Bruce Shaw urge caution on additional costs for BC(A)R SI.9 roles & liability

Derry Scully for website

Derry Scully – Bruce Shaw

  • In an interview in “ Irish Building Magazine” on 26 July 2015 Bruce Shaw’s Derry Scully – An Industry in Recovery, Derry Scully of Bruce Shaw Quantity Surveyors and Construction Consultants pointed to an industry coming to terms with mistakes made in the past and the challenges currently facing it. He urges caution when it comes to onerous liability and roles under Building Control (Amendment) Regulation SI.9 and notes costs will increase across the board as a result. Quote: 

The increased responsibility and change in risk-profile for owners, builders and design professionals under the [SI.9] regulations will most likely increase the cost of completing projects in both the public and private sectors. Increased costs will be in relation to insurance cover, additional design team fees in complying with the legislation, on-site programme implications and administration costs. Provisions will need to be built into contracts to ensure builders comply with requirements under the regulations, including co-operation with the Assigned Certifier and provision of acceptable Ancillary Certificates. The certification process imposes challenging responsibilities on and additional liabilities for all parties involved in the process. It will certainly take time to settle and may involve modifications to the regulations over the coming years.

Extract:

“Output is up; it rose to €11 billion in 2014 which is 7.1% of GNP. For 2015, we’re predicting approximately €12.5 billion. Obviously output is rising from an extremely low base and we’re still well below the sustainable level expected for a developed economy…

Residential construction is a major component of the overall industry. The number of residential units built per year peaked in 2006 at over 90,000 units but this dropped to just over 8,000 units in 2013 and approximately 10,000 in 2014, well below the required volume of 26,000 units per year for 2015-2018 predicted by the ESRI…

In 2007/2008, employment in the construction industry peaked at just under 260,000 and in 2012, it suffered a massive drop. “That’s rising again but very slowly; in the third quarter of 2014, numbers were only at 115,000. We expect this to rise in 2015 but we’ll still be massively down from peak figures which were unsustainable in terms of the volume of work and percentage of GNP.” The difficulty, says Derry, is that the industry has lost several key trades and skills…

The public sector capital expenditure programme is a fraction of what is used to be. Recovery is simply not on the public sector side. Although the government is reasonably doing what they said they’d do, there is underspending on capital projects to allow more money for current expenditure. It’s also important to mention that not all the money in the public capital programme is spent on construction. In addition, we still have a major infrastructure deficit on the public sector side and not just in terms of roads but in relation to hospitals, schools, third level education and water schemes…

Other changes which are set to have an impact on the industry include the Building Control (Amendment) Regulations, the intention of which is to increase the focus on inspection and develop a culture of compliance within the industry. The increased responsibility and change in risk-profile for owners, builders and design professionals under the regulations will most likely increase the cost of completing projects in both the public and private sectors. Increased costs will be in relation to insurance cover, additional design team fees in complying with the legislation, on-site programme implications and administration costs. Provisions will need to be built into contracts to ensure builders comply with requirements under the regulations, including co-operation with the Assigned Certifier and provision of acceptable ancillary certificates. The certification process imposes challenging responsibilities on and additional liabilities for all parties involved in the process. It will certainly take time to settle and may involve modifications to the regulations over the coming years.”[emphasis by BRegs Blog]

Read full article here: “Bruce Shaw’s Derry Scully – An Industry in Recovery

Other posts of interest:

€ 5 billion | The extraordinary cost of S.I.9 self-certification by 2020

BC(A)R SI.9 Submission Series No 7 | Architect’s issues: Eoin O Cofaigh FRIAI

BC(A)R SI.9 Submission Series No 4: Proposal for a Better System

Construction Law Update: Phased by BCAR? | Mason, Hayes and Curran

ie:3p | Ireland: Paudie, Pyrites and Premier Insurance

Practical post 27: What happens when… a certifier resigns from project due to fees dispute?

