In breach of the regulations

Failure to comply with obligations under the Building Regulations can lead to legal liability on a number of different bases depending on what your role is and who is crying 'non-compliance'. But what are the potential consequences of breach? Under the Building Act 1984, if the local authority decides to bring an action in the magistrates' court, the person who carried out the work could be liable (if convicted) to a fine of up to £5000 plus £50 for each day for which the default continues after conviction. The local authority also has the power to order the building owner to rectify or remove work, which contravenes the Building Regulations within 28 days. Alternatively, the local authority can execute remedial work itself and recover the expenses from the owner. Under the Defective Premises Act 1972, anyone carrying out work in relation to a dwelling could find themselves liable to anyone who later acquires an interest in that dwelling if the dwelling is not fit for habitation when completed. There is no equivalent statutory liability in relation to commercial property. Under the Consumer Protection Act 1987, Part 1 where defective products cause damage to property which is ordinarily intended for private use or occupation, an action can be brought against the manufacturer or producer of that product.

Contractual liability
In contractual liability, if the contract specifically requires compliance with the Building Regulations the other party will be able to bring an action for damages for breach of contract if the work does not comply. There is also the possibility that the person carrying out the works could have contractual liability to third parties under the Contracts (Rights of Third Parties) Act 1999 if the contract either expressly provides for the third party to enforce rights under it or it can be interpreted as purporting to confer a benefit on the third party. The third party must be identified in the contract either by name, description or by class. However, the current practice of contract drafters is to exclude the operation of this Act.

Common law liability for work that fails to conform to the requirements of the Building Regulations will only arise where there has been negligence. Establishing liability in negligence requires finding that there was a relationship between the claimant and the defendant of sufficient 'proximity' to create a duty of care. The most common situation in which this question arises is in relation to claims by owners or occupiers of buildings against contractors/sub-contractors/sub-consultants who they allege have carried out faulty work or against designers who they allege have produced a defective design, which has led to a defective building.

The scope for such causes of action has been severely restricted in the last 10-12 years by the House of Lords' decision in Murphy versus Brentwood District Council. This decided that where defective work only causes damage to the building itself (and not death or injury to people or property other than the building itself) that type of loss cannot be recovered since it is classified as pure economic loss, that is a pure monetary loss in terms of the diminution of value in the building. On the other hand, if defective work causes damage to other property (for example, free-standing equipment contained in the building) or adjoining property then the person carrying out the work could be liable.

If the local authority decides to bring an action in the magistrates’ court, the person who carried out the work could be liable to a fine of up to £5000.

An exception to this restriction is available in cases of negligent advice. Thus in the recent case of Sahib Foods Ltd versus Paskin Kyriakides Sands (3 March 2003) it was held that architects who were negligent in failing to advise the leaseholders of a factory on the use of proper fire-retarding panels were liable for loss caused by the fire. The architects also owed a duty of care to the Co-Op who had entered into a contract to buy the freehold and who were therefore beneficial owners of the land.

There is also a possible exception to the rule against recovery for pure economic loss under what is termed the complex structure theory. According to this, where one part or component of a building or structure is built by a separate contractor and a defect in that part or component causes damage to other parts of the building or structure then the loss suffered is recoverable. In the Murphy case, Lord Bridge referred to the example of a defective central heating boiler exploding and damaging a house.

In respect of the potential liability of a local authority in negligence, it was held by the House of Lords in the Murphy case that a local authority which had been negligent in approving what turned out to be inadequate foundations did not owe a duty of care to the owner/occupier for the cost of repairing/reconstructing the property. Again, the situation may be different if there is damage to other property and/or where the complex structure theory could be applied. There is also likely to be a cause of action open to the owner where the defect in the building creates a danger to adjoining property: Morse versus Barratt (Leeds) Ltd.