Building control and duty of care: Murphy v Brentwood revisited

Introduction

Local authorities have a statutory duty to ensure all building regulations (in particular, the Building Regulations 2010) are complied with; building control is shorthand for this enforcement role as well as a physical department of local authorities. This article considers circumstances in which building control can be held legally accountable for signing off on defective plans. This question is raised in the context of the construction professionals who may suffer a significant loss given the recent surge in claims involving cladding, following the tragic events at Grenfell Tower in June 2017.

All significant new building work requires building control oversight, unless the work is very limited, or can be covered by a competent person scheme. Such oversight has come under intense scrutiny following the events at Grenfell Tower, and is part of the independent review of building regulations and fire safety which is currently underway by Dame Judith Hackitt. Dame Judith’s final report is expected imminently. Our overview of the interim report published in December 2017 (the Interim Hackitt Report) can be found here.

Since 1985, parts of building control have been privatised. Those undertaking building work can choose between (1) a local authority; or (2) a private sector approved inspector (Approved Inspector) to oversee the works from a building control perspective.

Regardless of whether the building control function has been carried out by a local authority or an Approved Inspector, the Interim Hackitt Report has highlighted a general industry need to raise levels of competence amongst those engaged in the inspection of high-rise residential and complex buildings. The Interim Hackitt Report has recommended that a new system of accreditation is introduced in order to ensure that building control inspectors inspecting complex and high-risk buildings are suitably qualified to do so1. We await her final review to see the final recommendations she makes.

Duty of care: the general position

A duty of care is owed when there is reasonable foreseeability of loss, sufficient proximity of relationship, and where it would be fair, just and reasonable to impose a duty2. See our article here on establishing a duty of care in negligence. When considering whether it is fair, just and reasonable to impose a duty of care on public authorities, the courts take a restrictive approach.

It is generally the position that building control cannot be held responsible for signing off on defective plans. Reasons for this include:

• the absence of a contractual relationship between the party which has suffered loss and building control (in circumstances where the local authority is carrying out the building control function)
• there are no statutory provisions imposing liability on building control, and
• the decision in Murphy v Brentwood District Council [1991] UKHL 2.

These reasons are considered in more detail below.

Absence of a contractual relationship

When a local authority carries out building control oversight, they do not have a contractual relationship with the construction professionals carrying out the work on the buildings. The consequence of this is that there would be no contractual claim available to a construction professional in the event that they have suffered a loss.

The situation is somewhat different when it comes to Approved Inspectors. An Approved Inspector is a person who, under section 49(1)(b) of the Building Act 1984 and in accordance with Regulation 5 of the Building (Approved Inspectors etc) Regulations 2010 (B(AI)R 2010), is approved by the Construction Industry Council (CIC). Their principle functions and duties include:

• supervision to reasonably enable it to be satisfied within the limits of professional skill and care that the applicable regulations in the Building Regulations 2010 are complied with (especially Regulations 4 and 7 of the Building Regulations 2010 with regard to requirements relating to building work, and materials and workmanship).
• ontinued, active consultation with the fire and rescue authority and having due regard for their views (in line with Regulation 12 B(AI)R 2010 and Part B4 of Schedule 1 to the Building Regulations 2010), and
• observe minimum compulsory standards of reasonable skill and care as set out in the CIC’s Code of Conduct and the Department for Communities & Local Government’s Building Control Performance Standards.

The key difference between building control and an Approved Inspector is the fact that an Approved Inspector is engaged by virtue of a professional appointment.

Lack of statutory provisions imposing liability

The building regulations impose responsibilities on those carrying out the work on the building. The role of building control is to take all reasonable steps to ensure that those carrying out the works have met the requisite performance based requirements. Indeed, the Interim Hackitt Report has stressed that the responsibility for complying with these statutory provisions falls to those carrying out the works, rather than building control3.

It should be noted that the Interim Hackitt Report has criticised the building regulations for failing to specify who, amongst those carrying out the works, accountability should fall to. Dame Judith has indicated that the building regulations should set out clear roles and responsibilities with regards to building control compliance4. Therefore, it would appear that any statutory reform would likely impose further liabilities on construction professionals carrying out the works, rather than impose statutory liability on building control.

