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Stuart J
Stuart J, Solicitor
Category: UK Law
Satisfied Customers: 22624
Experience:  PGD Law. 20 years legal profession, 6 as partner in High Street practice
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NHBC Claim - 9th Year - Insurance only covers "damage" caused

Customer Question

NHBC Claim - 9th Year - Insurance only covers "damage" caused by a "defect".

I live in a 4-story block of flats. We had a full (invasive) structural survey carried out to determine if there were any hidden problems as we were a year away from our NHBC insurance running out. The FRICS surveyor found a horrendous number of structural defects. We have a lead roof that is severely corroded due to improper construction and seriously weakend structure due to failure to follow the structural engineering drawings. A number of the defects have caused condensation that is harming the structural integrity of the roof but nothing has actually failed yet. If we ignore it chances are we will need to replace the entire roof structural frame within the next 20 years so one could say the roof has suffered harm and will continue to do so unless the defects are remedied.

Quite a number of the defects put our roof at risk to high winds. All of the problems would have been obvious to any competent inspector who laid his eyes on them so we can only surmise the builder closed up everything to hide the problems from the inspectors. The main problem with the lead roof which is causing severe corrosion is the lack of ventilation and this is visible now - there are no vents in the fascias or soffits.

We have have had a report from a qualified and very experienced civil engineer that effectively says the builder was incompetent. Building Control have told us that what they have seen is in clear breach of Building Regulations as they were in 2003 when the building was constructed. Everyone is telling me the NHBC are somewhat notorious for rejecting claims beyond the 2nd year when they no longer have redress back to the builder. To add to our misery the builder (a Limited Company) has gone bust so we have no redress there.

From what I understand from others our building needs to be literally falling down before the NHBC will accept the claim which amounts to over £100K in remediation work. The "defects" are causing a significant weakening of the structure but it has not actually failed yet - however all it will take is a wind storm similar to those back in 1987 and we will probably lose our roof.

There are two questions:

(1) What is the legal definition of "damage" in the context of insurance cover ?

(2) Did the NHBC inspectors owe the policy holders "duty of care" when performing their inspections given that their web site says “Inspectors will visit each property to check the elements that you would not normally see".
Submitted: 5 years ago.
Category: UK Law
Expert:  Wendy-Mod replied 5 years ago.
Hi, I'm a moderator for this topic. I've been working hard to find a Professional to assist you right away, but sometimes finding the right Professional can take a little longer than expected.

I wonder whether you're ok with continuing to wait for an answer. If you are, please let me know and I will continue my search. If not, feel free to let me know and I will cancel this question for you. Thank you!
Customer: replied 5 years ago.

I am willing to wait up to one week for a response. If you find someone who is an expert on case law related to the word "damage" and the "duty of care" an NHBC inspector owes to the policy owner I would be willing to increase the offer to £100

Expert:  Fran-mod replied 5 years ago.
Thank you for your continued patience. We will continue the search for a professional for you.
Expert:  Stuart J replied 5 years ago.
I have been asked to look at this for you. How much will it costs put right if done now?
Customer: replied 5 years ago.

The total of the estimates for remediation is between £60K (at the low end) and £100K (at the high end).


The foregoing figure does not include the cost of alternative accommodation whilst remedial work is carried out. We estimate the latter to be around £1K per month for approximately six months (rental of a local terrace house).


The main things I am looking for are case law in relation to the word "damage" and the NHBC in general.

Expert:  Stuart J replied 5 years ago.
I am not at my PC at the moment but will get back to you asap.
Expert:  Stuart J replied 5 years ago.

In this context, the term damage is damage will be
given its normal dictionary meaning:

physical harm that impairs the value,
usefulness, or normal function of something

if you Google "complained about an
NHBC" you will get plenty of reading.

I can tell you that we had a client who
actually got wood flooring and the kitchen replaced by the NHBC but trust me, she was persistent. You will
find this incredible what it was because there were too many knots in the wood

I can tell you that if there is no
ventilation in the loft or roof void and there is moisture then you will end up
with either dry rot or wet rot.

You will have gathered that NHBC are notorious
for trying to wriggle out of paying claims. I would therefore not be putting up
with their shenanigans for long. Fortunately, they are regulated by the Financial
Services Authority (they are basically an insurance company) which means that
you can refer any complaint to the Financial Ombudsman. Their Customer Charter
succinctly omits to tell you that.

The NHBC Inspector and indeed the Building
Regulation Inspector (who also appears to have failed in his duty) both owe a
duty of care to the eventual owner of the property. If they did not only duty
of care to the eventual owner of the property, then there would be absolutely
no point in them inspecting the building.

What exactly have the costs
Customer: replied 5 years ago.

Your response seems to end prematurely -


Regarding Building Control - Whilst there are a horrendous number of regulations there are a very limited number of statutory inspections associated with the regulatory framework. Most of them relate to drainage and foundations. However if a Building Control inspector notices any deviation from the regulations, even if not covered by a statutory inspection, he can raise an enforcement order to compel the builder to sort out the problem if he declines to do so voluntarily.


