Snapshot
- The approaching deadline for building practitioners to obtain insurance under the Design and Building Practitioners Act 2020 exposes a significant gap between the Act’s compliance obligations and available market products.
- Following the High Court decision in Pafburn, the proportionate liability regime does not apply to claims for breach of the statutory duty of care under s 37, increasing the importance of cross-claims.
- Recent decisions highlight that the success of cross-claims remains highly fact-dependent and may be constrained by insolvency and the availability of responsive insurance.
The construction industry has had its fair share of challenges over the years, including rising material costs, labour shortages, evolving regulations, builder insolvencies and a significant uptick in defects litigation.
Following a number of high-profile construction failures (namely the Opal and Mascot Towers), the NSW Government introduced the Design and Building Practitioners Act 2020 (NSW) (‘DBP Act’), the purpose of which was to address systemic quality failures and accountability gaps in the NSW construction industry.
For example, the DBP Act:
- imposes a non‑delegable statutory duty of care on design and building practitioners;
- requires fully compliant designs for key building elements;
- mandates compliance declarations backed by professional accountability; and
- enables early regulatory intervention.
