CIAT: 0:03

Welcome to Where it's AT the podcast from CIAT, which uses technology to talk technology for technologists, Whether you're a designer, engineer, contractor or consultant, professional indemnity insurance is a key component of protecting your business against claims of intelligence errors or omissions in the services you provide. But as the construction industry continues to evolve with new technologies, rising risks and complex regulations, the landscape of insurance is shifting too. So how are insurers adapting to these changes, and what do construction professionals need to know to ensure they're properly covered. Today, we're joined by Harry Pangli FCIAT, Chartered Architectural Technologist, and Darren Hewitt, Director Claims and Risk Management at MFL Insurance Group Limited who administer CIAT Insurance Services. They'll be answering questions from members to explore how professional indemnity insurance plays a critical role in protecting members.

Harry Pangli FCIAT: 1:06

Welcome Darren. Today, we'll be discussing the impact of professional indemnity insurance on Chartered Members, in relation to the recent changes in legislation. But before we begin, I am Harry Pangli, a Chartered Member of the Chartered Institute of Architectural Technologists and also a member of the CIAT Liability Panel. As a chartered member myself, we often want to ask questions to insurers to understand and navigate the very complex environment in terms of the Building Safety Act. It would be good for me and the listeners to understand more about your role at MFL Insurance Group Limited and whether you can actually tell us a bit more about yourself.

Darren Hewitt MFL: 1:45

Thank you for having me. My role - I am the Director of the Claims Risk Management Department at MFL Insurance Group. I deal with claims risk management questions; contractual questions. Basically help the chartered members navigate the potentially choppy waters of their insurance policies and their liabilities arising out of their work. We're here to lend a hand in whatever way we can, in terms of helping them address any sort of issues that arise, and advising as and where we can. Obviously, MFL, as a company in and of itself, have been helping CIAT members for, well, over 25 years now. Again, to try and place the best policy to help them cover the various liabilities arising out of their particular niche within the construction industry.

Harry Pangli FCIAT: 2:27

I'm sure recently, they've been so many changes that it's probably got you receiving a lot more questions and queries from chartered members about their insurance and how they navigate the recent changes, especially with the Building Safety Act - which came into force on the 28th of June, 2022. What should members be currently aware of in terms of professional indemnity insurance and the typical exclusions that apply, when they're now dealing with the current landscape?

Darren Hewitt MFL: 2:55

Well, the main question we're - sort of - getting presently is, obviously, as you'd expect, around the Principal Designer role, and for the sake of repeating myself ad nauseum, I'm going to refer to that as PD, from now on, because repeating Principal Designer over and over and over again will eventually drive us all a bit mad. One of the questions down to that role, or what impact that role has as to whether or not the charteredmembers are insured to undertake that role. Because, again, it is a fairly significant shift in how some aspects of some of the work has been done traditionally. Not in terms of the work itself, because the work itself, isn't that far outside what we'd expect charteredmembers to be doing in any event. But the sort of requirements imposed by the Building Safety Act have made it a lot more stringent, a lot more evidence based thanwas previously the case. Those are the sort of major questions we get at present. And the thing to note about that is the Policy doesn't prevent them from doing PD work. There's no exclusion saying that a chartered member cannot do PD work at all, So they're insured for it, that's the main sort of message that we've got going out presently.which is, yes, you can do that kind of work, but more questions are going to be asked about that kind of work. Because it is new, there are new stringent requirements to it. It's not just the data that you were doing in the same manner. It is different. So there are no new exclusions in that regard.

Harry Pangli FCIAT: 4:15

Okay, so in your view, you feel that there is a technical difference in what the new principal designer role under Building Regulations requires of a chartered member -

Darren Hewitt MFL: 4:26

Yes and no. So the basic parts of the work itself, which is - you know - is monitoring the project, take the design, signing off on things, those are the day to day activities we expect from chartered members. But obviously there's oversight requirements, competency requirements, and additional bits and pieces that the Building Safety Act now builds into some of that role, that weren't there traditionally. So it's not that it's that far outside, it's just the onus on parts of it have shifted, and it's making sure, from an insurance company perspective - which we aren't, which we should clarify - the insurance company is going to pay a lot more attention to making sure that anybody undertaking that kind of work, has the background knowledge and experience to do that kind of work.

Harry Pangli FCIAT: 5:08

So, from my perspective as a designer, I don't see my day to day activities in designing to meet the Building Regulations changing with this this new role. But I do understand there's lots of processes and procedures now attached to it, which then makes me worried as a chartered member, whether I'm now taking on additional liability.

