The Dangers of Poorly Conceived Building Law 3

Friday, January 15th, 2016
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Reforming jurisdictions often look to other jurisdictions as models for legal and microeconomic reform.

Australia looked to NZ in the 1990s when it introduced the performance based building code. Japan looked to Australian building regulatory law reforms in the late 1990s when it investigated the introduction of private certification of building approvals. I myself looked to the French-based liability concepts of “liabilitie decennial” 10-year liability capping when I headed up the team that developed the Australian National Model Building Act in the early 1990s.

Jurisdictions often derive and extract that which is considered to be best practice building regulation when they reform their Building Acts and Codes from other jurisdictions that are revered and venerated for their supposedly enlightened approach to building control. This is an established law reform methodology, but nevertheless is attended by considerable danger if the reforming jurisdiction fails to carry out thorough due diligence on that which purports or is sometimes “spruiked” as being best practice.

If indeed a reforming jurisdiction is found wanting in its due diligence and comparative analyses, it runs the risk of importing regulatory concepts and innovations that (absent the “laboratory of the passing of time and the studying of new regulatory systems in operation”) are flawed. This can compromise the new regulatory paradigm and give rise to unintended consequences.

The Japanese law reformers are very live to this possibility and their reforming philosophy, or regulatory law reform “scientific method” as it were, is very much concerned with the notion of that which has been observed to fail.

This method has everything to do with “fail-proofing” current and future Japanese building regulation. The Japanese are very careful to ensure that they divorce the rhetoric and representations proffered from well meaning advocates of given systems from the hard facts and the empirical evidence that determines whether those representations resonate with the evidence derived from systems in operation.

This, needless to say, takes great skill and the Japanese are very astute when it comes to determining which people or more precisely which legal and microeconomic reform experts are best qualified to determine whether a regulatory regime is endowed with regulatory elements that are worthy of adopting. The Japanese don’t shy away from consulting with international experts in their quest to get it right.

It follows that when one is fashioning, designing or redesigning building regulation, one does indeed ensure that regulations that are held up as being best practice or desirable practice regulations are indeed that. The analyses of any regulatory regime that is under consideration must be both rigorous and vigorous, and one needs to have access to those highly skilled “artisans” or knowledge tsars who can clinically and impartially apply the intellectual blow torch to the notion of whether to adopt or reject a non-indigenous regulatory concept or innovation.

It is also very important to ensure that where ostensibly enlightened approaches to building control are adopted, a piecemeal approach to adoption is not adopted. The most holistic statutes, regardless of whether they are domiciled in the building regulatory domain or any other regulatory regulatory paradigm, are often complete and comprehensively integrated law reform packages.

Further, they are often ill-suited to partial adoption – somewhat reminiscent of a jigsaw puzzle where the puzzle is only complete if every piece of the puzzle is present. If a reforming jurisdiction is selective in terms of parts of the “puzzle” it wishes to adopt, it may find that the imported regulatory element does not marry with the “host body” of regulation and this may compromise the integrity of the “host Act.”

A case in point was the introduction proportionate liability in Australia in the mid-1990s. Only two jurisdictions introduced proportionate liability with the vital complement of mandatory insurance in Australia. Yet the introduction of proportionate liability was supposed to be accompanied by mandatory insurance for all building practitioners. The net effect was that consumer protection was, in the eyes of certain critics, compromised in the States of Australia that neglected to introduce the full suite of holistic reforms. In other words, an important piece of the “holistic jigsaw puzzle” was considered by some to be left out.

Law reform is very challenging and can have a profound impact for the better when the policymakers get it right. Conversely, it can have an extremely deleterious and pernicious effect when policymakers get it wrong. The leaky building syndrome in NZ illustrates a sad state of affairs where they got it wrong; misery was visited upon a great many New Zealanders as a result of that debacle. It is axiomatic that the law reformer is burdened with immense responsibility in terms of getting it right.

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  1. Brett Bates

    The citation of the 'Leaky House' defects in NZ is a classic example of the desire to push new technologies which is a good and bad thing. The use of what is more technically referred to as an 'External Insulation & Finish System' EIFS as an external cladding that could simulate rendered masonry walls at a greatly reduced cost whilst providing a thermal efficient barrier were the positive points. Unfortunately, the jointing of panels particularly around window reveals with various amalgams of tape, setting compounds and acrylic renders had a tendency to failure with movement of the (usually) timber frame substrate. The leaks into and on to the frame went undetected so the deteriorating effects of dry rot set in. Most expanded polystyrene products used as cladding panel was never intended for this purpose. Interesting that the BCA does not EIFS as a compliant external cladding. It can of course be ratified as an alternate solution based on performance provisions. If you are a conservative builder however, you should be very wary of having to include its use in your statutory warranty obligations for any building works you perform. Which brings me to the legal question for Kim. If a client absolutely insisted on its use why can't we (builders) and I know we can't – get a disclaimer from the client, which passes in title to any future owners, that we wont warrant the performance of this (or other) suspect product/materials?

    • Nick Anderson

      In South Australia a residential builder can get relief from claims for breaches of statutory warranties under s32(7) of the BWCA which provides "in proceedings for breach of a statutory warranty, it is a defence for a defendant to prove that the deficiencies of which the plaintiff complains arose from instructions insisted on by the building owner contrary to the advice in writing of the defendant." There are similar provisions in other States' legislation (e.g. s18F of Homes Building Act NSW). The provisions of the Act make the relief available in respect of claims made by future owners. Note of caution – s32(7) of the Act provides a defence for proceedings of breach of statutory warranties and the defence is most unlikely to be available to defend claims based on other possible causes of action (contract, negligence, misrepresentation, ACL etc.) and there is a reasonable enough argument that the statutory defence would not be available to defend statutory warranty claims if the work done by the builder was obviously unsafe. If you are talking about commercial construction then (in SA) there are no statutory warranties and there is nothing to prohibit a builder from drafting a contract which includes disclaimers, indemnities or other limit on liabilities in respect of choice of materials and/or claims which might be made by future owners.

      This is not to be relied on as legal advice. You need to consult a lawyer who knows the legislation in the jurisdiction and who has all the relevant facts.

  2. Mick

    "I myself looked to the French-based liability concepts of “liabilitie decennial” 10-year liability capping when I headed up the team that developed the Australian National Model Building Act in the early 1990s."


    So were you responsible for our current system in Victoria.?