In April 2015, the new Construction (Design and Management) Regulations (the Regulations) came into force (see our earlier alert) and the transition period is about to come to an end. Are you ready?

The Regulations introduced a significant change for construction projects in the UK – abolishing the role of CDM co-ordinator and replacing it with the new role of ‘principal designer’. The responsibilities of the ‘client’ have also become wider-reaching.

The introduction of the new Regulations brought with it a transitional period during which existing CDM co-ordinators could continue work on current projects, under the terms of existing appointments and wearing the old ’CDM co-ordinator hat’. The end of the transitional period is fast approaching and developers (referred to as the ‘client’ in the Regulations) need to be ready.

Principal designers for such on-going projects must be appointed by 6 October 2015, at which point the role of CDM co-ordinators will be abolished.

The UK government’s basic intention behind the changes to the CDM Regulations was two-fold:

• The first was to align the UK regulations with the base EU regulations, which did not require a separate CDM co-ordinator role, but which also did not exempt small projects from the application of the regulations; by removing the CDM co-ordinator role, the intention was to produce cost savings, with the replacement principal designer role intended to be a simple addition to existing designer services.
• The second was to help to ensure that the person fulfilling the principal designer role was in a position to ensure that health and safety factors influenced the design and construction of the project.

The Regulations need to be considered in that light.

What is the client’s duty regarding the principal designer? The client is obliged to appoint a principal designer on projects where there is more than one contractor (which is so widely defined that we anticipate it will capture the vast majority of projects). For projects which were ongoing at the time the Regulations came into force, the principal designer must be appointed by 6 October 2015. The appointment must be in writing and it is not sufficient for an existing CDM co-ordinator appointment just to continue – the role of principal designer must be suitably documented.

For new projects, principal designers should be appointed as soon as practicable and in any event before construction works begins.

If the client fails to appoint a principal designer formally, the client itself will become the principal designer. Many clients would be unprepared (and, in many cases, unable) to take on this role, so clients need to make sure to comply with the administrative requirements by the deadline.

The client’s duties should not be under-estimated or dismissed. If the Regulations are not complied with, an accident on site could mean that the client has criminal liabilities. An example non-compliance in this respect could be as simple as appointing an ineligible party as principal designer.

Who can (and should) be principal designer? As further discussed below, there should be no assumption that an existing CDM co-ordinator will be eligible to take on the principal designer role.

A client is required to appoint as principal designer a “designer with control of the pre-construction period”. The definition of designer comprises any person who prepares or modifies a design, or arranges for/instructs a person under their control to do so.

It would seem that lead designers (commonly architects) and/or the design and build contractor are the most suitable candidates for the position (in accordance with the UK government’s intentions – see above). A briefing note issued by the RIBA also suggests that the architect is likely to be the natural choice on most building projects.

However, the construction industry is notoriously slow in adapting to change. This is a new role and a new responsibility for many design consultants and design and build contractors. As a result, we are encountering persistent and wide-spread resistance, with many consultants and contractors not being prepared to take on this role. It is not clear whether this resistance is driven by an uncertainty as to how the Regulations will be implemented, or by an unwillingness to accept additional responsibilities in the absence of established in-house capabilities and experience. The industry will need to adapt to this new expectation.

Another question that arises is how to deal with the appointment in design and build projects, where the design team is to be novated to the contractor. In such projects, once the building contract is entered into the design team will work for the contractor, rather than the client. The principal designer needs to be appointed by the client and in theory, according to the intention behind the legislation, the principal designer should be an additional role allocated to an existing designer.

In those scenarios, the client should appoint the design and build contractor as principal designer or, if the contractor is not taking on the role, the client should appoint the principal designer by way of a separate appointment which is not novated to the contractor.

Our view is that, where consultants are novated to the contractor, there is no reason why a novated consultant should not also contract directly with the client in respect of the principal designer role. On novation, there should therefore not be a problem with separating the design appointment (which is novated to the contractor) and the principal designer appointment (which stays between the client and the consultant).

Can a PM, QS or boutique CDM co-ordinator firm act as principal designer? During the transition period, employers have been seeking to understand whether project managers, quantity surveyors and specialist CDM co-ordinator firms, who have traditionally been appointed to perform the CDM co-ordinator role, can now be appointed as principal designer.