Murphy v Brentwood [1991] UKHL 2

In Murphy v Brentwood the claimant purchased a property which transpired to be built on defective foundations. The claimant sought damages from Brentwood District Council’s building control function in respect of diminution of property value, alleging that building control had negligently signed off on the foundation plans. It was held that building control was not liable for the cost of remedying the defects. This was decided on the basis that for policy reasons, the common law duty to take reasonable care does not apply to building control in circumstances where no physical injury had been suffered and the loss is purely economic.

Therefore, according to Murphy v Brentwood, in most circumstances there is no legal recourse in respect of pure economic loss against building control which has approved defective plans.

However, the inherent flexibility of the common law means that the position is not settled. Depending on the facts, a successful claim against a public body for pure economic loss cannot be discounted.

Recent decisions such as Schubert Murphy v The Law Society indicate the Courts’ reluctance to categorically confirm that in no circumstances will a public body owe a duty of care in circumstances of pure economic loss. Schubert Murphy related to a negligence claim against the Law Society in respect of their “Find a Solicitor” database. The Court acknowledged (in the context of a strike out application) that as a regulator and a public body, the Law Society would not generally owe a duty of care when performing its regulatory functions. However, it was held that the provision of information via the “Find a Solicitor” database established a sufficiently proximate relationship between the public body and the claimant.

Whilst Schubert Murphy confirmed the claimant’s standing to pursue a claim against a public body, it should be noted that this case has not yet progressed beyond the rejection of a strike-out application and may well have been settled. Our blog post considering the Schubert Murphy decision can be found here.

Detailed analysis of building control’s actions would therefore be required to determine whether a duty of care could be owed to construction professionals. It could be argued that providing specific sign-off in respect of cladding could establish a duty of care, although this would very much depend on the facts.

The position regarding physical loss

In Murphy v Brentwood, the claim was rejected on the basis that no physical harm had been suffered by the claimants. The decision made it clear that it expressed no opinion as to whether a claim in respect of physical loss would be successful. However, it could logically follow that there may be an actionable claim against building control for physical damage suffered as a result of building control signing off defective plans.

However, whilst the type of loss sustained is important in deciding whether a duty is owed by building control, it does not appear that any such claim for physical loss has been pursued in a building control context. This point therefore remains largely untested.

Article 8 ECHR

Pursuant to the Human Rights Act 1998, it is unlawful for public authorities to act in a way that is incompatible with the ECHR. In Gresty v Knowsley MBC it was acknowledged that in some circumstances a positive obligation can be imposed on an organ of the state (ie building control) to remedy defects in a house occupied as a family home by reason of Article 8 ECHR. However, in practice a cause of action would only arise in extreme circumstances. The claim in Gresty was rejected because the property defects did not sufficiently impact on family life to impose a positive obligation on building control. It was noted that the more serious the consequences of building control’s actions, and the stronger the link between their alleged actions and the claimants’ circumstances, the more likely a positive obligation would arise.

In the context of construction professionals, it is difficult to see what a third party construction professional who has suffered loss may take from Gresty. However, it could be a potential route to redress for individuals such as residents.

Conclusion

Whilst recent case law indicates the Courts’ reluctance to confirm that a claim for pure economic loss can never be pursued against building control, Murphy v Brentwood remains applicable and any such claim would face significant hurdles.

However, given the surge in cladding related claims, and the unprecedented nature of the loss suffered post-Grenfell, it is possible that matters may change. It may be that a test case is required to clarify whether the common law would permit a claim for pure economic loss against building control.

As noted above, one of the barriers to a claim against a public body is the lack of statutory provisions, and the tone of the Hackitt review indicates that any statutory reform will not likely be focussed on altering this position. That said, given the current scrutiny building control is under, statutory provisions could be revised to impose additional liabilities on building control.

1 Building a Safer Future - Independent Review of Building Regulations and Fire Safety: Interim Report page 25

2 Caparo Industries v Dickman [1990] 1 All ER 568

3 Building a Safer Future - Independent Review of Building Regulations and Fire Safety: Interim Report page 44

4 Building a Safer Future - Independent Review of Building Regulations and Fire Safety: Interim Report page 53