Building Safety Act 2022 imposes wide reaching obligations on directors and officers

The provisions for the liability of directors and officers

The BSA 2022 was granted Royal Assent on 28 April 2022 and on 1 October 2023 the provision below came into force (6 April 2024 for s.40 in Wales) relating to the liability of officers of a body corporate.

The BSA 2022 amendments to the Building Act 1984 ("the BA 1984"):

• 40 of the BSA 2022 provides for the liability of officers of a body corporate where that body corporate commits an offence under the BA 1984.

Under the BSA 2022 itself:

• 161 of the BSA 2022 provides for the liability of officers of a body corporate where that body corporate commits an offence under Part 2 or Part 4, which relates to higher risk buildings, of the BSA 2022.

Examples of the offences

Under s. 39 of the BA 1984 there is the, potentially very wide, offence of contravening a provision of building regulations.

In regard to the offences under the BSA 2022, these include:

Under Part 2 -

• Intentionally obstructing a person who is an authorised officer exercising a relevant building function (s.23)
• Providing false or misleading information to the Building Safety Regulator (s. 24)

Under Part 4, for a higher risk building -

A higher risk building is one that is at least 18 metres in height or at least 7 storeys, and contains at least 2 residential units. Following the Grenfell tragedy there is a specific focus in the BSA 2022 on requirements aimed at making these buildings safer. For this reason, there is a range of onerous duties under Part 4 and potential offences, including:

• Contravening a compliance notice given by the regulator for a higher-risk building (s.99)
• Contravening requirements that give rise to risk of death and serious injury (s.101)
• Breaching the various requirements for registration and certification of higher risk buildings (s.76-82)
• Breaching the requirements to assess and manage building safety risks for higher risk buildings ( s.83 and 84)
• Failing to comply with the various requirements to report and maintain information and documents for higher risk buildings ( s.87-90)

Triggers for liability of an officer of a body corporate

An officer will be found to have committed an offence under s.40 or s.161 if the offence was committed by the body corporate:

1. With the officer’s consent or connivance
2. Attributable to the neglect of the officer

These terms are not defined in the BSA 2022 and currently no case law has considered the meaning of the terms in the context of the BSA 2022 or BA 1984. However an understanding can be gained from the case law on the Health and Safety at Work Act 1974 which uses the same triggers for personal liability.

By way of a summary:

'Consent' is generally found where an officer knows the relevant facts and has agreed to the course of action, potentially only by inference (R v Chargot Limited (t/a Contract Services) and others (Appellants) [2008] UKHL 73).

'Connivance' is essentially 'turning a blind eye' or "not actively encouraging what happens but letting it continue and saying nothing about it" (Huckerby v Elliott [1970] 1 All ER 189).

In regards to 'neglect', where there was no actual knowledge of a permanent fact, the question was should the officer, by reason of the surrounding circumstances, be put on enquiry to require him to check that relevant procedures were in place. The Court would then take into account factors such as whether the officer knew or ought to have known the reasonable steps to take to comply with their duty (R v P [2007] EWCA Crim 1937).

Who is an officer?

For the purposes of s.161 BSA 2022 and s.40 BA 1984, the officers with potential liability includes:

• Any director, manager, secretary or other similar officer of the body corporate, or any person who was purporting to act in any such capacity
• A partner of a partnership
• Members or members of the governing body of an unincorporated body
• Directors of a resident management company, right to manage company, or commonhold association, unless, insofar as Part 4 of BSA 2022, such directors are not entitled to renumeration and a renumerated director appointed for building safety purposes

A 'director' is defined as a member of the body corporate.

The terms 'manager' and 'other similar officer' are not defined.

Given the wording and lack of definition for 'manager' and 'other similar officer', there is clearly the potential for a very wide interpretation of who may commit an offence under these sections and this may include individuals that would not usually be considered 'directors or officers'.

What are the consequences

The potential consequence for an officer found liable for an offence under the BSA 2022 or BA 1984 are significant, including a criminal prosecution that may result in:

• An unlimited fine
• Imprisonment for up to 2 years
• Reputation damage and possible regulatory sanctions arising from the criminal prosecution

Considerations for D&O insurers

Given the potential scope of individual liability under the BSA 2022 and the creation of a Building Safety Regulator with wide powers to bring claims, especially in respect to higher risk buildings, those at risk of holding duties under the BSA 2022 would be well advised to maintain robust records, obtain legal advice on compliance where necessary, and ensure they have appropriate insurance in place.

We highlight below some relevant points that insurers of Director and Officers policies may wish to keep in mind:

• The BSA 2022 provides potential claimants with mechanisms in Building Liability Orders and Remediation Contribution Orders to pierce the corporate veil and hold associated companies jointly and severally liable for defects resulting from a building safety risk where this is deemed "just and equitable" by the court. This has the potential to expose directors within the wider group of companies to claims relating to the actions of, for example a Special Purpose Vehicle set up specifically for a project.
• The interpretation of the BSA 2022 is a fast moving area of law in which specialist legal advice is required. 'Associated companies' has been defined widely. Additionally the Court has a broad discretion on what is deemed "just and equitable", evident in the recent Vista Tower¹ decision in which this firm acted for the successful party, Grey GR LP. You can learn more about this case here.
• Claims under the BSA 2022 may give rise to fines that might not be covered in a usual D&O policy wording.
• The range of individuals which may be exposed to liability as officers of a body corporate is potentially very wide and therefore some of these individuals may fall outside of standard definitions of who may be covered as a 'director or officer'.

[1] Edgewater (Stevenage) Limited and Others v Grey GR Limited Partnership [2026] UKUT 18 (LC)