Well here we are! The Design and Building Practitioners Act 2020 (NSW) and the Design & Building Practitioners Regulations 2021 (NSW) along with the Design and Building Practitioners Amendment (Miscellaneous) Regulation 2022 (NSW) (collectively the “DBP Act”) are no longer the new kids on the block for architects and engineers in the construction industry. However, that does not mean that it is by any means clear and fully established and understood. The DBP Act is still very much an infant in the legislative and construction world, with many of its kinks slowly, but surely being teased out by Government and courts as the practical implications of the legislation unfold (and no doubt many more to follow).

One example of clarification concerns duty of care. From 11 June 2020, design consultants owe a 10 year retrospective duty of care to each owner of the land and any subsequent owner of the land to “exercise reasonable care to avoid economic loss caused by defects” in or related to a building where the work is done and arising from construction work. The statutory duty of care obligation goes beyond certain classes of buildings to many other sorts of buildings. The broad definition of ‘Buildings’ as defined in the Environmental Planning and Assessment Act 1979 (NSW) is not limited to residential dwellings or apartments. The statutory duty of care obligation is also separate from the remaining obligations under the Act.

Another example of the application and clarification of the DBP Act, concerns requirements including registration of design practitioners, regulated designs and the Design Compliance Declaration scheme which now extend to class 2, 3 and 9(c) buildings (typically multi-unit residential buildings where people live above and below each other, and have special rules to protect the health, safety and welfare of all occupants including student accommodation and retirement homes as two examples).

But the DBP Act is a moving beast. One legislative reform on the horizon is the Practice Standard for Professional Engineers – compliance of which will be a mandatory condition of Professional Engineer registration from September 2024 under the DBP Act. Failure to comply with the Practice Standard may lead to enforcement action and penalties (including the cancellation of the engineer’s registration). The Practice Standard is a condition of registration and applies to all Professional Engineers registered under the DBP Act including:

• Civil engineering;
• Electrical engineering;
• Fire safety engineering;
• Geotechnical engineering;
• Mechanical engineering; and
• Structural engineering.

Importantly, the Professional Engineer must ensure that they carry out professional engineering work in compliance with the “fit for purpose” criteria as set out in the Practice Standard, enforceable by the Building Regulator. The criteria to be complied with includes that:

• the Professional Engineer must have a contract of engagement that incorporates a Design Brief; and
• that the professional engineering work carried out must:
  • comply with all applicable legislative requirements and in accordance with the NCC; and
  • be within the engineer’s area of competency; and
• the Professional Engineer must take all reasonable steps to:
  • coordinate with the other designers working on a project to deliver the project; and
  • provide guidance to the building practitioner as appropriate, on how to implement the professional engineering work.

But this is not the only obligation. Under the Practice Standard, inspections of professional engineering work must be carried out by a Professional Engineer (or an engineer under the direct supervision of a Professional Engineer) in accordance with the inspection schedule set out in the design brief and/or engagement agreement.  The Practice Standard sets out the requirement that where the Professional Engineer is preparing designs or reports that will be used in building reports, they must make recommendations concerning final work and those recommendations should indicate the appropriate number of on site inspections by the Professional Engineer, including crucial points where and when work should not progress without an on site inspection by the Professional Engineer. More specifically, “…to the extent that it is within their area of expertise…” when undertaking an on site inspection the Professional Engineer must:

• detect observable non-compliance issues;
• determine whether the building work is built in accordance with the NCC and relevant standards, plans and specifications of the engineering design;
• provide a recommendation to the certifier, where appropriate, of any observed compliance issues; and
• abide by all site work, health and safety requirements.

It will be important for Professional Engineers from September 2024, to be firmly familiar with the Practice Standards, obtain a clear and precise brief and consultancy agreement with the client setting out the appropriate on site visits required (and pricing associated with the same) and allowing for appropriate timeframes and EOT rights in which to perform Professional Engineering services on the project. The Practice Standard for Professional Engineers can be downloaded from the NSW Fair trading website.

In our next Webinar, Industry Update – What’s new for you? (NSW focus), Clyde & Co lawyers will delve more into the criteria for Professional Engineers within the Practice Standards, as well as the recent caselaw around proportionate liability and its interaction with the DBP Act. The webinar will be rounded out by discussing other changes to legislation in NSW within the construction industry including the Building Legislation Amendment Bill 2023 as well as considering unfair contracts legislation and how it applies to your practice, in particular, around tenders.

Felicity Dixon
Senior Risk Manager

This article is only general advice in respect of risk management. It is not tailored to your individual needs or those of your business, nor is it intended to be relied upon as legal or insurance advice. For such assistance you should approach your legal and/or insurance advisors.