Building Safety – Reflections and Projections

Building safety continues to cast a long shadow, in relation to professional indemnity and property insurance in particular. In September 2024, the Grenfell Tower Inquiry released its Phase 2 Report with its wide-ranging criticisms and recommendations. Just a few days before its release, a large fire engulfed a block of flats in Dagenham which had a number of fire safety issues known to the London Fire Brigade, with remedial work to the building having been approved but not yet carried out. For a detailed review of the GTI Report and the implications on the construction, property and insurance sectors, you can obtain a copy of our Building Safety report here.

In the meantime, whilst there is a popular view that all possible cladding/fire safety notifications have now been made to insurers, we are aware of such notifications still being made. We are also still receiving new instructions in relation to matters historically notified to insurers and are seeing claims which have been intimated, but not progressed for some time now, coming back to life.

Policy coverage considerations remain live, and we are instructed by both primary and excess layer insurers on such issues, given the size of many of the claims in question. We also see claimants utilising the provisions of the Building Safety Act 2022, including (i) seeking Building Liability Orders (BLOs) from parent companies where coverage issues mean that there is a lack of insurance, and (ii) seeking to rely on extended limitation orders, particularly as the courts’ guidance on the Defective Premises Act 1972 continues to develop.

In terms of what is being done to change the landscape, we are delighted to see professional services companies approaching us to audit their businesses, and to provide recommendations for developing future resilience and exploring new opportunities which the changing landscape provides, often across group structures. Consistency, culture and change management are arguably as important as capability to enable businesses to adapt to the changes required, and a holistic approach to these four ‘C’s is crucial.

The government has launched its Remediation Action Plan (RAP), aimed at speeding up the identification and remediation of unsafe cladding on residential buildings of 11 metres or more in height. The RAP aims to identify all buildings with unsafe cladding, ensure that they are fixed faster, and support residents through the remediation process. The ultimate goal is that, by the end of 2029, all buildings 18 metres or taller with unsafe cladding in a government-funded scheme will have been remediated, and every building 11 metres or taller with unsafe cladding will either have been remediated, have a date for completion, or the landlord will be liable to "severe” penalties.

The world of building safety, therefore, developed significantly over 2024 and promises to evolve further in 2025. It will be interesting to see whether any of the ongoing litigation reaches the courts this year, and the effect of any decisions that might follow. In the meantime, those operating in the relevant sectors (businesses and their insurers) need to be proactive and a read of our detailed briefing note is a great place to start!

Richard Palmer