Ancillary certificates – new rules regarding self-certification
14 October 2014
Author: Eoin O Cofaigh FRIAI, former president, Royal Institute of the Architects of Ireland, (1998-1999)
I refer to the article by Cormac Bradley FIEI that was published on 15 September. Starting his article, Mr Bradley writes: “No précis on the consultation process would be accurate if it did not record the fact that the new regime of building control has not been greeted with universal accord. Some professionals have concerns about the new regime and the liability issues that they perceive arise from the new responsibilities that emanate from the Regulations.”
I am one of those who have been highlighting such concerns for some time. But Mr Bradley is silent on the real problem. The real problem is that the self-certification system these regulations set up does not properly protect the consumer – the house-buyer and especially the first-time house-buyer. For all their intentions, the regulations will not prevent a repeat of the residential building disasters we have all seen and paid for in recent years.
BC(A)R 2014 affects every significant building and fit-out project, not just the speculative residential sector where all the problems started. The regulations allow the building owner appoint only chartered engineers, and registered architects and surveyors, as design certifier or as assigned certifier. They thus confer de facto control over the majority of building design in Ireland on these groups. Furthermore, by requiring a competent building company to be appointed, the regulations stop the centuries old tradition of ‘self-build’ in rural areas, a tradition still flourishing elsewhere, including the UK.
In return for handing control of the process to these groups, the regulations require those professionals to sign certificates that everything designed and built complies in every detail with the building regulations. This will indeed increase the number of inspections on those few construction sites where there were few or none hitherto.
However, by placing the certifier between the house buyer and the builder by means of these Certificates, the principal thing the regulations actually do for the house buyer is set up a paper trail for them to follow in the event of building failure. They distance the local authority from the entire process. They expose FDI intellectual property to internet theft. Furthermore, they introduce two key gateways to every project: a Commencement Certificate and a Completion Certificate, which the local authority can reject as invalid, putting the opening of new projects at risk. No wonder the number of valid residential Commencement Notices has tumbled in 2014 compared with this time last year.
Pyrite Panel report recommendations
The Pyrite Panel, set up to examine the ‘pyrite problem’ and to recommend how to avoid a reoccurrence, reported to the Minister for the Environment in June 2012. While the Priory Hall and pyrite scandals differ, these scandals were the genesis for the 2014 regulations.
Most significantly for consumer protection, the regulations do not implement all relevant recommendations of the Pyrite Panel report.
Pyrite Panel Recommendation 18, a “mandatory certification system” recommends that “the system of independent inspections, carried out by the building control officers, should be strengthened to complement the mandatory certification process for buildings”. BC(A)R 2014 does not do this. There is no strengthening the system of independent inspections by building control officers to complement the mandatory certification. For Priory Hall residents, independent inspections by building control officers might have made all the difference.
No architect can enforce good building on a greedy client or on that client’s incompetent contractor. To make the assigned certifier responsible for everything creates a ‘blame trail’ but will not improve standards where good building is most needed. Aside from that, the fact that the builder/developer can appoint their very own design and assigned certifiers, makes a nonsense of the claim that this will bring independent pressure to comply. To get compliance, there must be the likelihood of statutory independent inspection backed by the building control authority. The Pyrite Panel report said so.
Recommendation 21: General Insurance issues, recommended (b) “a requirement for project-related insurance whereby cover for each specific project is available and adequate and is related to the project only”. The regulations should have been written to require evidence of project-related insurance (Latent Defects Insurance or LDI) at the time of commencing the works. Even if mandatory LDI is unnecessary on every project, it should be implemented in projects involving dwellings for sale.
By not implementing this recommendation, the regulations ensure litigation and distress for home-owners will continue to feature where buildings go wrong. Griffith and Armour, the professional indemnity insurance brokers, are recorded as saying that relying on professional indemnity insurance to rectify defects in such circumstances is not the correct solution. The problem is simple. The regulations did not implement those recommendations of the Pyrite Panel report which are the most relevant to consumer protection. So much so, that last January the RIAI Council agreed unanimously that the self-certification system the regulations embody does not adequately protect the consumer.
Mr Bradley refers to “liability concerns”. So what are those concerns? The regulations make the design and assigned certifiers personally liable in perpetuo for the entire design and construction. Signing the 2013 regulations into law, (former Environment Minister) Phil Hogan said as much. Minister Alan Kelly has confirmed it as regards the 2014 regulations. Hogan said: “The new Building Control Regulations are a major step forward and will for the first time give home-owners clarity, traceability and accountability at all stages of the building process.”
The regulations are about “traceability and accountability”, not about better building. Minister Kelly recently confirmed: “The regulations require both the design professional and the assigned certifier to sign statutory declarations (the latter in conjunction with the builder) certifying that the building/works has been designed and constructed in compliance with the requirements of the Building Regulations.”