Many established CDM co-ordinators have been keen to protect their position in the market, and therefore keen to persuade clients that they can still fulfil the function of principal designer.

The short answer is that these entities can fulfil the principal designer function… but only if they satisfy the requirements of a “designer” under the Regulations.

It is likely that many of the firms previously appointed as CDM co-ordinator will not satisfy these requirements, and they should not therefore be appointed.

The guidance issued by the Health and Safety Executive has unfortunately not helped in resolving these points. The HSE appears to be taking a broad approach in order to help the industry to fill these roles, suggesting (for example) that a quantity surveyor can be treated as a designer where it prepares bills of quantities (which appears to us rather counter-intuitive, although in practice few projects include bills of quantities in any event).

Although it would be helpful to know that the HSE will not be strict in its interpretation of what does and does not constitute a designer, unhelpfully the guidance issued by the HSE cannot be relied upon in the event of enforcement action; it merely indicates that compliance with the guidance will “normally” be enough to comply with the law, and that health and safety inspectors “may” refer to the guidance. We therefore face a situation where the HSE is expected to interpret the legislation to allow a broad range of principal designers, but in the event of a fatality nothing will prevent the HSE from taking a strict interpretation.

Nevertheless, it appears to us that a project manager, who (although not preparing any designs itself) directs the design team and is therefore in a position to influence the design, should fall within both the definition of the principal designer role and also the UK government’s original intention. Particularly in circumstances where many architects are unwilling to take the responsibility and other designers do not have the same level of involvement in the overall design, a project manager seems to us to be a suitable option.

Does the principal designer need to be a designer on this project? The definition of designer is very broad, capturing anyone who “prepares or instructs design in the course of its business”. However, the principal designer is distinguished from other designers working on a project as they must be “in control” of the pre-construction period. On that basis, it would not, it seems, be appropriate to bring in an unrelated third party to act as principal designer where they are not also involved in the project design.

On the same measure, multidisciplinary practices, which include design divisions, cannot be appointed as principal designer for a project unless their design function is in some way involved within the relevant project.

What if no designer will accept the role? If no appointment is made, then the client becomes the principal designer. In some cases, where there is no suitable candidate to take on the role, this is a preferable solution. Ultimately the responsibility to get this right falls on the client. If a client cannot persuade any of the parties who fall within the remit of the Regulations to take on the role, then the best solution may be for it to take the responsibility itself. This would be preferable to risking a breach of the Regulations that would ensue from appointing an ineligible party.

Whether to support the client in this, or simply to assist the client in its ‘client’ role in conjunction with a separate principal designer, we are finding that a new role of ‘client advisor’ or ‘health and safety advisor’ is developing on some projects. Many clients are considering appointing firms that have traditionally acted as CDM co-ordinator to give them specialist advice and guidance to assist them in ensuring compliance with health and safety duties. Even if this is only a temporary solution until a design and build contractor is appointed, it is a notion that is gaining traction.

Lead designers and design and build contractors are also considering appointing these firms to enable them to fulfil the principal designer duties. It is important to note, in this respect, that a subcontracting of the principal designer services is likely to be acceptable under the Regulations, but a principal designer cannot divest itself of responsibility by delegating the role.

Ironically, given one of the intentions behind the Regulations was to produce cost savings, the fact that ‘client advisors’ as well as ‘principal designers’ are often now being appointed by clients may, in practice, serve to increase costs for construction projects.

Key takeaways

• Principal designers must be in place for existing projects by 6 October 2015 – or the duties fall on the client
• For new projects, principal designers must be in place as soon as practicable (and in any event before construction begins)
• Criminal sanctions can result from a failure to comply with the Regulations
• Design and build contractors and lead designers are ideally placed to take on the role
• Alternatively, a project manager who directs or manages the design process may be a suitable candidate
• The client may opt to take on the role with the support of an experienced CDM co-ordinator firm acting as ‘client advisor’
• Clients should be wary of appointing unrelated third parties or parties who are not carrying out design on the project
• Principal designers must be directly appointed by the client – a subcontractor of the main contractor cannot, for example, take on the role
• In design and build contracts, novated designers can be appointed separately as principal designer in a direct appointment between client and consultant
• The appointment needs to be documented in writing

Client Alert 2015-268