Darren Hewitt MFL: 5:31

The problem with any new role, or the development of any new role, is what the role is today, or what we understand about it today, is not where it's going to be tomorrow. Because as the legislation changes, the general use of the role changes, ultimately, the first claims arise out of the role, and the first sort of court cases that deal with the interpretation of the legislation, the secondary legislation, alter people's understanding or perception of it. And ultimately down to the involvement of the HSC (Health and Safety Executive) as a regulator, and what they intend, or what the role they ultimately have, will ultimately change all of this. Currently, because it's so brand new, it's a movable feast in terms of what it's ultimately going to be in the grand scheme of things. So, there are new potential liabilities arising out of the role than anybody - you can't really suggest otherwise - because of this new requirement to be able to demonstrate you have all the proper procedures in place. That is a new aspect that a lot of chartered members and a lot of people across the construction industry as a whole, are going to have to get to grips with - in terms of - yes, we all understand that you are capable of doing the job, but are you actually producing enough in terms of policy, procedure and documentation to now prove you can do the job. And that may be where some firms fall down.

Harry Pangli FCIAT: 6:50

I suppose there's - in my view - little guidance on the type of information that would be acceptable to demonstrate this, and I think it is quite loose in that regard. So whilst - let's say - certain other institutions may have guidance, I think us as an institution, we also have guidance out there. What from the insurance position would you expect members to demonstrate if they were undertaking this role going forwards? Would you require further information?

Darren Hewitt MFL: 7:23

Further information is going to be required. Again presently, as insurers themselves ultimately get to grips with what their understanding of the role is, what information they require isn't going to change. So, whatever they ask today again, may not be the same question they ask a couple of weeks from now. The general position we accept is that chartered members have the skills and knowledge to comply with PAS8671, and there's no such suggestion that chartered members aren't going to meet that standard - which is the sort of basic point we're beginning with. But while we accept that sort of - tacitly insurers are also going to need some comfort that - you know - they fully understand what the requirements of the Building Safety Act are. That they've got policies and procedures in place to deal with the sort of administrative aspects of the principal designer role. That they can demonstrate their competency. They can tick the boxes in terms of what the role requires of them. And it's what information they can provide to us and to insurers to satisfy those requirements. CIAT have their PD Register, and obviously, given we're aware of- you know - the requirements to join that, and the fact you have to submit work for review, and it all gets peer reviewed and accepted. That goes some way to - sort of - helping tick that box. But there may still be further questions that get asked, because it ultimately it would depend upon the type of project any particular chartered member is doing. So it's never going to be a one size fits all.

Harry Pangli FCIAT: 8:51

So, being on a register that does certainly help when insurance premiums are coming to renewals, and you now understand that that practice or that member is now wanting to undertake the principal designer role under Building Regulations.

Darren Hewitt MFL: 9:07

It's not necessarily going to have an impact on the premium, per se, because we generally ensure that the scheme is is competitive compared to similar products in the insurance industry. What it will - sort of - help to do, is limit some of the questions, not all, but some of the questions the insurers may ask. Because again, if they've gone through the process of getting onto the register, then they've demonstrated skills knowledge, and they have produced evidence to a panel that have confirmed that they have the requisite knowledge skills and background to do the work. So it may shorten how many questions get asked of them, in terms of doing that role going forward.

Harry Pangli FCIAT: 9:45

So not to put you on the spot, Darren, but what type of questions could we expect? Sounds like I have put you on the spot -

Darren Hewitt MFL: 9:53

Well, it's a good question. Again, it's as the role develops, there are still no hard and fast list from insurers in terms of they've said to us, you must answer question ABC. So it'll change depending on the practice. Depending on what the firm is doing. But it is a case of what additional training, if any, have you undertaken to understand the requirements under the Building Safety Acts? What policies and procedures are you putting in place, or will put in place, in terms of ensuring you're ready to undertake that activity. Are you ensuring you've got continuing professional development to make sure you're up to date with any subsequent changes? So basically, down to demonstrating do you know what is actually being asked of you. What have you put in place to make sure you can comply with whats asked of you. And - you know - how are you demonstrating that you're going to keep on top of it all.

Harry Pangli FCIAT: 10:45

For a principal designer carrying out the Building Regulations role - and I'll probably keep clarifying this, because we do obviously have the two titles of principal designer as you quite helpfully - sort of - mentioned before you got into this. There may be a requirement, or there may be - I suppose - members may feel that they need to get additional input from consultants from different disciplines. What would your view be on sub consultant appointments when chartered members aren't taking the PD role, to assist them with the compliance element of the principal designer role.