2 thoughts on “Bruce Shaw urge caution on additional costs for BC(A)R SI.9 roles & liability

  1. Michael O'Neill MRIAI

    RE:

    http://www.bregsforum.com/2015/08/11/bruce-shaw-urge-caution-on-additional-costs-for-bcar-si-9-roles-liability/

    Bruce Shaw urge caution on additional costs for BC(A)R SI.9 roles & liability

    It is heartening to see an industry leader like Bruce Shaw state matters plainly like this. The level of liability for Assigned and Design Certifiers is unsustainable.

    Becoming the sole focus for primary legal action and with a strict interpretation of the term “compliance” it will only take one large hit on one scheme to wipe out a small firm and cause serious difficulties for a large firm.

    PI insurers, when they see their clients forced to catch grenades for EVERYBODY ELSE involved in the procurement of a physical building, will blanche at the thought of it and run a mile.

    This government of chancers, who reneged on their election promises one after the other, have no business legislating for an industry they clearly only know in passing (as in when they are passing by looking for votes!), and then have the neck to complain that the increased standards they set are going to cost their self-building voters more money!

    I should hope so! If you demand a Roll Royce service, don’t expect to get it for Mini minor prices. If you do pay a Mini-Minor price, don’t be surprised when you get what you pay for.

    Well done to Brice Shaw for speaking out on this.

    In particular well done for pointing out that Contract will have to take up the shortfall between Assigned Certifiers and Builders.

    It is clear that in terms of liability and responsibility, the current legislation is a step backwards, to the great benefit of rogue developers and criminally negligent builders, who will try to hide behind the Certifiers’ pieces of paper.

    Reply
  2. Andrew Alexander MRIAI

    This is an interesting and timely post given the absolute naive, scandalous and amateurish feedback from the Departmental review doc on the subject of “costs” associated with SI.9.
    I can understand a Minister coming out with some of the things they have said but not a government department.

    As per the review doc the Certifier is not only viewed by the Dept as an Inspector and a Certifier but also a “Quality Assurer”.

    In the review doc the fault of extra costs are squarely blamed on professionals for overcharging fees.

    No admission is made that the very structure of the legislation results not only in increased costs but uncertain costs which can, will and I’m sure are arising as a result of clients changing things, the certifier having to attend twice as many meetings as originally envisaged, the certifier having to hand hold clients, hand hold builders, re-visit the site to inspect rectified non compliant work, chase up Ancillary Certs etc

    None of this arises under the British system where the fee is fixed from the outset (like planning) the Inspector acts on behalf of the local authority, signs off (or not) on what he / she sees on that particular day and ultimate responsibility for compliance rests with the party who have done the work – the designer the drawings and the builder the work, the supplier the product etc.

    Absolute compliance can never be guaranteed by professionals however a ‘culture of compliance’ can be.

    A culture of compliance can be realistically achieved by the implementation of an Inspection Plan and the signing not of a Certificate of Compliance but a Certificate of Inspection by an Assigned Inspector – not an Assigned Certifier,

    A comprehensive, compliant Inspection Plan is worth way more than its weight in gold, is the best thing we can offer our clients and is the limit to which we as professionals should be prepared to go.

    An compliant Inspection plan can then serve as the basis upon which the property can be insured. The plan could even be vetted by the insurer’s own building professional.

    Thereafter any time the insurance is renewed the plan should be checked, reviewed and updated to take into account deterioration and amendments the client may have made to the property etc.

    Omnipotent Certification should be thrown in the dustbin and should not be entertained by professionals.

    The insurance industry must be laughing at us. When they offer insurance they agree to pay out in the event that something unfortunate happens or a defect arises.

    When we sign certificates of absolute compliance we are saying “Don’t worry, this building is so perfect that nothing unfortunate is going to happen and no defects are going to arise.”

    The extent to which we have been prepared to act as human shields for others is frightening.

    Reply

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