NSW Should Consider Registering all Building Practitioners 11

Monday, April 27th, 2015
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Victoria has “broad church” practitioner registration, while New South Wales has “narrow church” or “secular” registration.

In New South Wales, save for accredited surveyors and domestic builders, no one else has to register with the Building Professions Board. In Victoria, all “front line” building practitioners have to be registered with their equivalent, the Building Practitioner’s Board. The practitioners are as follows:

  • Commercial builders
  • Quantity surveyors
  • Draftspersons
  • Residential builders
  • Architects
  • Engineers
  • Building surveyors
  • Building inspectors
  • Plumbers also need to be registered

With registration comes compulsory insurance. It follows that has Victoria nine classes of registrants carrying compulsory insurance and NSW a mere two, which can pose problems for consumers in NSW.

Practitioner monitoring and compliance is important for the full gamut of practitioners in any jurisdiction to ensure that probity and professional standards are upheld. Comprehensive “broad church” registration bodes well for the public as all key players in the practitioner fraternity come under a central oversight and disciplinary arena.

It follows that the mantra of practitioner registration – community protection and the upholding of professional competencies – can be applied. This ensures consistency and balanced risk spread and, for fear of belabouring the point, it generates a critical mass, a very large insured community of key service providers in the building industry. Compulsory insurance provides real accountability because absent insurance, if a defendant can’t afford to meet a liability then insolvency follows and the plaintiff – the consumer if you will – is left high and dry.

The real problem with a “small fellowship” of practitioner registrants is the consumer prejudice that flows from the application of the doctrine of proportionate liability.

Proportionate liability operates as a liability “divvy up” doctrine in multi-party proceedings. Under proportionate liability, no party has to account for any more than his, her or its judicially determined contribution to the liability. In a typical multi-party building dispute to do with building defects, the owner will seek redress from the builder, the building surveyor, sometimes the engineer and frequently the designers. In New South Wales, it is only residential builders and the certifiers that have to be insured by law.

So, in circumstances where the plaintiff, after having spent huge sums of money, ultimately obtains judgement in a court of law or a tribunal against all defendants, it may well be pyrrhic victory. If some of the defendants such as the engineer and the designers are uninsured, they may not have the capacity to pay for their judicially apportioned level of responsibility. They may instead choose to wind up their company or opt for bankruptcy and then like a phoenix rising from the ashes, regroup and reassert themselves under another corporate guise.

Absent compulsory insurance, the plaintiff may only get 50 to 70 per cent of the judicially assessed compensation. This is pretty rich when you think about it, particularly in circumstances where “South of the Border,” all building practitioners by virtue of the compulsory insurance requirement are capable of coughing up and confronting their liabilities since the late 90s.

From a holistic and utilitarian point of view, the NSW registration regime is reminiscent of an incomplete jigsaw puzzle because it is missing the vital ingredients of broad church registration and the wider net of insurance that couples up with registration. This regime has established itself as the status quo for nigh on 15 years. It is difficult to find any particular reason as to why the status quo should remain when the insurance products are available, there are established comprehensive registration regimes in place such as the NT and Victoria and there is a worthwhile dividend to the community.

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  1. David Chandler

    Kim, understand your position, but you are putting the condition ahead of the cause. Its a national problem and not one limited to NSW. Frankly my observations indicate that despite the Broad Church approach in Victoria the end product of construction there has been amongst the worst nationally. As a specialist in the field and I do not doubt your best intentions you must become frustrated as I do with the lack of professional integrity amongst some of the congregation you mention. Most telling is when one has really messed up, trying to get another in the profession to say so is nigh impossible. The status quo has many welded on owners.
    I am not sure that just adding another or broader insurance cover to the spectrum will help the industry in the medium or long term. But all the best any way.

  2. beverley-jane

    Currently registration means absolutely nothing, in fact it is misleading to homeowners who trust that the system's regulations offer reassurance. When builders such as ours are permitted to renew their registration year in, year out despite multiple guilty VCAT decisions, multiple successful Builder's Warranty Insurance claims, criminal convictions and liquidation, the system is more dangerous than merely useless. Without homeowners able to access the builders track record and critically his BWI claims history, it protects the predator and not the prey! Our nightmare home, is a constant reminder of the ineptitude of the regulatory and legal system when it comes to this industry. Unfortunately this experience has not only opened our eyes but exposed the enormity of this issue in Victoria and from your articles, the country. Only those who have suffered the debilitating consequences of risking ones life savings on a REPEATEDLY REGISTERED slick conman builder, can truly comprehend the damage this experience inflicts on an entire family. Nobody cares apparently.

    • Andrew

      You're absolutely correct. NSW has a dispute minimisation and information suppression system. Only WA currently has worse access to a builders' background. Of the builder background searches we do at Alwayscheckyourbuilder.com.au, between 30% -40% of builders show some sort of adverse history. It's always a battle getting governments to release public domain knowledge in their possession. QLD seems to be the only state with a system that comes close to working for the consumer.

