Insurance, Liability and Indemnity issues for Assigned Certifiers Chris Wheeler - Partner Insurance, Liability and Indemnity issues for Assigned Certifiers 3 April 2019

Discussion Outline Who does the AC owe a duty to? Does anyone owe the AC a duty of care? Do they owe indemnity? When can personal liability attach to the AC? Is the AC always covered by insurance when it is issues its certificate? Can the AC rely on the Ancillary Certifiers? How is the insurance market reacting to date?

Who does the AC owe a duty to? The Public? Its Employer? The Local Authority? The Building Control Authority? The Building users? Other Project Team Members? Indemnity?

Sources of the AC Responsibility The Regulations The Appointment – beware indemnity wording The recipient of the Certificate Those who rely on the certificate-- foreseeability Expanded by Collateral Warranties?

Do the Regulations Create Liability? They create responsibility The profession and the appointment create the duty Is there strict liability? Negligence test is framed by the Regulation and Code of Conduct

Does anyone owe the AC a duty? The Builder? The Ancillary Certifiers? Design Certifier? The Employer?

When can personal liability attach to the AC? Certify personally? Acts of Negligence? AC Fraud – no question. What if ancillary certifier acted fraudulently? Does the “insured” include employees?

Is the AC always covered by insurance when it issues its certificate? No one is always covered – Who is the insured? Is the AC role covered? Vicarious Liability of Employer Within her/his professional skill set ? Policy compliance ? Is insurance sufficient? Excess and GN 1.1.1 Section 2.2.7

Can the AC rely on the Ancillary Certifiers? Not entirely Inspection regime Independent, professional judgment Shared responsibility by reference Negligence mis-statement

AC Qualifications • The regulations require it to be competent and qualified and registered in one of three professions. Professional indemnity insurance generally covers professionals for services provided in accordance with their training. It is taken out by employers generally. The AC verifies to the employer that it is competent to undertake the role and swears a declaration. If that is false then insurance may not cover the AC on the basis of insurance being a contract of utmost good faith. • The fact the assigned certifier must be an architect, a chartered engineer or a building surveyor underlines the professional nature of its services.

The Certificate of Compliance (design) • This confirms that the documentation contained in the Schedule of the Commencement Notice complies with the Building Regulations. The form provides the certifier can rely on certificates from those who have designed specialist areas of the building and is based on the certifier using reasonable skill and care. Use that documentation to drive the Ancillary Certificates that you require plus the Inspection Plan.

The Certificate of Compliance -- starting • In the case of the Assigned Certifier, the building owner makes a declaration that he is satisfied that the person assigned is competent to inspect the building or works and to co-ordinate the inspection of work clearly undertaken by others and to certify the work for compliance with requirements of the second schedule of the Building Regulations as applicable. Assigned certifier declares she can do the job by way of an Undertaking and provides the schedule of inspections. This is part of the accommodation process.

The Role of the Code of Practice The Code of Practice does provide a framework for preparing the Schedule of Inspections and in preparing the Schedule in accordance with framework, one would presumably be able to comply with the Regulations. This will effectively become the standard of reasonable skill and care. Assists in advising what ancillary certificates are needed.

The Certificate of Compliance on Completion • Part B is to be completed by the Assigned Certifier • The 2 part Certificate must be submitted to the Building Control Authority for Registration • According to the Regulations, the building may not be opened, occupied or used until the Certificate of Compliance on completion has been filed and registered by the Building Control Authority. 21 days to accept or reject. When will filing occur? Must use or occupancy be delayed?

What has the insurance industry's reaction been? • Often the Assigned Certifier can be a member of the design team and their conditions of engagement will cover the role as designer and Assigned Certifier. • The insurance industry supported the various industry bodies during the stakeholder discussions. It assisted in drafting the certificates. Griffiths & Armour has participated in conferences previously for CMG, for example. • The insurers’ view was that BC(A)R would have a positive impact on culture and behaviours and would address some of the issues that historically led to claims and would make claims easier to defend. The claims made nature of coverage reduces exposure.

How can this be positive? • The professional will now be engaged throughout the construction phase on site. No longer will opinions of compliance be signed without inspections having been carried out. • There is a stronger paper trail required as a result of BC(A)R. • The insurance industry participated in the drafting of the Certificates. The Code of Practice should ideally result in better buildings and less claims. • There are very few claims that are specifically BC(A)R related. • There are increasing requirements for Ancillary Certificates from more subcontractors and more elements. Ancillary Certifiers and Assigned Certifiers provide further assurances to the client through conditions of engagement, mandate certification or collateral warranties. Every piece of paper effectively provides some increased exposure, it is not clear whether this will go beyond their Professional Indemnity Insurance.

Questions? • What impact will BIM have ? Will digitalisation and block chain improve quality of building and inspections? Email me: chris.wheeler2@dwf.law