Construction & Real Estate

Recent years have brought a host of challenges for the construction industry but what we expect for 2023?

Building Safety

Building safety will continue to be the most significant issue affecting the construction sector, with several developments expected for 2023.

• The remainder of the provisions of the Building Safety Act 2022 (BSA) are expected to come into force. This will include secondary legislation covering the definition of higher risk buildings, the new gateway regime, new duty holder obligations and the golden thread of information and construction projects.
• Phase two of the Grenfell Tower inquiry closed in November 2022 and its report is expected in late 2023. However, no fixed timeline has been set and the 300,000 documents disclosed to the inquiry will need to be considered.
• The extended limitation periods of up to 30 years introduced by the BSA may permit previously abandoned claims to be resurrected. It remains to be seen how these will address the practical difficulties of pursuing a claim long after the events in question, including the unavailability of witnesses and documents being routinely destroyed in the intervening period.
• More cladding related claims are expected in the courts, following last year’s judgment in Martlet Homes Ltd v Mulalley & Co Ltd, which saw the first successful claim to recover the cost of replacing dangerous cladding.

Economy and insolvencies

We enter the year facing challenging economic headwinds. Inflation continues to run at levels not experienced for 40 years and is coupled with labour and material shortages and increasing interest rates. Construction accounted of 18% of all UK insolvencies in 2022 and the trend looks set to continue in 2023.

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