Resource hub: Developments and updates in the building and construction industry
Australia is seeing sweeping state-based legislative reform intended to regain public confidence in the building and construction industry. For example, in NSW, the Design and Building Practitioners Act 2020 will have a significant effect on establishing the liability of design and building practitioners within the construction industry and how they are insured. In contrast, the Victorian Government has established the Building Reform Expert Panel to lead its review of the building legislative and regulatory system, with changes to occur over two years and ultimately resulting in a new Building Act in 2023.
Wotton + Kearney’s national team of Construction PI specialists, led by Nick Lux , Andrew Brennan, Robert Finnigan, Andrew Moore, Charu Stevenson, and Luke Vincent is closely following this landmark reform and will provide continuing coverage and commentary on the insurance and state-based impacts through a series of updates and resources which you can find on this page. They will also comment on developments, updates and trends affecting the building and construction industry more generally.
Model guidance for consistent national construction reforms (May 2022)
The ABCB has issued an Implementation Report and model guidance documents that address most of the recommendations contained in the 2018 Building Confidence Report. While significant consumer and industry benefits associated with consistent adoption of the model guidance have been identified, the decision to implement the model guidance ultimately rests with state and territory governments. https://bit.ly/3Lmv5Zq
COVID-19 construction pause (October 2021)
Victoria’s construction industry warns of long term impact and build-time delays due to two-week shutdown – 29 September 2021
The two week construction ban in Melbourne and regional Victorian areas subject to lockdown restrictions has placed greater strain on the construction industry with the associated costs and delays expected to be felt by construction businesses for some time to come. Read in full here: https://bit.ly/3p3Gbel
Developers slam Victoria’s construction ban – 23 September
The two week construction ban has been estimated to have cost the Victorian economy between $2 billion and $4 billion. The strain is being felt by commercial and domestic builders alike due to delays to building inspections and COVID compliance requirements. Read in full here: https://bit.ly/3CpEmfO
‘We’ve set higher standards’: Victoria construction industry returns under strict Covid rules – 5 October 2021
Although the two week ban has now been eased, restrictions remain in place as to the number of staff permitted on domestic and commercial construction sites. Construction sites will now be placed under further scrutiny and must have a designated COVID marshal at all times the site is operational. Read in full here: https://bit.ly/3FRpcBR
Construction defects – builders winding up during COVID, leaving owners with defective buildings (August 2021)
Building supply shortages – 17 May 2021
2021 has seen a construction boom fuelled by people investing money improving their homes whilst overseas holidays remain out of reach. However, increased demand for building supplies and the loss of local timber due to the 2020 bushfires has meant that builders have not been able to reap the full rewards with many facing unforeseen increased material costs and significant delays in completing works. Read in full here: https://bit.ly/3mKMIcC
Builders going bust despite boom due to material shortages – 18 June 2021
Despite Australia being in the midst of a construction boom spurred by people investing in home renovations instead of overseas holidays, builders are losing money due to supply shortages causing material price increases and costs associated with delays to construction timeframes. Read in full here: https://bit.ly/3Bq0x4j
Sweeping changes to the National Construction Code in 2022
NCC 2022 will be the next and arguably the most significant amendment to the national building code since its inception in terms of the volume of changes and the scope and impact of the proposed reforms, particularly for houses and low-rise apartments. Read in full here: https://bit.ly/3jsWeiw
HIA predicts Australia’s construction boom will hit a wall by mid-2022 – 23 August 2021
Despite the strong outlook for the next twelve months, without a return of demand for new housing from overseas migration, there will be a decline in new home commencements over the next few years. From mid-2022, adverse impacts will emerge from two years of lost population growth, higher building costs and a shadow of demand created by the HomeBuilder grant initiative. Read in full here: https://bit.ly/38nvkm2
Cladding compensation period extended for building owners
Building owners will be given more time to commence legal proceedings against builders responsible for installing combustible cladding with new legislation recently being introduced by the Victorian government increasing the time limit for commencing a claim from the previously extended 12 years to 15 years. The legislation will extend the time in which cladding claims can be brought to 15 years where the limit for such claims would have been reached between 16 July 2019 and 1 December 2023. Read in full here: https://bit.ly/3ltTRvJ
Technology and digitisation in construction (July 2021)
Technology can help in COVID Economic Recovery – 22 April 2021
Post COVID-19, Australia has a “massive pipeline of infrastructure work”. Technology may play an important role in both the planning of projects and determining which projects should proceed. Read in full here: https://bit.ly/2TdgIlg
5 technologies helping to maximise infrastructure investment in 2021 – 24 May 2021
The federal government has announced that it is investing $110 billion into public assets as part of its 10 year infrastructure program. Following this investment, this article considers the 5 technologies the government is already “leveraging” to “deliver better infrastructure”. Read in full here: https://bit.ly/3wIhnbP
Easier access to strata information
As part of its digital reform, the NSW Government is considering feedback following the launch of the Strata Portal (one part of the broader Strata Hub). The aim is to then launch the Strata Hub by late 2021. Read in full here: https://bit.ly/2U18Nbe
Construct NSW Update Report – February 2021
The Office of the NSW Building Commissioner has advanced its digital reform initiatives as referred to in our October 2020 publication. This report outlines which platforms have been finalised, and the status of the remaining initiatives. Read in full here: https://bit.ly/3xDxkS0
Legislative reform of the building and construction industry in Victoria (May 2021)
Victoria’s establishment of Building Reform Expert Panel – April 2021
The Victorian Government has established a Building Reform Expert Panel and is currently seeking input from the public in order to introduce regulatory and legislative reform. The changes are to occur over two years and will ultimately result in a new Building Act in 2023. Public submissions close on 19 May 2021. Read in full here: https://bit.ly/33wvdls
Building reform discussion paper released – 26 April 2021
The Australian Institute of Architects submissions to the Victorian Building Reform Expert Panel will respond to whether separately regulating design practitioners and architects, “fragments regulatory oversight of persons involved in building design”. Read in full here: https://bit.ly/3uGi45v
Victoria building consultation flags insurance reform – 12 April 2021
The Building Reform Expert Panel is considering the introduction of project-based insurance as it can provide a “single, first resort, insurance instrument that unites the interests and strengthens the accountability of all parties involved in a single building project..”. Read in full here: https://bit.ly/2SIfldJ
Unprecedented opportunity to fix our building regulatory system – 8 April 2021
Victoria’s Building Reform Expert Panel is seeking submissions on the issue of the conflict of interest where a developer appoints their own private building surveyor. The MAV’s reform model would involve the VBA assigning private building surveyors to complete inspections. Read in full here: https://bit.ly/3vXYq5i
Frameworks and timelines:
W+K articles and updates:
NSW: Risk profile for construction professionals rises with new Supreme Court decision – 31 May 2022
The Supreme Court of NSW has handed down another decision that considers the scope of the duty arising under the DBPA and to whom it is owed. In Pafburn, the court established the duty is prima facie owed by those who are able to control how the construction work is carried out, even if they were not involved in the carrying out of the construction work itself. Read in full.