Darren Hewitt MFL: 11:21

I think it's probably not case of if, and probably more case of when members may have to take on certain sub consultants. Because, again, despite the wealth of experience knowledge that chartered members have, they won't be able to tick all of the boxes, because there'll be some aspects that are a lot more technical and fall slightly outside of their knowledge and remit. I think we all accept that. Appointments with sub consultants are always potentially risky in terms of whilst sub consultants are being appointed, what are they being appointed to do, more importantly, how they're being appointed. The problem, from the insurance perspective can arise is, depending how it's been done, if the chartered member is the one who has instructed the sub consultant,there's no contractural relationship between the sub consultant and the client. If something the sub consultant does is wrong, the client can only make a claim against a chartered member. Now, that's fine, because ultimately it should be a claim between the chartered member and the sub consultant, but the - sort of - issue can be can arise is if the activities of the sub consultant fall outside the expected activities of the chartered member. So from a sort of strictly technical point of view, that activity isn't insured by that policy. Leaving the member potentially faced with something that insurers might not be able to assist with. I'm thinking more in terms of fire engineering on on buildings above 11 meters. So, if they've appointed a fire, fire consultant, and it's above 11 meters, as the policy doesn't- current policy - doesn't currently cover that that kind of activity, the policy may not be able to to assist the chartered member in that instance.

Harry Pangli FCIAT: 12:59

Yeah. I mean, that's, that's a very good example, because as designers, we are - sort of - let's say . .. go back to SMEs, designing loft conversions. You know, we often, generally get involved in designing the means of escape from a third floor, because as we go over a certain level, there's additional requirements needed. And so that puts a member in a bit of a tricky position, especially if they have exclusions in their their policy where they're not covered to get involved in anything fire related. So that could mean simply designing a specification for a fire rated partition, or stating an FD20 fire door for the means of escape. How do members navigate this, without actually having to get a sub consultant on board? Because it does really put a lot of costs, then back onto the client unnecessarily for having additional consultants, when members were able to carry out this function.

Darren Hewitt MFL: 13:57

Again, important to distinguish between projects that are below 11 meters, in which case the cover is there and there's no particular issue. And projects above 11 meters, which is where currently restrictions are in place. As you'll probably however appreciate, we have ongoing discussions negotiations with insurers in terms of what cover is available, can be available given - you know- the nature to clients, general insurance markets. So those are ongoing conversations we always have, and obviously, where we can improve our role to what the cover is we will, But obviously fire is always, has been for quite some time now, quite a pointy issue from an insurance perspective. It's a case of, from our perspective, you're looking when we're going above 11 meters, and the cover is not there. Obviously your designs have to include provision for the fire positions, the fire breaks, the means of escape. Again, there's no sort of qualms on that score, from an insurance perspective, it's a case of stating that, yes, this project needs that, and you must put something in place that complies with this regulation. When it comes down to specifying what and how it's installed, that's something ideally you want to try and leave to the contractor or a fire engineer, because that can then be their responsibility in their role.

Harry Pangli FCIAT: 15:10

Yeah, there is a slight overlap then in the design, because I suppose with an architecture technologist designing partitions, they would then do a partition schedule. But they would have to then leave a gap with anything to do with fire rated partitions. Because generally, a fire engineer probably wouldn't get into designing partitions that aren't fire rated. So that makes the coordination of the design tricky.

Darren Hewitt MFL: 15:36

Yeah, I can't disagree with that as we move forward, because again, it touches back into - to a degree- the principal designer role, and how everything now needs to be coordinated in a much more rigid and formal fashion. That's probably something a lot of the chartered members are going to have to start doing more of anyway. But yeah, we accept that it does create this slight sort of disconnect, but it is a case of ultimately trying to ensure from- or protecting members from- the potentially accepting of liability for something they shouldn't be liable for, and ensuring that it's that - sort of - responsibility rests with somebody who, as a fire engineering level, - should be - is better placed then to specify what that should be to comply with that. If that made any sense.

Harry Pangli FCIAT: 16:15

Yeah, completely. Now, I mean, the landscape when it comes to health and safety on buildings is massively changing. As we've seen, the Building Safety Act has not just introduced the principal designer role, it is now introduced or amended certain acts, such as the Defective Premises Act, where now the limitation period has extended from 6 years to 15 for any claim after the 28th of June 2022

Darren Hewitt MFL: 16:50

Yep-

Harry Pangli FCIAT: 16:50

and more shockingly, there is a retrospective, 30 year limitation period for claims before 28th June 2022. So, in terms of the extended liability periods that affect the professional indemnity cover for chartered members and those members who want to obtain cover, what is your your view and where does the insurance market stand?

Darren Hewitt MFL: 17:07

Firstly, bearing in mind that professional indemnity insurance is only ever an annual renewing policy. Only in force for the year it's in place. So all it means for any firm that's still trading, it doesn't really have much impact at all, because if you're still trading, you're maintaining the cover in any event. The issue more arises when firms looking to cease trading and members are retiring, and where the liabilities fall then. And that's going to have a much greater impact on those firms because again, whereas historically, what we refer to as runoff policy - which is a policy specifically to cover the sort of tailing off of the liabilities as time passes from the ceasing of your business - that tail is now dramatically extended. Which means, rather than in the old days, you take out a runoff policy for probably 6 years, and that would be enough. Now that probably isn't enough, given where those liabilities lie. Now in reality and I think with any new project, in any event, given that the Defective Premises Act is tied to "property has to be unfit for habitation" there are probably very limited circumstances where it's going to take somebody 15 years to realize they can't actually live in a thing. At least you'd hope so anyway. The sort of impetus for that, and very clearly, more, relates to the cladding issues on high rise buildings than just a general concept across the construction industry as a whole. But again, legislation being what it is, and much more broad brush, it's tackled everybody, and we're all suffering with it.

