Amid the Senate Inquiry Into Non-Conforming Building Products, issues associated with the use of materials which do not meet the requirements of the National Construction Code (NCC) have been the subject of considerable attention in recent years.
Whether it’s faulty cables, exploding glass, roofing materials containing asbestos or cladding which is used in situations where it is not fit for purpose, non-compliant products are a significant issue.
For architects, this raises questions about any legal or insurance issues which they face where non-compliant products (NCPs) are used on their projects.
According to John Merlo, director and principal lawyer at Brisbane-based construction law firm Merlo Law, issues arise from several areas.
First, whilst the NCC acts as a form of ‘umbrella’ controls, Merlo stresses that each jurisdiction has its own laws, bylaws such as regulations, codes and product installations requirements. In some instances, he says, these themselves may run in a manner which contradict the relevant aspects of the Code. Architects, he says, should be aware of this and should be cognisant of any specific rules which apply within the jurisdiction in which they are working.
As critical actors within the building process, Merlo says architects are responsible for the use of products on site and could be held to be liable where these are non-compliant. Legally, he said architects face risks where they are unable to be certain that products comply with all applicable standards.
Whilst compliance certificates have their role, Merlo cautions that fraudulent documentation can be a problem. Relying upon documentation provided by the supplier or agent, he said, can be problematic.
A further challenge is product substitution, which can occur where products as specified in the plans are either more costly compared with alternatives or are not available. Architects, Merlo said, can insist on clauses being included within construction contracts which require the builder to demonstrate that any substitution is equal or superior to the products which are originally specified. Nonetheless, he says that where architects are not involved in decision making processes on site or inspecting products when they arrive, ensuring that this is complied with can be difficult.
In terms of duty of care, Merlo says architects have a responsibility to ensure that products specified meet the performance requirements of the NCC. In term of practicalities, he says that in the case of performance solutions, conformance can be achieved through verification methods, evidence of suitability, comparisons with deemed-to-satisfy (DTS) solutions, or expert judgement. Where conformance is being achieved through a DTS solution, he says it can be verified through DTS provisions, evidence of suitability or expert judgment. Whether a performance or DTS solution is being used, he stresses the importance of adequate documentation should not be underestimated.
In terms of the big picture, Merlo says architects should maintain comprehensive records about when products are inspected, where they were received and confirmation that relevant products comply with the NCC. Those who are uncertain or unaware of how any relevant provisions of the NCC should apply should seek legal advice, he said.
Where an architect is in the position of project managing or supervising the construction process, Merlo cautions that additional responsibilities can apply. In Victoria, for instance, recent amendments to the Building Act 1993 have made it an indictable offence for those who contravene the Act. This includes a person who is ‘in the business of building’, carrying out building work that the person knows is not being carried out in accordance with the Act, the building regulations or the relevant building permit. Given how the Act defines ‘in the business of building’ he argues that architects who act in a project management capacity may be cause under this provision.
Speaking largely from a risk management and insurance viewpoint, Wendy Poulton, Manager, Risk Services at Informed Professionals, an online risk management knowledge platform run by insurance firm Planned Cover, says professional indemnity insurance is the main type of insurance required to cover situations associated with action being taken against the architect for non-conforming products. This is the case, she says, because claims made against the architect will often allege that their specifications, advice or inspection was negligent. Given that public liability insurance policies often exclude claims arising out of professional services, any public liability insurance held by the architect would not typically cover this scenario.
From a risk management perspective, Poulton says architects face several issues in respect of NCPs. As generalists, she says that architects should use the expertise of a reasonable architect but must also be prepared to call upon specialists such as fire or chemical engineers where needed. With the growth in new technology, significant expertise now rests with manufacturers and trade contractors. Finally, the changing role of architects and the growth of specialised project managers who have in some cases displaced architects from the project management role. Where this has happened, she says architects should ensure that the scope of their position and their duties is clearly stated on the contract.
When it comes to ensuring that products which they specify meet Code requirements, Poulton says there are several steps which architects should take. These include preferring products with either CodeMark approval or NATA testing, obtaining credible certificates in respect of compliance from the manufacturer (and rejecting less credible ones or ones with errors), requiring the builder to obtain a certificate where substitution has occurred (being sure to specify that the substitution cannot proceed until the architect is satisfied), preferring local manufacturers, bearing in mind that the NCC sometimes mandates testing methods (e.g. for non-combustibility or slip resistance) and that overseas manufacturers might not undertake this correctly and seeking advice where appropriate.
All up, Merlo says the potential liability for architects associated with non-conforming projects should not be underestimated and that architects should seek appropriate legal advice in managing these risks.
He points out that in some cases, architects may be solely liable for professional negligence even where part of the fault in fact lies with the builder. An architect could potentially be liable for misrepresentation, for example, where they reiterate an unqualified view surrounding the compliance of a product later found to be defective.
Australia faces considerable challenges in terms of non-complying products.
If they are to avoid liability, architects must take sensible precautions.