Construction: What’s hot for 2022?

The decorations are down, new year’s resolutions have been made, so what can we expect to see happening in the construction industry over the next 12 months?  There is a lot going on that we would like to discuss and it is of course difficult to predict with any degree of certainty what issues will take priority (particularly given the turmoil over the last couple of years) but here is our pick of the hot topics for the coming year:

Grenfell and Building Safety
The Grenfell Tower public inquiry which was tasked with investigating the adequacy of the Building Regulations, together with other legislation, guidance and industry practice relating to high-rise residential buildings, was initially suspended due to the COVID-19 pandemic but hearings have resumed and will continue into mid-2022.  Alongside this, the government introduced the Building Safety Bill to Parliament on 5 July 2021, which aims to put in place new and enhanced regulatory regimes for building safety and construction products and ensure that residents have a stronger voice in the system.  The Bill is currently in the report stage, having completed the committee stage in the House of Commons. However given the Bill’s size and complexity, the government does not anticipate it completing its passage through Parliament in less than nine months (that is, not before March 2022).  For further discussion on the Bill, please see our previous article here.  Further announcements are anticipated shortly from the Government for potential protection for leaseholders of buildings between 11m and 18m following on from the announcement made last week that major housebuilders (names/details yet to be stated) are going to be required to contribute to a fund for those leaseholders.  It will be interesting to see how this is going to be managed and achieved without any Government money.

Modern Methods of Construction (MMC) and digital technology
Despite having made relatively little headway to date, MMC looks to become more prevalent on UK construction sites in 2022.  This will be largely encouraged by:

1.       Government policies like the Construction Playbook;

2.       Widespread adoption of digital technologies such as building information modelling (BIM) – also not as frequently used as was originally hoped; and

3.       Potential environmental benefits (see further below).

JCT Contract Update
JCT has stated that it hopes to publish new editions of its contracts around May 2022.  The JCT says it wants to cater for recent market developments in its 2022 editions, with special reference to modern methods of construction (MMC). It is unclear whether that will result in a new form of contract or amendments to the existing forms.

Construction Products Regulations
The Construction Products Regulations 2022 were published in October 2021; however this is not expected to come into force until 12-18 months after the Building Safety Bill has received Royal Assent so we may not necessarily see any further progress this year.  The government also announced that it would establish a new National Regulator for Construction Products which will operate within the Office for Product Safety and Standards (OPSS) (see our previous article on this here).  The government published a factsheet with the Regulations which confirmed that the OPSS has begun to set up its construction products functions, is working with other regulators within the scope of the existing regime, and is building capacity so that it is ready to take on its full remit once legislation has come into effect.

Collateral warranties
In July 2021, the case of Toppan Holdings Ltd v Simply Construct (UK) LLP* held that a parties’ collateral warranty was not a construction contract and so there was no right to adjudicate the dispute (see our article on this here).  The appeal is due to be heard in the next few months, and will hopefully provide much-needed clarity on whether a collateral warranty is a construction contract for purposes of the Construction Act 1996, and to what extent timing of when the warranty is entered into has a bearing on this.

Climate Change
Following COP 26 being held in Glasgow from 31 October to 13 November 2021, and the UK’s increasingly ambitious environmental targets, together with the huge impact of construction on its net emissions, indicate we are likely to see climate change continue to rise up the industry’s agenda in 2022.  It is already reflected in the government’s infrastructure strategy, procurement policy and industry standards.  We are also starting to see contract drafting that parties may consider adopting to lessen the environmental impact of a construction or engineering project.  This is an area that we, as a team, are particularly passionate about and we are hopeful that further progress will be made this year.

We hope this is a happy and successful year for you all and look forward to working with you.  As always, please do not hesitate to get in touch if you need any support and assistance.

* Toppan Holdings Ltd v Simply Construct (UK) LLP [2021] EWHC 2110 (TCC)