The DBP Act introduces a statutory duty of care that is non-delegable, retrospective, and applies across all building types and participants, including individual employees and directors. This duty covers construction work performed up to 10 years before the act commenced, meaning work undertaken from mid-2010 may be subject to its provisions if damage is discovered after 2020. Consequently, directors, officers, and practitioners who have since retired, sold their interest, or moved to other roles could still be held liable.
Unlike other elements of the DBP framework, such as compliance declarations tied to specific building classes, the duty of care is universal in scope. It applies across all building classes and encompasses the full range of construction activities, including design, supervision, project management, and the supply or manufacture of building products.
The Pafburn case further solidifies this framework by confirming that breaches of the DBP statutory duty of care result in non-delegable, vicarious-style liability. This means developers and head contractors can no longer rely on NSW's proportionate liability regime to limit their exposure on DBP Act claims by pointing to the conduct of subcontractors.
In light of these legal changes, Gallagher advises developers, head contractors, and other project participants to reassess their risk frameworks and insurance arrangements. Key considerations include:
- Tightening the agreed scope of works.
- Reevaluating contract terms with subcontractors.
- Considering requirements for minimum PI limits.
- Expressly contracting out of proportionate liability where appropriate.
Additionally, a closer examination of PI programs is recommended, focusing on:
- Limits, deductibles, and retroactive dates.
- The breadth of "professional services" definitions.
- Whether DBP Act exposures are clearly contemplated.
- How employees, directors, and related entities are treated under the policy.
For builders and construction professionals in NSW, staying informed about these legal developments and proactively adjusting insurance and risk management strategies is crucial to ensure compliance and protect against potential liabilities.
