Under Construction: Recent legal developments within the UK construction industry | October 2024

The Grenfell Inquiry's final report 

The Grenfell Inquiry's final report, published on 4 September 2024, identified key failures by those responsible for ensuring the building and its residents' safety and highlighted a number of recommendations which the government will now consider carefully. 

Read our analysis of the report and its potential impact on UK regulation of the built environment

The Construction Leadership Council publishes new golden thread guidance 

The Construction Leadership Council (CLC) has recently published new guidance which provides a comprehensive overview of the golden thread of information that is required over the lifespan of higher-risk buildings. This should be a useful tool for contractors, designers, accountable persons and other dutyholders to gain a holistic understanding of golden thread information, their related legal duties and good practices for information storage and management.

The golden thread of information is a concept developed for higher-risk buildings (HRBs) and was first articulated in Dame Judith Hackitt's 2018 Grenfell Tower report, as both:

• the information gathered over the course of the building lifecycle which allows someone to understand the building and keep it safe; and
• the information management systems that hold such information following certain principles, for example ensuring information is in electronic form, accurate, and up-to-date. 

The Building Safety Act 2022 has sought to implement this concept, setting out several legal requirements in relation to HRBs which vary depending on the phase of the construction project. 

The new CLC guidance provides guidance on the regulatory regime and is split into three main parts:

• The first section (Section 2 in the guidance) explains the legal basis of the golden thread and how it fits in with the regulatory regime.
• The second section (Section 3 of the guidance) focuses on the design and construction phase of HRBs, outlining: golden thread requirements on dutyholders; how the golden thread information develops from gateway one to gateway two; how the golden thread information develops during the construction phase; and what information is required in support of a gateway three application.
• The third section (Section 4 of the guidance) focuses on the golden thread for occupied HRBs (existing and new), outlining relevant requirements for accountable persons and guidance on information management post-construction. 

Section 3 will be of particular relevance to clients/developers, principal designers, principal contractors and the wider professional team responsible for designing and building a new HRB. 

The drafting group for the new guidance acknowledges that the broader understanding and experience of the golden thread will necessarily evolve given the relative infancy of the new building safety regulatory regime. It would therefore welcome feedback and knowledge sharing on the guidance.

Higher Risk Buildings: confusion over whether a roof garden counts as a storey 

Certain provisions of the Building Safety Act 2022 (BSA 2022) apply only to higher-risk buildings (HRBs). In general terms, an HRB is a building of at least 18 metres in height or which has at least seven storeys. The definition of a "storey" is therefore of critical importance in determining the legal obligations in relation to some buildings. 

The government is re-evaluating its guidance on counting storeys in higher-risk buildings after a First-tier Tribunal (FTT) ruled, in the Smoke House case, that a roof garden counts as a storey. This decision has thrown a spotlight on the existing government guidance, which states that open roof-tops like roof gardens should not be considered storeys. 

The government has noted that this contradiction creates uncertainty and is reviewing the situation, but for now, practitioners are in a difficult position navigating this grey area while they await further clarification. 

The government guidance states that "A storey must be fully enclosed to be considered a storey. The roof of a building should not be counted as a storey. Open rooftops such as rooftop gardens are not considered storeys and should not be counted as such when determining the number of storeys or measuring the height." 

The Higher-Risk Buildings (Descriptions and Supplementary Provisions) Regulations 2023 (SI 2023/275), which supplement the BSA 2022, state that a roof-top is not classed as a storey if it is a "roof-top machinery or roof-top plant area or consists exclusively of roof-top machinery or roof-top plant rooms". In Smoke House, the FTT applied the regulations, finding that they "provide that any storey containing exclusively machinery/plant is not to be counted when calculating the number of storeys…This, by implication, would therefore mean that a useable roof top containing a roof garden together with plant/machinery would count as a storey". The FTT commented that the government guidance appeared to go beyond the wording of the legislation and was not a reliable interpretation of the law. 

In response, the government has appended a note to the guidance, indicating that both it and the Building Safety Regulator are reviewing the FTT's view in the Smoke House case. However, "until stated otherwise, the sector and regulatory bodies should continue to refer to existing government guidance". In the meantime, this leaves industry in a difficult position where a roof garden may be the deciding factor in determining whether the building is an HRB.

The set off of an adjudicator's decision – smash and grab v true value

The recent decision of C.N.O Plant Hire Ltd v Caldwell Construction Limited provides a stark reminder of the importance of sending prompt and valid payment and pay less notices where a payment application is disputed. A failure to do this can leave a payer with little option but to "pay now and argue later", even in the context of a subsequent more favourable adjudication decision.

In this case, the court evaluated whether set off could be ordered in adjudication enforcement proceedings between two adjudicators' decisions.

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Court of Appeal provides clarity on contractor's right of termination under JCT 2016 D&B

The lawful triggers for termination by a contractor under a JCT Design and Build 2016 contract were dealt with in a recent Court of Appeal decision (Providence Building Services Ltd v Hexagon Housing Association Ltd).

The court itself acknowledged that its decision put employers on "thinner ice", and the outcome of the case illustrates why this particular clause (which is replicated in JCT 2024) is sometimes excluded from the standard form contract by employers.

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