Harry Pangli FCIAT: 18:35

Yeah, I mean, a property not being fit for habitation, as we both know is sort of a legal definition that keeps on evolving as case law is developed. And it at the moment, is quite wide and far reaching, for when one would think a property is unfit for habitation, but in terms of waiting 15 years to understand that, I suppose that there are still elements of defects, such as fire related defects and structure, which possibly would be established 10 years down the line.

Darren Hewitt MFL: 19:08

In one regard, the shift in the Defective Premises Act is a significant thing. And on the other hand, possibly not quite as unprecedented as people might think. The 30 years bit, most definitely is there's no argument about that, but the 15 years is a more codified version of the already existing timescales. So sort of put into its context, it said, normally, liability can be 6 years - and all of this is set out in the Limitation Act of 1980 and the Latent Defect Act of 1986 - he says, hoping he got both those numbers right. So, under the Limitation Act, just generally speaking, claims can be brought 6 years after the the what they call the cause of action, which in most construction projects, is basically to consider the date of practical completion. So, 6 years from when the jobs finished is when a claim could normally be brought. But that date shifts. There are a number of reasons why that date becomes quite significantly longer. So from a contractual basis, if the chartered members' undertaken the work under a contract executed by a Deed, there's a 12 year liability period in any event. And even if it's not and it's still a contract under hand, which is a 6 year period - and that would also be the same for any claims under Tort, so any negligent claims - the Latent Defect Act allows them to bring a claim within 3 years of whether they could reasonably be aware they have the right to bring a claim, up to what they call the long stop, which is 15 years. So, the 15 years isn't necessarily a new thing, they've just made it easier because a claimant now no longer has to demonstrate when their knowledge first came up, just that the defect exists.

Harry Pangli FCIAT: 20:56

So, the 30 year limitation period retrospective is now becomes-

Darren Hewitt MFL: 21:00

that's unclarified-

Harry Pangli FCIAT: 21:00

yeah, it's, it's, it's quite a - as as a designer it worries me somewhat. It worries me, not that I've made a mistake, but it worries me that in any claim, a party could be dragged in to defend themselves. And I wonder if I go back 30 years, if I was to close down my business, would my professional indemnity cover, would be able to cover me for that?

Darren Hewitt MFL: 21:25

As long as the policy, or a policy is kept in force, yes. Because, again, it's claim made. So where claims made is - to clarify the terminology - that is the policy in force at the time the claim is brought against you, not when the work was done that's relevant. So as long as a policy is in place, a claim is covered.

Harry Pangli FCIAT: 21:46

So after - give you a scenario - so let's say I had run off cover for 6 years, and after the 6 year period, I don't have to worry about any claims being bought against me.

Darren Hewitt MFL: 22:00

Not strictly true. Claims can still be brought after the 6 year period-

Harry Pangli FCIAT: 22:03

Yeah-

Darren Hewitt MFL: 22:04

But what we generally tend to find with runoff is most chartered members, is in getting towards deciding they're going to cease trading. Is the types of work they start to do starts to tail off in the years proceeding. So they'll finish jobs off, but they won't really necessarily take new jobs on, and they'll be sort of dabbling in little bits and pieces, little application here and systems there, rather than the full on job. So when the time you get to the decision to finally cease trading, the run off goes into play. Their fees are much lower because the work's much lower, and it's not there's not as much potentially to go wrong, theoretically. Obviously, now that window has been extended, but as I said the window, there was always arguments for the window to be the 15 years in any event, albeit, it's less likely the further away you get from the original event. In terms of that question that's still outstanding and nobody really knows the answer to now is yes, the Defective Premises Act can bring claims 15 years from the cause of action, But if it's10 years after you've retired, and you have no run of cover in place, will they still pursue a claim? That's not an insurance issue, I think, that's more of a public policy issue as to whether or not really the courts are going to suggest that Joe Bloggs, who sat at home on a Sunday evening happily drinking his cup of tea, watching his stories on the TV, should suddenly get slapped to buy a multi million pound claim, seems quite unlikely, but technically speaking, the possibility exists.