The Minister says the certifiers are signing statutory declarations that the works have been designed and constructed in compliance with the building regulations. And for the builders, Tom Parlon of the Construction Industry Federation said last July: “There are penalties already under the new building regulations, everything must be signed off by a competent assignee, who can only be an architect, a building surveyor or an engineer, and in signing off on behalf of the builder, there are obligations there and they have to stand over those.” So the assigned certifier “signs off on behalf of the builder”.
A professional opinion is one thing. A certificate of fact is altogether more certain. At the start of the consultations to which Mr Bradley refers, the Minister ruled out any “signed opinions”. He wanted certificates of fact – and got them – because he senses certificates are certain and wants the buyer to use these as the sole means of redress. Parsed plainly, the design certificate reads: I certify … that the proposed design is in compliance with the requirements of the Second Schedule to the Building Regulations. As regards the Certificate of Compliance on Completion, signed by the Assigned Certifier, the cornerstone of the regulations, the builder certifies that he has built per the plans – not per the building regulations. The assigned certifier “certif[ies], having exercised reasonable skill, care and diligence, that the building or works is in compliance with the Second Schedule to the building regulations.”
In plain language, this is not an opinion, but a certificate. It certifies not “substantial compliance” but compliance tout court. As the Ministers intended, there are no let outs. No Code of Practice can rescue the certifier, because regulations override Codes of Practice. No system which allows the builder stay silent, while requiring somebody else to certify that it complies in every respect with the building regulations, is likely to actually make builders build better.
Which experienced engineer or architect would say every client was 100% honest? Have we never met a client who wants to stop a job to avoid paying a bill, or who relishes litigation as a high-stakes hobby, or whispered poison by a lawyer seeking work? Many slips, trips and falls, are manufactured or exploited dishonestly. Mr Bradley says we should “embrac[e] the opportunity to show our ability to comply with best practice as a means of defending ourselves against vexatious claims”. I would agree, if I believed no dishonest claim is ever settled out of court and that I would never have to pay.
The honest consumer needs better building and speedy, cost-free redress. Good building control regulations should deliver both. These regulations do not. They are a charter for the dishonest and opportunistic litigant.
Some say Professional Indemnity Insurance (PII) will protect the certifier. The underwriters are indeed offering cover – this year. And they will pay out. But what about the second claim? And the third? Insurers are commercial companies with their primary duty to their shareholders. When this problem manifests itself, they must and will walk away, as over asbestos or pyrites. The design and assigned certifiers have the personal liability for the rest of their lives. Insurers do not defend every claim, even if unfounded. An insurer’s duty to his shareholders is not necessarily in the insured’s interest. Settling a claim can cost less than fighting it.
Those who act as design or assigned certifier shall be burdened with litigation; insurers will not renew PII cover, and in a few years they will face ongoing claims, with no insurance. Mr Bradley’s “ISO system” will not suffice as a defence, because the legal test to be applied is not that of “reasonable skill and care in arriving at an opinion”. The test is: “Was what the certifier signed, true?” Finally, while the designer and/or assigned certifier is an individual person, who signs in a personal capacity, PII is taken out and controlled by a practice or company. A design or assigned certifier who changes employment, leaves employment or even has no say over continuation of a PII policy will be exposed with no insurance cover.
What do the lawyers say?
The concerns of those of us who oppose the regulations in the interests of the public and the professional alike are not based on hearsay but on the views of some of Ireland’s most experienced construction lawyers. Writing on the liability attaching to Design Certifiers under these regulations, Mr Denis McDonald SC wrote last March: “It is the certifier who is taking the responsibility of certifying compliance with the requirements of the Second Schedule to the Building Regulations. In addition, it would appear that the certifier is undertaking to certify compliance with the “plans, calculations, specifications, ancillary certificates and particulars listed in the Schedule …”. This is a significant responsibility and there does not appear to be any provision made for the fact that the certifier may have had no input into all of the plans, calculations, specifications and ancillary certificates and particulars referred to.
And, in relation to the assigned certifier and the certificate of completion, he wrote: “While it is certainly helpful that the final paragraph allows the certifier to rely upon the ancillary certificates scheduled, it is important to bear in mind that, as I read the penultimate paragraph, it contains a confirmation on the part of the certifier that the ‘others’ have each exercised reasonable skill, care and diligence in certifying their work as set out in the ancillary certificates. I therefore cannot read the certificate as a whole as permitting the certifier to simply rely on ancillary certificates without investigation. It seems to me that the certifier is undertaking a liability in respect of ancillary certificates in that the certifier is confirming that those certificates have been provided by persons who have exercised skill, care and diligence in certifying their own work.”
Mr Bradley refers to “concerns about liability issues”. He omits to mention that our concerns are founded on the considered views of Senior Counsel experienced in construction law and practice.
Readers, especially those not involved in construction, can be forgiven for confusing the various ‘certifier roles’ arising under these regulations. There are three. The two principal ones, ‘design certifier” and ‘assigned certifier’, are obligatory. The third is optional and less important in the system. An ‘ancillary certifier’ may certify elements of work, such as structural design; but they, and their certification, are not defined under Law.
