The construction industry in New South Wales has seen major reforms in recent years. Central to these is the introduction of the Design and Building Practitioners Act 2020 (NSW) (DBP Act). Brought into force in 2020, the legislation was created to address long-standing concerns about defective buildings, gaps in accountability, and a lack of confidence in the industry.
For principals, head contractors and subcontractors, the DBP Act is more than just another regulatory hurdle. It regulates who can do certain types of work, requires compliance declarations, introduces a registration scheme, and imposes a statutory duty of care that cannot be delegated or signed away.
What is the DBP Act?
The DBP Act is a piece of legislation which places obligations on both building and design practitioners. It places obligations on practitioners but also gives regulators powers to monitor and enforce those requirements.
The law’s objective is to restore public confidence in the industry by ensuring that buildings in NSW meet proper standards. It requires practitioners not only to hold appropriate qualifications but also to stand behind their work formally through declarations and, importantly, through a statutory duty of care.
The courts have described the DBP Act as complex and at times confusing, although as more cases have made it to the courts, we are starting to gain a better understanding of the intricacies of this legislation. However unhelpfully, there are still areas of the DBP Act that remain unclear.
Why Was the Act Introduced?
Central to understanding the DBP Act is considering why the legislation was introduced.
Widely publicised and devastating building failures such as the Lacrosse and Grenfell building fires in Melbourne and London and the failures in Sydney’s Opal and Mascot Towers, shook public confidence in the building industry.
Combined with this, seminal cases such as Brookfield Multiplex and those applying its principles, exposed critical legal gaps in protection for subsequent building owners against significant construction failures.
The DBP Act was proposed as the solution to these issues.
With admirable intentions, the DBP Act came into force but for those in the industry, the introduction of the DBP Act also brought with it a series of new hurdles for design and building practitioners to deal with.
Who Does it Apply To?
Most of the obligations under the Act apply to a defined group of people and projects.
The DBP Act, through its definition of “building work”, covers only certain classes of building work. At present, the Act applies to Class 2 buildings (apartments), Class 3 buildings (boarding houses, hostels and similar), and Class 9c buildings (aged care facilities) – essentially any building where people live.
Notably, the Act does not just apply to head contractors, but to everyone involved in the construction of these classes of building. Therefore, head contractors, subcontractors, architects, engineers and others involved in the design or construction of a Class 2, 3 or 9C building have obligations under the legislation.
Having said this, a current point of uncertainty within the legislation is the breadth of the application of the duty of care imposed by Part 4 of the DBP Act. Recent case law has suggested that the duty of care imposed by the DBP Act potentially applies to a broader class of design and building practitioners and not only those involved in works for Class 2, 3 or 9C buildings.
Therefore, when it comes to compliance in the NSW industry, the duty of care which the DBP Act imposes, is potentially relevant to all.
Compliance Obligations
A large portion of the DBP Act is centered around compliance. In short:
- there are registration requirements. Practitioners who fall into the set categories defined by the Act must be registered;
- there are requirements to provide compliance declarations. Design practitioners preparing a “regulated design” must declare that the design complies with the Building Code of Australia; and
- there are restrictions on unqualified work. Professional engineering work can only be carried out by registered professional engineers, and specialist work only by registered specialist practitioners.
For principals and contractors, the practical outcome is that you must check the registration of the people you engage, ensure that designs and declarations are in place and be prepared to issue your own compliance declaration at the end of the project. For subcontractors and consultants, it means obtaining and maintaining the proper registration and being ready to sign off on your work.
The Statutory Duty of Care
The most notable reform in the DBP Act is the statutory duty of care. Part 4 of the Act provides that any person carrying out construction work owes a duty to exercise reasonable care to avoid economic loss caused by defects. This duty is owed to the current owner and to subsequent owners.
“Construction work” is defined broadly in Part 4 of the Act (leading to some of the uncertainty we mentioned above). It includes not only building work but also preparing designs, manufacturing or supplying building products, and supervising or managing building work. The duty therefore applies to builders, subcontractors, architects, engineers, project managers and others with control over construction activities.
The duty cannot be delegated. If you owe it, you cannot escape responsibility by passing work to someone else. A head contractor, for example, remains liable even if a defect was caused by a subcontractor. Nor can the duty be contracted out of. Any agreement that attempts to exclude it has no effect.
A unique feature of this duty is that it applies retrospectively. It extends to defects that became apparent in the ten years before the duty commenced in June 2020 (subject to certain other limitation periods imposed by other pieces of legislation). That means owners of buildings where defects appeared as far back as 2010 can potentially bring claims under the Act. This retrospective element was designed to give relief to owners of relatively new buildings where defects had already emerged.
The consequences of this duty are significant. It gives owners a clear statutory right of action against those responsible for defective work. It also places individuals at risk of personal liability, particularly those who had substantive control over construction or design.
Conclusion
The DBP Act represents a fundamental shift in the way the NSW construction industry is regulated.
It was introduced in response to both high-profile failures and gaps in legal protection, and it now requires registration, compliance declarations and adherence to a statutory duty of care.
For principals, head contractors and subcontractors, the Act means heightened responsibility.
While there are a host of new formal obligations placed on design and building practitioners, provided you are complying with the Building Code of Australia, undertaking due diligence when engaging subcontractors and consultants, and can stand behind the work you undertake – DBP Act compliance should come fairly naturally.