Harry Pangli FCIAT: 23:31

So I suppose, as a chartered member, we have a Code of Conduct, as you're quite familiar with, and that requires us to obtain and maintain adequate professional indemnity insurance. So if one was to close down their business and only had 6 years of run off cover and then open up another business - let's say with a friend-

Darren Hewitt MFL: 23:53

yep-

Harry Pangli FCIAT: 23:54

would we then be in breach of our code because we've not got sufficient cover or adequate cover. I suppose the question here is, what is your view of what adequate means, in this instance, with Defective Premises Act and the 30 year retrospective limitation period?

Darren Hewitt MFL: 24:11

Well, in terms of adequate that's, that is, how long is a piece of string question. The only advice we can give, because we can't tell you what to do. We can't say you must do this that falls outside of what we can do. All we can do is advise as best we can. And if your liabilities are potentially going to last for 15 years, then so long as is reasonably and economically practical, we'd mainly would suggest maintaining cover for as long as you can. We're never gonna suggest you do something that puts you at significant disadvantage, especially if you're looking into your golden years and you've got your pension and your nest egg. We're not gonna suggest that you really should be, you know, doing without your heating for the next 6 months so you can pay for some policy just in case a claim arises. But the reality is, that liability is there, and if you can maintain it for the longer period, for the better. In the situation arising where you are then going back into trading, you can probably continue keeping that run off, theoretically, you might be able to ask us to add the previous company to the, in a new policy, subject to an awful lot of questions from insurers about whether or not that's acceptable, but it's theoretically a possibility.

Harry Pangli FCIAT: 25:21

It's quite a difficult environment to navigate, especially if you are having to close down a company and start a new one. And I suppose I can see our members, chartered members, having to not only consult someone like yourself for guidance or for some sort of advice, limited advice. But I can also see them having to also speak to lawyers to get further guidance on what would be the reasonable approach. So, in terms of, obviously, we've spoken about the Defective Premises Act, and there's, there's been a recent case URS Corporation Limited, and BDW Trading Limited. And obviously that's that's now brought in - correct me if I'm wrong - but there's a structural engineer design involved, and that was defective. I haven't read the case myself, however, could this case and the result of this case affect professional indemnity cover for CIAT members, now that we know, developers can also pursue professionals under the Deffective Premises Act?

Darren Hewitt MFL: 26:22

Not really, no, it's the case is going to help clarify who can and can't bring a claim in respect of claims under the Defective Premises Act. But the claims themselves remain the same. So, with the BDW case, they were out of it because they weren't actually involved anymore, because of the property had all been sold on, if memory serves. But obviously they were still the party involved in the original construction, and there was liability there, because they were the ones who built it, and they relied on the structural engineer, so that's how that claim sort of arises. All it means is that party can't say "Well, I'm out and I'm done. It isn't anything to do with me anymore." It's now if you were involved at time it was done, you're still involved. But the claim itself is still, has that individual done the job properly in accordance with the Building Regulations, the standard of reasonable skill and care or not? So it's not really that I've seen so far, had any particular impact. It just means there's little more clarity in what kind of parties can be involved should a claim arise.

Harry Pangli FCIAT: 27:26

Good, so at least we're seeing case law develop the Defective Premises Act, especially the 30 years retrospective period, which I think was related to this case. So at least we are now seeing some clearer guidance that we can we can navigate. I think the other aspect to the Building Safety Act and other acts that it has affected is, there was the Building Safety Act was seeking to amend Section 38 of the Building Act of 1984 which was simply dormant for a long period of time-

Darren Hewitt MFL: 27:58

still is I believe-

Harry Pangli FCIAT: 28:00

it is, yeah, it's not being enacted, but I think the intentions are there, but we don't actually know when that might be. Whether that will be the case-

Darren Hewitt MFL: 28:09

well after 40 years, you can't rush through things-

Harry Pangli FCIAT: 28:11

No, certainly not, especially with something that's been there already, and everyone's just ignored it. But in terms of, but in terms of expecting that Section 38 of the Building Act was to be enacted, could you see this potentially affecting professional indemnity cover?

Darren Hewitt MFL: 28:33

There are a couple of worries with that one over maybe the Defective Premises Act, which is currently a little more straightforward. Problems we got with it is, obviously, as far as I am aware Section 38 basically, is in relation to, has the Building Regulations been adhered to? Or has there been a breach of the Building Regulations? Which is, to degree, a potentially much more black and white question. The problem with that is, which I think, ultimately, I think things like the Grenfell Inquiry highlighted, is that in certain circumstances, firms have historically used a route to compliance rather than we have complied with the Building Regulation, and concern we have- and as yet, there's like nothing to support nor suggest that this is going to be an issue - is that if the Section 38 is imposed as a clear black line you must have met the Building Regulation and the guidance and the route to compliance, and everything else you could do around it, which sort of ticked the box, as far as people were concerned at the time the work was done, isn't enough. There are potentially gonna be more claims that could arise out of that.

