Legal development

Construction Sector Focus in 2022 Safety and Sustainability

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    Two of the main talking points for London development in 2022 will be safety and sustainability.

    Looking at safety first, we can expect Phase two of the Grenfell Inquiry to continue to produce headlines as it presses on with its investigation into the circumstances and decisions that allowed the fire to occur with such devastating consequences. Simultaneously, we are seeing the Building Safety Bill make its way through Parliament. It has passed its third reading in the House of Commons and is now progressing through the House of Lords, with its second reading there due on 2 February.

    One of the most significant amendments that gained approval as the Bill made its way through the House of Commons was the extension to the limitation period for claims under section 1 of the Defective Premises Act 1972 to 30 years (previously the Bill proposed increasing it to 15 years). This raises the prospect of claims relating to buildings completed as far back as 1992. In practice, however, tenants and others remain more likely to push for more direct compensation from the government.

    In the meantime, Michael Gove has intimated that, unless property developers agree to contribute more to cladding repair costs, they may find their projects blocked at the planning permission stage. An inquiry, established by the Department of Levelling Up, is currently seeking evidence to examine what the funding arrangement with the industry should look like. Gove has also invited the cladding and insulation sector to work with the Department between now and early March to agree on their contribution.

    As the sector grapples with both the legal and financial implications of the new safety regime, we can also expect the decarbonisation of the built environment to remain front and centre.

    With new builds the position is more straightforward than for existing stock because developers are starting from scratch and can seek out sustainable options. Retrofitting will be the bigger challenge and we anticipate a focus on two angles:

    • Energy efficiency and reduction in dependence on fossil fuels.
    • Promotion of the circular economy principle whereby existing stock is repurposed and recycled.

    While retrofitting is expensive, it is increasingly seen as economically worthwhile. Investors, shareholders, future buyers and occupiers are demanding sustainable building stock, so the threat of devalued real estate assets is a major driver.

    The role of construction lawyers will be to help create a contractual environment that fosters an innovative and collaborative approach, for example, by providing for KPIs that set out a shared purpose in relation to net zero targets; early contractor involvement; and shared financial motivation. Such provisions go hand-in-hand with a more collaborative approach towards design and technology, which can be facilitated by using BIM as a shared tool for storing and using data to drive sustainability through the build and operational phases of the asset.

    2022 will be challenging but it also offers opportunities to improve the safety and carbon footprint of our buildings.