These regulations apply to buildings. The DoECLG intended that the lead consultant, who for building projects is usually the architect, take the statutory design and assigned certifier roles. They also intended other project designers (such as consulting engineers) to act as ancillary certifiers. But does not the ancillary certifier have a responsibility?
The answer is: not a lot. The ‘ancillary certifier’ role is of little legal importance. This can be seen by examining the advice of the Law Society Conveyancing Committee. Solicitors conveying property need not bother collecting ‘ancillary certificates’. They only need the Certificate of Compliance on Completion with the assigned certifier’s name. The target of subsequent litigation is to be the assigned certifier in person, while the ancillary certifier’s firm, whose name will not be recorded by the lawyers, will not appear in the proceedings.
Is there is another way?
Ireland needs effective building control. The RIAI has repeatedly called for an independent system of inspection of both design and construction under the control of the Building Control Authorities. The regulations do not provide this. Independent inspection or audit has been found necessary in many other sectors:- financial regulation, accountancy, hospitals, the Garda, agriculture and food safety. The idea that construction, alone, is uniquely trustworthy is astonishing.
Building control authorities must have real involvement, with adequate resources and powers to oversee and enforce an effective system of inspection of design and construction. In addition to enforcement, they should be enabled to promote better building practices through systems of feedback, notifications and education. An effective system will actively support good design and construction by small but positive interventions, while retaining the power to enforce proper standards by escalating procedures.
Similar to company auditors, the independent inspector can be appointed by the building owner/developer prior to commencement of construction. Independent inspectors would be suitably qualified experienced persons – architects, engineers, technologists: answerable to the Building Control Authority (BCA) as well as to the building owner.
The inspector would inspect design and construction for compliance with the building regulations in accordance with a code of practice, and confirm to the BCA that inspections have been made and no non-compliant design or construction observed. The design team remain in full control. Having an experienced independent inspector, selected and paid by the client, audit the design would raise standards and, in a time-effective manner, assist the client’s building professionals achieve compliant designs.
The certainty that an experienced independent inspector would inspect the construction site periodically, for the sole purpose of auditing compliance with building regulations, would act to raise construction standards. The inspectors would issue reports to the BCA to accompany a commencement notice and also prior to occupation of the building. They would report all un-rectified cases of non-compliance, for the BCA to issue enforcement notices (an “escalating degree of intervention”, which experts identify as an appropriate way to ensure regulatory compliance in complex situations.) They would carry professional indemnity insurance to cover the services provided.
The BCA would also inspect designs and construction, based on their risk analysis of relevant projects. (This would keep inspectors ‘up to the mark’!) As well as enforcement, the BCA would oversee a system of defects prevention based on feedback from the inspectors. (This would catch defects earlier.) The BCA would charge a fee at commencement notice stage to cover the cost of the system. The system could be self-funded.
A system of independent inspection of designs and construction sites, paid for by the client but licensed by and answerable to the BCA, has worked for years in England and Wales. Such a system will:
- Deliver a higher standard of building;
- Better protect the consumer;
- Apportion liability equitably among all of the participants;
- Allow architectural technologists work as they have done in the past;
- Allow “self-builders” to continue with their projects;
- Reduce cost and speed up the construction process;
- Protect the State from primary liability and additional cost.
It could also make different requirements around projects which under the present regulations are treated identically, from the fit-out of a small unit in a shopping centre, to a major new hospital.
A process to achieve change
Such a system needs input from many stakeholders. This includes representative bodies of those who acquire or use buildings, including purchasers and tenants of residential buildings, commercial and industrial clients, state agencies such as IDA and Enterprise Ireland, and government departments with significant building programmes. It includes government agencies such as the Competition Authority, National Consumer Agency and Competitiveness Council. It includes materials suppliers, standards organisations, construction technicians, self-builders, fire officers and building control officers. The Minister’s own Building Regulations Advisory Body, which hasn’t been convened for several years, should be consulted in detail. None of these were involved in the “stakeholder discussions” before the 2014 regulations.
Mr Bradley starts his article by acknowledging concerns among his fellow professionals. He ends by exhorting us to “embrac[e] the opportunity to show our ability to comply with best practice as a means of defending ourselves against vexatious claims”. He says we should do this, because of the “comprehensive consultation process undertaken before the regulations passed into law”. To quote John Maynard Keynes: “When my information changes, I alter my conclusions. What do you do, sir?”
The restricted consultation process which gave us these regulations has led to the wrong result: better paperwork, not better consumer protection. The people of Ireland – house-buyer and taxpayer alike – deserve proper building control. The sooner, the better.
Eoin O Cofaigh FRIAI
• President, Royal Institute of the Architects of Ireland, 1998-1999
• President, Architects’ Council of Europe, 2000
• Honorary Member: American Institute of Architects; Bund Deutscher Architekten; Bund Deutscher Baumeister; Union of Architects of Russia
• Member, Building Regulations Advisory Body, 1991-1997
• Architect in private practice and company director, McHugh O Cofaigh architects, Dublin; 1985 to date
• Author of section ‘Building Control’ in Construction Projects: Law and Practice, Thomson Round Hall, 2007 to date