Extending time to make a claim

The Grenfell Tower fire has resulted in reviews and consultations that aim to increase safety in dwellings, particularly in high-rise flats. On 28 April 2022, the Building Safety Act 2022 (“BSA”) received Royal Assent; it makes significant changes to residential property development. This article focuses on changes to the period during which claims for defective dwellings can be brought, and it discusses whether contractors and sub-contractors need to amend their construction contracts. 

We first need to look at the claims to which the new legislation applies. These include a set of new claims introduced by the BSA. Under the Defective Premises Act 1972 claims could be made against contractors who provided a dwelling that was unfit for habitation, therefore only applying to those who worked on the original construction or conversion of a dwelling. This has now been expanded so that claims can be made against contractors who work on an existing dwelling and, as a result of their work, cause that dwelling to become unfit for habitation.

The limitation period for making claims has also been lengthened from the previous period of six years. Claims that accrue before the Act comes into force now have a limitation period of 30 years, which means claims dating as far back as 1992 could still be commenced. However, where the cause of action arises after this amendment comes into force, the limitation period will be 15 years. It’s important to note that it won’t be possible to revive a claim that has previously been settled, or finally determined. Of course, there will be claims that are very close to the end of their 30-year retrospective limitation period, and those claims have therefore been give a one-year period in which they can be commenced, starting from 28 June 2022, which is when the new provisions come into effect. 

The BSA also brings into effect Section 38 of The Building Act 1984. This gives private individuals the right to claim damages where they suffer harm because work on a building has not met building regulations. Such claims are not limited to residential dwellings – they apply to buildings of all types. 

The limitation period for these claims has been extended to 15 years, although this only applies to claims that arise after this provision comes into effect. Claims will be limited though: it seems that the only damage that can be claimed for is death or personal injury, which includes disease and impairment of a person’s physical or mental condition. At the moment, however, this is a little unclear and as yet untested. Time will tell whether it will be possible for claims to be made for other types of damage. 

These additional liabilities and extended limitation periods will doubtless mean more claims. For contractors and sub-contractors this has implications as they will need to consider whether their existing contracts and terms and conditions are sufficiently robust. In particular, the ability to pass on such claims may be restricted by the limitation periods in their contracts, which at present are likely to be either six or 12 years. For example, if a claim was made 14 years after completion of the project, the contractor would be unlikely to be able to pass on that claim to its sub-contractor as the limitation period would have expired.

Another possibility may be to pass on such claims using the Civil Liability (Contribution) Act 1978. This Act provides for a further two-year limitation period from the date that a party is held liable for it to commence proceedings against another party seeking a contribution. However, it is unclear if the Civil Liability Act would apply to such claims, because any party that the contribution is claimed from must have the same liability as the party making the claim.

The alternative is to include express terms in a contract that extend the limitation period to 15 years. It would also be wise to extend the period for which insurance is required under the contract to 15 years. Although that, of course, will not help with contracts that already exist.

The awful legacy of Grenfell is a reminder of the obligations of those involved in residential construction. Contractors and sub-contractors would be well advised to review their contracts to take into account these recent changes and the many others that the Building Safety Act implements.