The Week That Was - 15 July 2022

Published on 15 July 2022

Welcome to The Week That Was, a round-up of key events in the construction sector over the last seven days.

Approved Inspector's insurance requirements change

The Government has amended the Building (Approved Inspectors etc.) Regulations 2010 so that from 28 July 2022, Approved Inspectors will no longer be required to hold professional indemnity insurance under a Government-approved scheme.

Approved Inspectors will instead be allowed to purchase new levels of professional indemnity insurance cover on the open market. The levels are significantly below the Government's current minimum levels of cover, for example: £5m for personal injury claims, £1m for other claims and overall minimum cover of £15m for all claims against the Approved Inspector.

Under the current scheme, there are only four approved schemes and the Government was concerned that there was a high likelihood that insurers would be unwilling to continue to support these schemes. The requirements were therefore amended because a lack of insurance for Approved Inspectors could potentially disrupt the whole building control system. In the Impact Assessment for the amendment, the Government said the "policy objective is to remove the likelihood of a catastrophic market failure by making available to private building control firms the full insurance market".

You can view the new, amended regulations here.

New construction minister appointed

Lord Callanan was appointed as construction minister by the Prime Minister, Boris Johnson. It comes after the previous construction minister, Lee Rowley resigned and called on Johnson to resign.

Lord Callanan was previously a parliamentary secretary of state at the Department for Business, Energy and Industrial Strategy. Before that, he was minister of state at the Department for Exiting the European Union.

You can read more here.

Stay for arbitration refused and adjudicator's decision enforced

In The Metropolitan Borough Council of Sefton v Allenbuild Ltd [2022] EWHC 1443 (TCC), an adjudication award was made against the contractor of £2.2m. The employer applied to court to enforce the adjudicator's decision but the contractor applied for a stay of the proceedings to allow for arbitration, in accordance with section 9 of the Arbitration Act 1996.

His Honour Judge Hodge QC rejected the contractor's application and enforced the adjuducation decision. This was because the contractor's notice of dissatisfaction was too broad and a general objection to an adjudicator's decision was not sufficient. The contractor had also failed to comply with the contractual requirement for referring the dispute to arbitration. The Judge held that section 9(1) had not been satisfied because the Scheme for Construction Contracts (England and Wales) Regulations 1998 (SI 1998/649) applied in this case and paragraph 23 of the Scheme expressly excluded any challenge to the adjudicator's decision from the range of matters that could be referred to arbitration. Therefore "the court will always have jurisdiction to enforce an adjudicator's decision and will never grant a stay for arbitration under [section 9]".

The Judge also said that he would have reached the same decision if the adjudication had been subject to the CIC model adjudication procedure that was current at the time the contract was executed, rather than the Scheme for Construction Contracts 1998.

You can read the full judgment here.

Construction the most deadly industry in the UK

Data released by the Health and Safety Executive has revealed that the construction industry is the deadliest sector in the UK, with it being responsible for 30 out of 123 work related deaths in 2021/2022. However, this represents a reduction in fatal injuries from the previous year, when 36 deaths were recorded.

The most common causes of death were falling from a height, being struck by a moving vehicle and being struck by a moving or falling object.

HSE chief executive Sarah Albon said: “While Great Britain is one of the safest countries in the world to work, [the] figures show we must continue to ensure safety remains a priority."

You can read more here or here.

Construction output in Great Britain reaches record high

Recent statistics from the Office of National Statistics show that construction output increased to £15,053m in May 2022 – a 1.5% rise in volume terms. This is the highest monthly output since records began in January 2010. The increase comes despite continuing fears of an economic crisis and political unrest both at home and abroad.

The increase came primarily from private commercial new work and private new housing. However, the statistics show that post-covid recovery is mixed across the sector with infrastructure at 19% above its pre-covid levels but private commercial work is still 21.2% below their February 2020 level.

In the three months leading up to May 2022, overall construction output increased by 3% which is the seventh consecutive growth in the three months on three month series and is the largest growth since June 2021.