire engineering", the ongoing shortage of fire engineering expertise is unlikely to end anytime soon. This will have a continuing impact on projects and, indeed, fire safety disputes.

Architects

Due to the importance of the architect's role in achieving the overall safety of a building, the Inquiry recommends that the ARB and RIBA should review the steps taken since the Grenfell Tower fire to improve the education and training of architects to ensure they are sufficient in the light of the Inquiry's findings. Recommended is the introduction of a statutory requirement that an application for building control approval for a higher-risk building is supported by a statement from a senior manager of the principal designer that "all reasonable steps have been taken to ensure that on completion the building as designed will be as safe as is required by the Building Regulations"

The Inquiry's approach reinforces the key role of the architect/lead designer in ensuring the safety of higher-risk buildings. This needs to be reflected in the ongoing education of individual architects and a greater level of personal responsibility is placed on the senior management of these organisations. As such, firms of architects will continue to shoulder a significant burden of responsibility, and therefore risk, in future construction projects. Although the 'devil will be in the detail' the requirement for statements from senior individuals potentially leaves open the possibility for personal civil or criminal liability and will focus attention (of both Insureds and Insurers) on the relevant cover provided under PI policies. In the event that applicable standards are not achieved, architects (and their professional indemnity insurers) could be exposed to significant claims and/or regulatory action.

Contractors

With the Design and Build form of contract now representing one of (if not the) primary procurement vehicle, the Inquiry has focussed closely on the role of D&B Contractors in ensuring the safety of buildings. With this in mind, the Inquiry recommends the introduction of a licensing scheme for principal contractors wishing to undertake the construction or refurbishment of higher-risk buildings to ensure the requisite level of skills and expertise. That scheme would be overseen by the new construction regulator.

Further, it recommends that it be a legal requirement that any application for building control approval for the construction or refurbishment of a higher-risk building be supported by a personal undertaking from a director or senior manager of the principal contractor to take all reasonable care to ensure that on completion and handover the building is as safe, as is required by the Building Regulations.

If implemented, the introduction of the licensing scheme would be a significant change in the industry and may require contractors to 'up skill' their teams in order to achieve registration. As with architects, the recommendations, if implemented, could result in personal liability of senior individuals increasing the focus on scope of insurance cover available. 

The changes may also make it more difficult, in the event of a claim, for contractors to shift primary responsibility for safety defects onto their sub-contractors / sub-consultants. That said, contractors will need to ensure that robust contractual arrangements are put in place which properly identify and demarcate responsibilities to ensure compliance and so that recovery / contribution claims are preserved in the event of a claim arising. Insurers will want to include relevant policy terms which require policyholders to do so.

Conclusion

It remains to be seen which of the Inquiry's recommendations are eventually implemented and to what timetable. However, it is manifestly clear that there will be ongoing and increased scrutiny of fire and other safety aspects. Implementation will form part of a changing legal and regulatory landscape which the construction sector and its insurers must contend with.

Construction professionals will need to follow any changes closely to ensure compliance. Similarly, Insurers will need to monitor the situation carefully and consider potential revisions of proposal form questions and Professional Indemnity insurance wordings to respond to the changing risk landscape.