Harry Pangli FCIAT: 29:39

So, yeah, I mean, certainly when it when it comes to a breach of Building Regulations which potentially causes damage, such as death, injury or to any person, or damage to a property, that still kind of narrows the scope of what is actually the breach of which Building Regulations - so it's not, you know - we're not looking at potentially (picking something out there) but in terms of erm . . . sound performance of a wall, isn't going to result in the damages to this, so any potential breaches will be very much narrowed down to fire related issues or structure. Is that quite right as an assumption to make?

Darren Hewitt MFL: 30:16

Well, I'd say so. Anything which is a nuisance or a bit complicated, I suspect nobody's going to spend too much time worrying about. There have been enough claims about people complaining about noise insulation not being suitable. But again, I think timing is going to be an issue on those. It is yeah probably be more relevant to anything which is unfortunately bordering on the more catastrophic side than than the just sort of niggles and nuisances.

Harry Pangli FCIAT: 30:41

And of course, we have the - as we discussed at length - the Principal Designer role, and we're referring to the Building Regulations. I feel like I have to keep on stating that, just to avoid any confusion-

Darren Hewitt MFL: 30:53

they didn't help when they went "Let's introduce a new role. We've got this Principal Designer under the CDM, but let's really confuse everybody by adding another one just because we can"-

Harry Pangli FCIAT: 31:01

Yeah, with the same title. I mean, it's, although, you know, they have, I believe, adjusted the definition of Principal Designer under CDM as CDM Principal Designer, but then kept Principal Designer as the role and the name under the Building Regulation. So you see all the, all articles online will very much confuse everyone, even even all the professionals as well as the clients.

Darren Hewitt MFL: 31:28

Yeah, well, we have unfortunately had a couple of cases where, when questions have been put to people in relation to doing the PD role, and not just in terms of chartered members and architects and other professions as well, them sort of confusing the two, and one of us having to go, you know, we meant the other one,

Harry Pangli FCIAT: 31:43

yeah, which is, yeah, it's easily done. But, and it doesn't help that there was a there was an article floating around, where - written by an institution - where they said it was an addition to the current role. And of course, once we got Secondary Legislation through, we realized, well, actually, it's a completely different role altogether, but wasn't really quite thought through, potentially, especially for SMEs-

Darren Hewitt MFL: 32:15

This again, this is the danger of any new role that suddenly develops. You look at it on day one, where it's the first effective draft of something, and everybody got an idea about what they think it means. But until we get to a point where it's beeneffectively tested enough, and prodded at enough, by lawyers and courts and other professionals, the final sort of shape and form of it is always going to be a little bit hazy. So initial confusion that when it first started, I think is probably something we all suffered from a little bit as we were trying to get to grips with what we thought the Government was trying to achieve when they just released the Building Safety Act. And I think some of us, I think a lot of us, are still a little confused about what they're actually trying to achieve.

Harry Pangli FCIAT: 32:58

I agree, as a professional in the industry, I equally find it quite confusing at times to unravel all this Secondary Legislation and all this guidance, especially around Principal Designer, because it's actual regulation is not easy to read or follow. But within that guidance, when it comes to a Principal Designer, there is a term used "reasonable steps", I feel that's a bit of a comfort as a Principal Designer, taking reasonable steps to ensure that what I design, if built, would be compliant with the Building Regulations, or as referred to in the regulations, its relevant requirements. If they remove reasonable steps from that statement, could you see an impact with the insurance market in terms of potential cover?

Darren Hewitt MFL: 33:45

It would depend how they go about that and how they achieve it. So yes, we all take comfort in"reasonable" still being in there, because obviously that's the general standard all professionals tend to be held to, which is "the reasonable standard of skill and care",and the yard stick that's used is always going to be would another firm of the same size and experience in the same circumstances have done the same thing? Which is great, the standard we've been using for decades now, as long as that reasonable standard is in there, we're fine. Because there's always going to be an argument about what a professional has done is reasonable or not. If they take that out, and they try to make it much more we refer to a stricter liability as in it's a black or white, yes or no. There's no you know, did you do everything you could do? Did you do it? Yes or no. That does create a slight degree greater potential for there to be issues. Because, again, there's no argument about whether you've done everything you could have done, or should have done, or did everything you could do with the knowledge you had at the time based on what was given to you by the client, what you could see this, that and the other, and did you do this? Yes, no. So anything that can be potentially viewed as that strict will impact on professional rules and the insurance position.