  3. Stephen Kip

    Kim, I agree completely. Micro-economic reform never intended to strip away necessary safety or consumer measures for the public. With the Federal Government indicating a second wave of micro-economic reform is needed (and the ABCB correctly pursuing an even greater use of performance-based building codes), we desperately need practitioner controls and insurance measures that are clear, achievable and audited and enforced. David's point about Victoria is correct, but not because we have poor legislation, but because we have not audited and enforced compliance.

  4. kim lovegrove.

    I said to someone today that the comments upon my articles make for more fascinating reading than those that I pen. The point I am trying to amplify in this article is that absent compulsory insurance for key construction actors, one should not legislate to introduce proportionate liability. Reason being the consumer needs to be protected from the worst manifestations of proportionate liability which present themselves when only a small percentage of practitioners are required by law to be insured. Granted a proportionate liability and mandatory insurance regime may well have its limitations. But a proportionate liability regime absent mandatory broad church insurance is from a consumer protection point of view attended by considerably more limitations; for unlike joint and several liability, absent mandatory insurance, proportionate liability will all too often, prevent plaintiffs from getting financial redress from the full cast of responsible actors.

  5. Tony Fendt

    Maybe the better option is to return to the system of professional registration which includes examination … like we used to have in the 80's before the deregulation bomb undid standards and encouraged sly behavior.

    If you can't meet the expectations of your practitioner peers, you can't access PI insurance.

  6. Anne Paten

    I can understand why Kim would support registration, but it is astounding to suggest that the Victorian registration model has delivered practitioners with “professional competencies”. It has not. More bewildering is the proposal that any other state should emulate Victoria, the home of systemic regulatory failure for 20+ years.
    In Victoria, ‘registration’ is worse than meaningless. Large numbers of practitioners have been ‘grandfathered’, ‘registered’ without any qualifications or technical skills. Many others admit to buying their ‘registration’. Third, we have those ‘qualified’ as builders with a Certificate IV, and this requiring no building skills or experience!
    In relation to compulsory insurance and ‘registration’, both BWI and PI are impossible for 99% of owners to claim. It is ‘No Resort’ insurance.
    ‘South of the border’ ‘down Mexico way’, we have a lawless industry where Victorian cowboys and insurers rule. All avoid liability; there is no “probity or professional standards”, no “monitoring”, no enforcement, no discipline. Re the concept of “balanced risk”, this is baloney. Victorian consumers are the only ones at risk – with 40% of owners seriously damaged every year.

    • kim lovegrove.

      In terms of emulating Victoria, the contention is that "emulation" pertains to broad church registration & compulsory insurance to overcome the vagaries of proportionate liability "PL". PL absent insurance = zero relief for consumers confronted with insolvent practitioners. That is not to say that insurance is a "cure all", for it is not, but better to reintroduce joint and several liability than maintain "proportionate liability" absent insurance. As to assessing the competency criteria and levels of oversight of the practitioner community, VAGO recommended a major regulatory overhaul to take on board community concerns many of which you amplified Anne which has generated an amending bill that hopefully will solve some of the issues that have caused serious consumer disquiet. It is a given that a robust, registration system requires impressive competencies and registration criteria, robust auditing; part and parcel of this is I suggest mandatory CPD to engender a culture of improvement. It is also a given that a registration regime must be well resourced and preoccupied with protection of the public from the vagaries of the recalcitrant, regardless of the jurisdiction.

  7. Scott Whitehouse

    I feel it should be a requirement for all draftspersons working in NSW to be registered with the BPB. The time frames for approval's would increase dramatically if the architectural plans submitted achieved a minimum standard. Currently in NSW tertiary education in the field of building design is not viewed as a fundamental requirement to practise. It is frustrating from a certification view point and I presume it would also be frustrating from a client prospective when it is obvious some practitioners have very limited knowledge in the field of building design.

  8. Mark Whitby

    In Victoria, due to non-robust auditing over the last 21 years since building surveyors were privatized, virtually every single house project with obvious defects has (as required) had registered building practitioners approve the works (building inspectors / builders and very often building consultants). I think Kim that what Anne is suggesting is that the lack of de-registration of these offending registered building practitioners has not, and is still not happening.

    With home owners spending over $3Billion per year and builders likewise, isn't the real issue the importance of having practitioners who care sufficiently to find all of the defects in the work, (be they registered or not)… and having authorities that care for the consumers first and the participants in the industry second, not the other way around as obviously has been happening?

    Give me a practitioner who is knowledgeable and caring and I say the registration pales into insignificance when the registered practitioner cannot make the effort to find the defects and hides behind a list of mind-boggling disclaimers.

    I do however agree that compulsory insurance is important for the protection of the public.

  9. Mark Whitby

    Does anyone know how the NSW home owners vs Victorian home owners rate as regards expenditure fighting practitioners. That might add weight to the argument for registration. Or is Victoria winning in those stakes as well as registration and non-de-regulation.