Building Control have gone through their records and found they were only called to site for the statutory inspections and made note of the fact that everything was sealed up (ceilings, walls, etc) so it was impossible for them to observe any problems beyond the statutory inspections.

Expert:  Stuart J replied 5 years ago.
What have NHBC actually said about this?
Customer: replied 5 years ago.

We are preparing our claim at the moment.


Having read of the NHBC's escapades in refusing claims we want to spend a bit of time researching the wording of our claim - we have until late next year to submit it.


I have had previous dealings with the Financial Ombudsman service and know that we cannot add any supplemental information to the claim between the time the NHBC reject it and when we submit it for review.


We wish to be reasonably certain of our legal footing before we challenge the NHBC's interpretation of the word "damage" and likely denial of any "duty of care" to the policy holders.


We believe that the manifest failure of the NHBC's inspectors to detect what are patently obvious defects when they are visible will be the strongest line of "attack" so to speak.


Because we have caught the "damage" before it has become serious we only have structure that is currently incapable of meeting its design loadings but it could be argued that this is due to the "defect" itself rather than the "damage" caused by the "defect".


We suspect the NHBC's counter argument will be the "damage" is not sufficiently significant to justify a claim as this seems to be their "standard response" to claims in the late years of policy cover.


It would be very helpful to know if there is any case law where someone took the NHBC to task in similar circumstances and won their case either on the issue of interpretation of the word "damage" or in regard to their "duty of care". This is the main reason I came to the "Just Answers" site.



Expert:  Stuart J replied 5 years ago.

I agree with all the points you make but as I am unable to answer your specific questions, I will opt out for another expert. I also note that you had been waiting for some time for an expert already which is why I was asked to look at this.

I will however, be frank and tell you that this is probably outside the remit of the questions and Answer website and would strongly suggest that you sought Counsel's opinion which would probably cost you between £500 and £1000 plus VAT.

You are into a very specialist and very specialised area of law and you are going to need a lot of expert opinion.

The fi bit of advice that I will give you is that although you may have till late next year to submit it, allow yourself at least six months leeway because there will be inevitable delays.


Expert:  Wendy-Mod replied 5 years ago.
Hi, I’m a moderator for this topic. It seems the professional has left this conversation. This happens occasionally, and it's usually because the professional thinks that someone else might be a better match for your question. I've been working hard to find a new professional to assist you right away, but sometimes finding the right professional can take a little longer than expected.

I wonder whether you're OK with continuing to wait for an answer. If you are, please let me know and I will continue my search. If not, feel free to let me know and I will cancel this question for you. Thank you!
Customer: replied 5 years ago.

Hello, I am willing to wait but I have very specific questions I need answers to.


The previous answers did not provide anything new as I have already done extensive research. I am specifically interested in case law and do not have access to the on-line resources that solicitors and barristors have.


The one thing I am fairly certain about is the NHBC is going to mess us about over the word "damage" because this is clearly what they have been doing with everyone else who has published a complaint on the internet abut the NHBC.


We have quite a number of very serious "defects" which any reasonably competent NHBC inspector should have seen during the course of construction if there was a reasonably rigorous inspection regime in place.


We also believe the builder had never built a 4-story block of flats before ours and, given the negligence/incompetence of most of the hidden defects doubt that the NHBC exercised reasonable dilligence in allowing the builder to offer NHBC insurance policies. To us this is failure in their duty of care to the general public because it gave the builder commercial credibiltiy he clearly did not deserve.


There is a very cosy relationship between the NHBC and their registered builders that is, in effect, a self-regulating system designed to maximise the NHBC's profits. This is a clear commercial choice by the NHBC but it also appears to result in an unreasonable level of trust between the NHBC inspectors and the builders which is clearly not in the interest of the homeowner.


In our case we believe the NHBC manifestly failed in its "duty of care" to the policy holders by failing to carry out a reasonable level of inspections during the construction works.


What I am looking for is case law where the NHBC has lost a case in regard to legal arguments regarding "damage" and "duty of care" with particular interest in the latter.


We intend to seek QC opinion but wish to cast a wider net to the solicitors providing expert advice on Just Answer to help us provide specific instructions to the solicitor who prepares the brief to the QC.


Clearly if there is case law regarding the NHBC in similar circumstances and they lost the case it will significantly improve the chances of our claim succeeding without having to resort to legal remedies with an unpredictable outcome and the possibility of an appeal. The latter processes could easily exceed the cost of us just paying for the remedial works ourselves. Doing so would also give us a guaranteed outcome and be far less stressful.

Expert:  Wendy-Mod replied 5 years ago.
Thank you for your continued patience. We will continue the search for a Professional for you.
Expert:  Wendy-Mod replied 5 years ago.
Thank you for your patience, your business is very important to us, we are waiting on the Professional with the right expertise to come online. Feel free to let us know if you would like us to continue searching for a Professional or if you would like us to close your question. Thank you for your understanding!
Customer: replied 5 years ago.

Leave the question open until the end of the week (Friday, 5-Oct) then close it.