Harry Pangli FCIAT: 34:59

So you could, likely see a potential change couldn't we I suppose, if that word "reasonable" was to be removed as a Principal Designer role-

Darren Hewitt MFL: 35:07

hopefully that's not something they'd do, because, again, the sort of difficulties that would give rise to given them. It is quite difficult to, you know, well it should be quite difficult to create a stricter liability sense in terms of something which relies on the skill and professionalism of an entity and a firm. Rather than something which is much easier. Did you do this? Yes, no. Construction contracts and construction projects, as many a general client has found out to their cost, is one thing at the start of the project on paper, but becomes something very different during the life of the project, because it's never quite what you think is going to be at the start. And obviously professionals have to revise things and change things and develop things as - sort of - new situations and new issues arise on site to then say, well, it's not a reasonable thing you must have done this seems really quite onerous and bordering on draconian.

Harry Pangli FCIAT: 36:00

Certainly as designer I would be very concerned, and hearing your view on this would equally sort of meet that concern, so. But I mean, I suppose we've spoken about building safety quite a lot now, and I know we've only sort of skimmed the surface, these are quite heavy topics to digest. So coming away from this and now looking at the future and the future of artificial intelligence, it'd be good to kind of have your understanding and view on how the professional indemnity insurance cover might change, if it would, as the industry starts to implement artificial intelligence to produce design information.

Darren Hewitt MFL: 36:42

AI is a topic which has been raised by a number of people in a number of different contexts, and it strikes as - or strikes me, or put it that way - as something which can be a potentially useful tool, but it is a tool which is also fraught with its own problems. It is a case of, yes, it is going to make some aspects of a job easier, because it also automate some things to make things much smoohter and much faster, but there are a whole litany of questions that need to get asked in terms of what system is being used? What data is that system using as its background? What are the copyright issues in terms of that? Because, again, AI doesn't develop anything new, it just reconfigures and regurgitates what it has in it already, which may be subject to somebody else's copyright. What are the liability issues in terms of if you rely on an AI system, and the AI system makes a right mess of it, do you have any course of action against whoever provided it in the first place? Or are you just left with the mess? The concern to have is, while it might make the job easier, on one hand, you are going to have to very carefully vet what is done. So have you actually made your job easier?

Harry Pangli FCIAT: 37:55

Well, I mean, I suppose I keep saying we're going to come away from the Building Safety Act, but I just keep having to come back to it-

Darren Hewitt MFL: 38:01

I don't think we can-

Harry Pangli FCIAT: 38:02

I don't think we can, it's kind of instilled in what we have to do going forwards But this then comes back to the Principal Designer role, I suppose, where, if you're not reviewing that information before it's sent out, then how can you ensure that what is designed is, if built, would meet the Regulations? So that is quite a concern. I suppose that if members were to use artificial intelligence to blindly draw plans and send them out and they're relied on, could we see them being potentially liable for that?

Darren Hewitt MFL: 38:37

If they've sent the plan out and they've put their name on it, they will be. As again, the expectation is going to be, if you're producing it, you're responsible for it. You need to make sure that you have checked that it is suitable and correct. And if the chartered member hasn't done that, there will be a liability there. The other thing, the other sort of concern with that slightly away from Building and Safety Act, just for change, is if the chartered members are using AI to generate the drawings there - at some point will be an argument from the client - "Well, what am I paying you for? If you've just slapped it into this computer system that spit out a drawing, what have you done for your money?" So there's another raft of - sort of - client relationship issues that can potentially arise, and trying to rely on a system to make your life easier, but potentially, effectively, possibly do you out of a job. And the only other issue we've got, which wasn't highlighted by any sort of construction profession, it was actually highlighted by a law firm, is that in certain circumstances, if the AI system can't find the information it's trying to put into place, they can hallucinate. So they effectively make stuff up to fill a gap.

Harry Pangli FCIAT: 39:40

Oh, that's very worrying. So-

Darren Hewitt MFL: 39:41

so again it's a case of making sure, just because it looks really good, you actually have to make sure that it is actually right.

Harry Pangli FCIAT: 39:49

No, certainly, as as a professional, I think even under our Code, we need to ensure that what we are producing is correct and it's checked and I suppose relying on artificial intelligence to draw information and not have a checking procedure in place, is a worry. But equally, as you quite rightly said, clients are going to start thinking "Well, hang on, I can get that app. I can get that program and just click a button and do this for me. Why do I need you to facilitate this?" And that can equally cause a bit of tension through the industry. But I think with artificial intelligence and the point you raise where if it doesn't have enough data, it just makes it up, I think we could equally get back into trouble with designing potentially dangerous buildings, because we have AI, we have a lack of information out there and a lack of checking from from professionals.

Darren Hewitt MFL: 40:47

Yeah, well, again, as I said it's going to come down to very much where it's coming from and what data set is using. So if it's something which has been very specifically designed, created and for lack of a better term, educated by people who are designers and professionals, it's probably going to be in a better place.Again, not 100% and cannot be entirely relied upon, but it will be in a much better place. If it's something which is more open and just has access to information generally, without a sort of very clear, curated knowledge background, it could spew out anything-

Harry Pangli FCIAT: 41:21

Well -

Darren Hewitt MFL: 41:22

that would be where the concern is.