NSW: NSW Supreme Court clarifies scope of statutory duty of care for construction industry – 23 May 2022
On 19 May 2022, the Supreme Court of NSW handed down the first substantive decision on the application of the statutory duty of care introduced by Part 4 of the Design and Building Practitioners Act 2020 (NSW) arguing that the statutory duty of care extends to ‘building work’ on any building or structure, including any part of a building or structure. Read in full.
National: Model guidance for consistent national construction reforms – 19 May 2022
The ABCB has issued an Implementation Report and model guidance documents that address most of the recommendations contained in the 2018 Building Confidence Report. While significant consumer and industry benefits associated with consistent adoption of the model guidance have been identified, the decision to implement the model guidance ultimately rests with state and territory governments. Read in full.
VIC: Cladding appeal decision provides further clarity about the ‘attachment’ exception – 25 October 2021
A recent decision to uphold a NCAT appeal decision has provided a useful judicial articulation of some of the relevant clauses from the Building Code of Australia regarding cladding compliance. The decision also provides further clarity about the ‘attachment’ exception which, in certain circumstances, permits the use of combustible cladding. Read in full.
Brokers: Legal developments in the building and construction industry – 10 October 2021
W+K Construction PI specialists Nick Lux and Robert Finnigan feature in the October issue of NIBA Insurance Adviser magazine providing an update on Australia’s building and construction industry reforms, including key regulatory and risk developments affecting the sector and their implications for insurance brokers. Read in full here.
VIC: Why the Lacrosse appeal raises new questions about professional indemnity risks – 31 March 2021
Following our summary of the Lacrosse appeal decision, W+K’s Construction PI team examine the key issues addressed by the Court, including liability apportionment, Building Code of Australia requirements and the use of the peer professional opinion defence. Read in full here.
VIC: Lacrosse appeal [largely] upholds initial landmark decision – 26 March 2021
The Victorian Court of Appeal handed down its much-anticipated judgment in the Lacrosse matter on 26 March, essentially upholding the trial judge’s findings in the landmark 2019 decision. W+K’s Construction PI team provide a summary of the findings. Read in full here.
NSW: Mandatory insurance requirements begin to take shape – 3 December 2020
The NSW Government released the Draft Design and Building Practitioners Regulation 2020 (NSW) for public consultation, which is designed to support an effective legislative framework for industry reform. W+K’s Construction PI team look at the implications for insureds, insurers and brokers. Read in full here.
NSW: Digital reform initiatives to reboot NSW building industry – 6 October 2020
The NSW Government is implementing building reforms with the aim of changing the culture and capability of the NSW building industry. Two key digital initiatives are designed to boost both compliance and long-term confidence. W+K’s Construction PI team look at how these changes will better inform insurers in assessing and pricing risk. Read in full here.
NSW: New RAB Act gives regulator real power to tackle construction defects – 31 July 2020
The NSW Government has introduced sweeping legislative changes that are intended to regain public confidence in the construction industry, including the Building Commissioner’s significant new powers designed to prevent developers from constructing defective buildings under The Residential Apartment Buildings (Compliance and Enforcement Powers) Act 2020 (NSW) (RAB Act). W+K’s Construction PI team look at the implications for insurers. Read in full here.
NSW: Compliance declarations – NSW’s new regime for construction professionals set to improve the industry’s risk profile – 21 July 2020
The NSW Government’s new compliance declaration regime requires building practitioners with reporting obligations to be registered and ‘adequately insured’. W+K’s Construction PI team discuss how the reforms will change the risk profile of the industry by better placing insurers to assess risk when underwriting construction professionals. Read in full here.
NSW: A new duty of care changes the liability landscape – the impact of the Design and Building Practitioners Bill 2020 – 9 June 2020
With the Design and Building Practitioners Bill 2020, the NSW Government has introduced sweeping legislative changes that are intended to regain public confidence in the construction industry. W+K’s Construction PI team look at these landmark legislative changes and the implications for insurers. Read in full here.
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For more information on any of these updates or to talk to us directly, please contact our National Construction PI team. Download team card.
This publication is intended to provide commentary and general information. It should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this publication. Persons listed may not be admitted in all states and territories. For our ILP operating in South Australia, liability is limited by a scheme approved under Professional Standards Legislation.