Construction Professional

Managing the risks

of sustainable design An increase in claims over “green” buildings means construction professionals must protect themselves by clarifying contracts and defining roles, says loss adjuster Bob Paterson.

CONSTRUCTION PROFESSIONALS and their insurers have an interest in ensuring that the risks inherent in building are managed in the best way possible to prevent additional costs, delays to the project and contract disputes. But what happens when the project requires cutting-edge designs and new types of building materials? How can a construction professional manage the risks that come with untested products and methods? The industry is seeing an increase in claims arising out of “green” projects and sustainable designs, as clients and planners look for ever more efficient buildings. However, construction professionals need to find the right balance between embracing new technology and protecting themselves from unnecessary claims. Current Building Regulations place

statutory requirements on a designer and contractor to produce a building that is efficient in preventing excessive heat loss through the building fabric. However, the increasing demands for natural light and IT hardware can also put a greater demand on the cooling plant required in the building.

Increasingly, planning consents require buildings to achieve much more than the minimum statutory requirements, or to attract prospective tenants where sustainability is a key business goal. The most recognised measure of

sustainable design in the UK is the BREEAM rating, in which non-residential buildings can range from a “pass” through to an “excellent”, based on a wide range of criteria including energy and water use, the health and wellbeing of occupants, the environmental impact of construction materials and methods used, together with pollution, transport and waste issues.

Review all variations When using performance specifications on “green” projects, contracting professionals should carefully review all variations that are agreed (such as those arising out of a value engineering exercise) to ensure they are not going to affect the agreed performance of the building. Issues can arise with express contractual warranties and guarantees and for any building project it is imperative to avoid, if possible, agreeing to any such

Construction professionals need to find the right balance between embracing new technology and protecting themselves from unnecessary claims

warranties or guarantees, as professional indemnity policies exclude liability solely arising out of such an express contractual requirement. For sustainable buildings this is even more important, because when using relatively new techniques and materials it can be almost impossible to be sure that a warranty or guarantee can be fulfilled. For a project involving a sustainable design, the construction professional may have to use foresight when creating or agreeing to the terms of the contract or subcontract. This could include researching the local authority requirements to understand all of the steps and timing required to obtain a BREEAM certification, particularly if it forms part of the planning consent. Contractors should also make certain that

they are not guaranteeing the results of certification by third parties. Consider using

What do I need to know about ... The Energy Saving Opportunities Scheme?

The ESOS scheme requires organisations to conduct energy assessments of their buildings, processes and transportation methods in order to identify where improvements can be made. It applies to “large undertakings”, that is, those with more than 250 employees, or a turnover greater than €50m. Corporate groups qualify if at least one UK member meets the definition. ESOS came into force on 17 July in response

to the European Commission’s Energy Efficiency Directive, which requires all 28 member states to introduce energy audits for

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corporations. Its aim is to cut the EU’s energy consumption by 20% within four years. Businesses that qualify for ESOS, of which

there are about 9,000 in the UK, must carry out assessments every four years, and they must notify the Environment Agency (EA) that they have complied with their obligations. Public bodies and other organisations that

are required to comply with the Public Contracts Regulations 2006 are exempt. ESOS requires qualifying organisations to measure their total energy consumption, to

conduct audits to identify ways to cut it and report compliance to the EA by 5 December 2015, and do the same every four years. The audit must identify areas of “significant

consumption”, cover at least 90% of total energy use and include site visits. It must also state the estimated costs and benefits of implementing energy-saving measures. Although the audit is obligatory, there is no

requirement to implement the measures it identifies. Qualifying companies that fail to comply with ESOS or carry out audits can be