Harry Pangli FCIAT: 41:24

Let's not ask AI to consider the Principal Designer role, because I can see how that can get quite confusing.

Darren Hewitt MFL: 41:31

I'm fairly confident if you went to one of those systems and put that in there, it would spit out- probably quite a long article - that kind of makes sense, until you actually start reading it properly and you realize it makes no sense at all.

Harry Pangli FCIAT: 41:46

Kind of a hybrid of two very different roles merged into one. So -

Darren Hewitt MFL: 41:52

I might actually do that to see how funny it is-

Harry Pangli FCIAT: 41:53

Yeah-

Darren Hewitt MFL: 41:54

AI is a useful tool, but I think it's a case of understanding the limitations of that tool, rather than assuming it's going to be a wonderful fix all for everything. There will be little bits and pieces that AI excels at. Speaking personally, I have used it, but I've been doing it to use Excel. I can't get Excel to do a thing because I'm not that great at Excel. I can ask an AI program that goes, what you want to do is this. Great. Grand. I can copy and paste that and Excel will behave as I want it to. But that probably about as far as I'm willing to go with an AI system in terms of the day to day aspects of, you know, my personal life or my job. Because, again, the expectation is I, as a professional, have the knowledge and skills to do my job and advise accordingly. I shouldn't have to rely on a computer system that may, or may not, be making stuff up, to fill the gap for me. I think from a chartered member's perspective, it's very much the same. You have the knowledge, you have the skills. there will be occasions where AI can maybe tidy up something or help a little bit. But again, your selling point, the reason why people come to a chartered member is that you have that knowledge, you have those skills. Why would you try and undermine your own selling point by going HAL 9000 can do this just as quickly? No, you are the professional. You are, the reason we've come to you-

Harry Pangli FCIAT: 43:13

and a part of our role is to actually navigate these very complex documents and understand them and digest them. And I suppose if we are trying to use AI to summarize this, then we are going to lose an important skill that chartered members have, and that is actually digesting complex information and making it digestible, especially to clients and to do to do our job.

Darren Hewitt MFL: 43:38

Well, again, the problem becomes - as we've said - if you rely on that and you don't check it. So - there's an example you come across there- the information itgave in relation to the regulation was wrong, and the client acts on that, there's a claim coming your way, and, well, I used AI to do it is very much not going to be a defense.

Harry Pangli FCIAT: 43:57

No, I could certainly see that what we've discussed today about Section 38 the Defective Premises Act, Principal Designer, we could all fall into potential claims through those avenues if we use AI incorrectly, especially on a lot of the technical elements of what we do. Like you said, I could see AI being quite useful with with Excel. I think you've taught me something here that I certainly might adopt. I just never thought of that as thinking, this is great, it could really help.

Darren Hewitt MFL: 44:27

Well I got that tip from a IT professional. I asked them, because I said I couldn't get Excel to do a thing. So I asked him, "How do I do that?" he went "I've got no idea ask this, instead." I was thinking isn't that cheating? And he went "No, it's how I do do my job." All right, lesson learned.

Harry Pangli FCIAT: 44:44

Well, it's certainly not going to be something I'm going to adopt with what I do as a designer, but I certainly take it on with Excel and other programs. I think that's that's quite good, but no. Thank you very much, Darren for being here to answer some questions and also discuss the future of professional indemnity insurance, especially with the current climate that we have with the Building Safety Act and all the changes that it brings.

Darren Hewitt MFL: 45:13

Again, as I said, given the sort of nature of well, both the changes in legislation, changes in the construction industry as a whole, there are also changes in the insurance market. So what is true today, won't be true two weeks from now, both in terms well, in terms of all of it. What policies will cover will change. Restrictions will go away, some will come in. It's always going to be a sort of vaguely movable feast. And you know, if we're doing our job properly, and I think we are, we will always help, advise and navigate the chartered members through this as best we can.

Harry Pangli FCIAT: 45:47

Certainly appreciate it. I think we all need that guidance, and we all need that assistance. Otherwise, this complex information, not a single person can really digest alone. We all need to work together to understand what our issues are.

Darren Hewitt MFL: 46:02

To go back to a very old quote I can't source at all, "No man is an island."

Harry Pangli FCIAT: 46:06

Yes, that is certainly true. Teamwork is very important.

CIAT: 46:13

You've been listening to the Where it's AT, podcast from CIAT. Thank you to Harry and Darren for their fascinating discussion on professional indemnity insurance. Don't forget to subscribe and share and to tune in next time. The contents and views expressed by individuals in the Where it's AT podcasts are their own, and do not necessarily represent the views of the companies they work for or of the host. This podcast is for informational purposes only and should not be considered as advice.