At the end of March, I represented FIS at the Building Safety First event. It was a real honour for me and a great accolade for the work of FIS that we were invited to speak with Dame Judith Hackitt, Lord Greenhalgh and leading experts from within and outside the sector at this landmark event.
A key positive I took away was that the gateways and focus on competency and collaboration within the imminent Building Safety Bill is going to challenge, in a good way, the mechanisms by which we manage construction. It is also encouraging to see initiatives like the Code for Construction Products Information (CCPI) and the Building a Safer Future Charter (BSFC) starting to gather momentum and helping us to reframe best practice, bringing consistency to the way we present information and work together on projects (and collaborate outside of projects). It was also helpful to draw inspiration and hope from other major hazard industries who have taken great strides.
I remain optimistic, but I am not naïve enough to think it is all downhill from here, in fact, I believe we still have the Alps to cross. In a break, I took a call from a member who entered administration.
The story wasn’t a new one, it involved project delays, an air bubble in cash flow, protracted periods disputing valuation of variation (some linked to COVID delays) and, I suspect, some blatant opportunism (an administrator is likely to be a softer touch in a final reconciliation).
Understanding of risk
I returned from the break to hear the head of legal counsel at a major contractor articulate how the supply chain is becoming more “contractually sophisticated” and hence “more adversarial”. If we interrogate that point, I believe she was saying that the supply chain better understands the unreasonable risk transfer that is endemic in the amendments we see in virtually all standard contracts and is rightly pushing back. This should be applauded, because I fear, right now the understanding of risk is outstripping the effective management of it. As the consequence, we are seeing more design risk weaved into these faux standard contracts (or we are spotting it for what it is if it was there already). Whilst the mechanisms for better are evolving, buildings are still being designed that are impossible to build within the scope of existing test evidence and businesses knowingly attempting to transfer the risk of this through unreasonable clauses in contracts This isn’t new and I know of several members who are involved in legacy projects and being called back on details that, whilst discussed at the time, have been retrospectively reviewed and questioned.
The fact that they could do nothing else at that stage, they discussed it with the site manager at the time etc are secondary to the bit of paper that was signed. The retrospective elements of the Building Safety Bill (supercharged in the proposed amendments working through Parliament at the time of writing) is undoubtedly going to accelerate this. A 30-year legacy on key safety elements is going to encourage people to cast the net wider and, I fear, a burgeoning and opportunistic ‘no win, no fee’ industry will emerge. I have real concerns that the scale of this is going to throw the sector once more into survival mode, and the very worst adversarial behaviours are going to undermine the spirit of collaboration that we have seen glimmers of in recent years.
Accountability is critical
At the heart of the legacy aspects of the Bill is the producer pays principle. This is a simple political statement, but a more complex moral and legal argument.
Of course, we have to be accountable for our past deeds and leaseholders should absolutely be protected, but the Bill is shifting it so it is easier to allocate blame to individuals and failing to recognise that the system often failed them. It also, whilst allowing more provision for blame, is light on mechanisms to manage the myriad of contractual disputes that could emerge.
Accountability is critical, but we need to be cautious about creating a litigious blame culture. I have been involved in a number of construction disputes and they are typically multi-faceted, often complicated by shared responsibility and always worse if there is not a clear paper trail. And, whilst the Bill extends the legacy liability for construction, this is not matched with a similar responsibility for those that were part of our risk management equation, such as insurers.
There are many reasons to be optimistic about the future, but in the wake of inflation, battling back after COVID (and the ongoing disruption it is causing) and the weight of the Bill washing over us of the expression; ‘it’s always darkest before the dawn’ comes to mind.