ABCA's new appointment for Registered Building Control Approvers

Changes following the Building Safety Act 2022

Prior to the Building Safety Act 2022, those undertaking a construction project had the choice of either engaging the local authority or an approved inspector to certify whether the works undertaken complied with building regulations. In either case the discipline usually sought was that of a building surveyor.

Following the coming into force of the Building Safety Act 2022, and the creation of the new Building Safety Regulator (a division within the Health & Safety Executive) (Regulator), the role of certification has been split. Under the new regulations[1] the Regulator takes direct responsibility for higher-risk buildings, with non-higher-risk building certification only being restricted to someone who the Regulator has recognised as being a Registered Building Control Approver (Approver). 

Due to the Regulator not having the resources on its creation to perform its function by itself (and it remains to be seen if it ever will), a system was set up for those construction projects already substantially underway prior to 6 April 2024. The transitional provisions allowed those who had previously been appointed as approved inspectors under the old regime to contact the Regulator and register to become an Approver. Overall, this has preserved some of the previous arrangements where developers could engage surveyors under private contracts to perform a role that otherwise would fall to the regulatory authority.[2]

Unsurprisingly given the plethora of regulations, definitions etc., introduced under the Building Safety Act 2022, the construction industry is still coming to grips with how to best set up and run their projects. Earlier this year the Regulator announced that at least 50 ‘higher risk’ schemes would need to pause works due to issues with the status of the building control surveyors who had been privately appointed as approved inspectors.[3] Clearly, navigating the new requirements of the building control regime for both higher-risk buildings and non-higher-risk buildings is an important aspect for project stakeholders, requiring careful consideration to keep a project on course.

One of the immediate practical consequences of the change from "Approved Inspectors" to "Registered Building Control Approvers" is that the standard forms of appointment that were previously being used were all in need of an update.

New ABCA Contracts for the Appointment of a Building Control Approver

In response, the Association of Building Control Approvers (ABCA) (formerly the Association of Building Approved Inspections (ACAI) has issued new forms of appointment for use by their members for works that are not High-Risk Buildings. These contracts include:[4]

1. the “ABCA Contract for the Appointment of a Building Control Approver First Edition” (ABCA Appointment); and
2. the “ABCA Short Form Contract for the Appointment of a Building Control Approver First Edition” whish is intended for projects under £500,000.

These documents are intended to replace the Construction Industry Council’s (CIC) forms that previously were among the most popular industry-standard contracts for Approved Inspectors. These new documents are indicative of the potential future direction for such appointments, and we consider the key changes below.

CIC vs ABCA – What has remained and what has changed?

1. New structure and definitions

The ABCA update includes a tabularised “Contract Details” page to make it easier to capture project specific data. The “Definitions” section has also been moved to the front of the document and reworked to make it clearer to the reader (who previously might not have made it to the end of the contract).

As to the definitions and language of the Contract, unsurprisingly all non-obsolete CIC definitions remain and those that do not align with the new legislation and regulations have been removed i.e., “Approved Inspector”. As for new definitions, these reflect the new legislation and duties imposed by the Building Safety Act 2022. ABCA has also (and in our view smartly) modernised their appointment by capturing other changes in law (i.e. concerning delay events), generic “Force Majeure” events (such as epidemics) and “Relevant Event”, which emulates the JCT approach.

2. Conditions

The duty of care owed by the Approver remains that of “reasonable skill, care and diligence” but now expressly excludes fitness for purpose. This amendment follows market trends and the stance of insurers following the Supreme Court’s judgment in MT Hojgaard A/S v E.On Climate & Renewables UK Robin Rigg East Ltd and another.[5] 

The original CIC position is otherwise adopted save for the new provisions dealing with the requirements of “dutyholders” under the Building Safety Act 2022.

Some things have stayed the same, such as the employer still having to give the Approver seven days’ notice of commencement of the works and keeping the Approver regularly informed of the progress of the project. However, there are new time sensitive obligations on the employer such as providing the Approver with all necessary information (including site and block plans) to enable the initial notice to be submitted no later than five working days before works commence on site, as required under The Building (Higher-Risk Buildings Procedures) Regulations 2023.

