Please don’t let me be misunderstood – The Approved Building Inspector
Of all the professions in the construction industry, approved building inspectors (“AIs”) are perhaps the most misunderstood.
AIs are a creature of statute and essentially are private companies performing the statutory inspection and certification role set out under the Building Act 1984. Along with local authority departments, AIs are collectively known as Building Control Bodies (“BCB”).
In determining the scope of an AI’s duties to its client, the written appointment document will be key but the CIC Approved Inspectors Register (“CICAIR”) Code of Conduct for Approved Inspectors (“the Code”) also provides useful guidance. As the Code makes clear, the owner and occupier of the property or land in question is ultimately responsible for complying with the relevant planning rules and building regulations. The role of checking that Building Regulations are, as far as can reasonably be determined, being complied with falls to a BCB.
Essentially, therefore, the role of a BCB is to act as an independent third party check and to take such steps as are reasonable to be satisfied that the works comply with the Building Regulations. It is not, however, their role to:
- provide quality control of the works;
- provide a ‘clerk of works’ service;
- address the finish and aesthetics of the works where these are not Building Regulation matters; or to
- provide a contractual protection or guarantee.
This is often misunderstood by clients, particularly residential home owners inexperienced in building matters. We often see claims being made where the building contractor has become insolvent and the building owner expects the AI to act as some sort of guarantor.
An AI can seek to restrict the scope of its appointment and, subject to the usual reasonableness tests, any liability arising, whether in the form of a limitation of liability clause, a net contribution clause (“NCC”), or both. An NCC effectively requires an equitable apportionment of responsibility between the various parties involved in the project rather than the AI having joint and several liability.
An AI should also be alert to the common practice in the construction market of parties in a contractual chain referring in the downstream contract to those features of the upstream contract. This is done to impose responsibility upon the downstream contractor or consultant and might give rise to large or unusual claims.
An AI should seek to restrict its agreed standard of care to the usual, implied standard of reasonable skill and care; anything greater could cause insurance issues (this will also be important to the client).
But what does “reasonable skill and care” mean in the context of an AI? For professional negligence purposes, AIs are not yet a recognised profession in the same way that the more traditional architects, engineers and surveyors are. The Guidance Notes to the Code are useful but “standard of conduct” is not the same thing as “standard of care”. The Building Control Performance Standards may also be useful, but are very general in nature. There is no clear judicial authority which discusses precisely what is (and what is not) the standard of care to be expected of a reasonably competent AI.
Ultimately the courts will approach the issue in the same way as they would for other professions, considering the functions of an AI, so a requirement of sufficient knowledge of the Building Regulations (and guidance) and of, for example, architectural issues to enable certification. A court will make an appraisal of the skills required to perform those functions.
A court will no doubt also adapt the approaches taken, and the law relating, to other professionals for example, as to the circumstances when an AI is entitled to rely on others and as to what is required for reasonable inspections. In these matters, the views of experts will be of assistance.
Without a contract in place, a party’s ability to bring a claim against an AI is much more uncertain. The House of Lords’ decision in Murphy v Brentwood  1 A.C. 398, established that Local Authority building control inspectors did not owe a duty of care in respect of the economic loss caused by negligence (i.e. a failure to identify non-compliance with Building Regulations) and there is no authority that the position is any different for a private AI.
In Herons Court v Heronslea the TCC  EWHC 3309 (TCC) (and then the Court of Appeal  EWCA Civ 1423) held that an AI did not owe a duty under section 1(1) of the DPA 1972 which it said was targeted at professionals who were contributing to the design and construction of the building (such as architects). The Court of Appeal concluded that AIs have “no statutory power to influence the design or construction of a building in any way, save to stipulate that it must comply with the law. In certifying, or refusing to certify, plans and works, the AI is not engaged in the positive role of the provision or creation of the relevant building, but performs the essentially negative regulatory role of checking for compliance against prescribed criteria.”
In Zagora v Zurich  EWHC 140 (TCC), a claim for deceit/fraudulent misrepresentation failed on the basis that, although the court accepted that the AI knew statements it had made in the Building Regulations final certificates were not true, or had been reckless as to their truth, the claimants were unable to demonstrate reliance on the final certificates.
With all the uncertainty in the law surrounding AIs, it is important that clients embarking on building projects understand what an AI is, and is not contracting to do, and make alternative or additional arrangements if, for example, a clerk of works service is required. AIs can assist by explaining their role to the client and ensuring that this is accurately reflected in the appointment document, significantly reducing the scope for disputes arising in the future. Ensuring that their appointment suitably limits an AI’s potential liability, as well as adopting sensible risk management procedures during the course of the appointment, will help in the event where a dispute cannot be avoided.
Contact our expert construction law solicitors who can provide further specialist advice.