If the employer fails with their obligations, the Approver can be entitled to additional payment. Additionally, non-compliance risks refusal to grant a completion certificate for the works, which is likely to be a prerequisite for practical completion, insurance cover, occupation and/or sale of the property. Clients should ensure they are clear on what they need to provide and that they are adequately resourced to be able to do so.

3. Rights of third parties

The ABCA appointment contains no provisions for collateral warranties or third-party rights to purchasers, tenants, funders (or any other third parties). This reflects the position under the previous CIC Appointment and there are no signs of this changing much in the future.

There will be exceptions where Approvers allow clients to grant warranties and third-party rights. For those situations, further amendments would be needed.

As per the previous CIC Appointment, the ABCA appointment still does not permit assignment by either party.

4. Compliance with Building Regulations

The ABCA appointment specifies that the Approver is not responsible for ensuring that Building Regulations have been complied with and is not obliged to advise as to how this can be achieved (the employer presumably having engaged a design team for this). The Approver also takes no liability for losses that might arise because confirmation of compliance has been withheld.

Instead, the Approver only agrees to take such steps as are reasonable to be able to confirm that the project complies with the Building Regulations.

5. Termination

The employer’s rights to termination remain unchanged from the CIC form. The grounds for client termination are limited in that they only cover the following two scenarios:

1. Approver is in material breach (and has failed to rectify the breach within 28 days of a notice of the breach); and
2. Approver becomes Insolvent.

On the other hand, the Approver has enhanced rights to terminate under the new ABCA form, again reflecting the change in legislation. In addition to the rights it held under the CIC form, the Approver can now terminate where:

1. there is a “Force Majeure” or “Relevant Event”;
2. there is a conflict between its obligations under the appointment and its statutory obligations under the Building Act 1984 or the Building Safety Act 2022;
3. The Regulator suspends, terminates, or places restrictions on the Approver preventing it from providing the services; and
4. The project constitutes or involves work to a High-Risk Building.

6. Limitation Period, Limits of Liability, and Exclusions

The form retains an overall aggregate financial cap on the Approver’s liability. Whilst CIC permitted the parties to specify the limit of liability, the ABCA’s form gives just two options, “the greater of (i) £250,000 or (ii) ten times the fee, in the aggregate”. These caps are further lowered in regard to fire safety claims, which are limited to the amount, if any, recoverable from the Approver’s professional indemnity insurance at the time the fire safety claim is notified.

Another new addition to the ABCA appointment is the exclusion of liability for claims relating to “war, civil disorder, terrorism, mould, spores, asbestos, pollution and/or contamination and any fitness for purposes requirement in relation to the Project”. This new insert reflects the new adoption across the industry following the Supreme Court’s judgment in MT Hojgaard and subsequent exclusions under many insurance policies.

Other areas to flag within the ABCA appointment such as the net contribution clause, are carried over from the CIC appointment as is the exclusion of liability for any direct or indirect loss of profit, loss of business, or other indirect or consequential losses arising from a breach of contract.

As for the limitation period, this has remained unchanged at 6 years from the earlier of the date of completion of services or termination.

Key takeaways and conclusion

Overall, the new ABCA contracts carries forward many of the principles from the CIC drafting that was designed to limit the Approver’s liability. This is driven in part by an increasingly hardened insurance market, which arguably is the inevitable consequence of the many claims arising from defective or dangerous building practices.

It is unlikely that there will be much commercial scope to negotiate such appointments going forward, although the full impact of the new regime is to be seen. What is important is that parties are clear on their respective obligations under the new regime, how they are ensuring they comply with these, and can demonstrate to a Regulator they are complying. Contractual evidence showing competent parties have been correctly engaged is likely to be one element that the Regulator looks for when determining whether a developer has complied with their regulatory obligations.

If you are currently in the process of negotiating and/or considering using this appointment, please do get in touch with a member of our team. Additionally, we can provide training on any of the above points about the Building Safety Act and the new regulations.