Seanad debates

Wednesday, 5 December 2012

Statute of Limitations (Amendment) (Home Remediation-Pyrite) Bill 2012: Second Stage

 

12:00 pm

Photo of Fergus O'DowdFergus O'Dowd (Louth, Fine Gael) | Oireachtas source

This is an important debate. I welcome the opportunity Fianna Fáil has given to us by organising a discussion on this important issue. It is welcome that the legislation will remain on the Order Paper for further debate as this issue develops. It is a major issue for the thousands of homeowners affected. Senator Averil Power has spoken about the concerns of people she knows in her constituency. However, this serious problem affects thousands of homes. One of the issues that have been raised is the need to ascertain how many are affected. As Senator Cáit Keane said, one does not know one's home is affected until the damage happens. One cannot know in advance. In Ireland these problems generally manifest themselves after between one and nine years. I am aware that it can take up to 20 years in Canada, perhaps due to climatic reasons.

At the bottom of this issue are the actions of those who supplied the building material from quarries. As far we know, just five of the country's 1,200 quarries have been involved in the provision of pyrite material for the construction industry. The main counties or geographical areas identified as being affected are Fingal, Dublin, Kildare, Offaly and Meath.

On the question of the number of households, the report, which is very clear and independent, outlined the worst possible scenario and the figure it came up with was approximately 12,000 homes in all. However, if other homes are found to have pyrite, that will obviously have to be addressed. There is no question of the political system, either the Government or the Opposition, avoiding a proper, real and permanent resolution of this problem. That is what we are all about.

In particular, I acknowledge, as every speaker has, the very difficult and distressing situations faced by homeowners throughout the country, who, through no fault of their own, are living with the appalling legacy of building failures, including unfinished estates, dwellings affected by pyrite or dwellings and developments subject to serious fire and other safety risks. Homeowners affected by pyrite have been waiting for a considerable time, without success, for a resolution to this problem.

The purchase of a home is the largest single investment most people will make in their entire lifetime and they have a justifiable expectation that the home they buy will be a place of enjoyment for themselves and their families for many years. They would also have a belief that if serious problems arose, they would be dealt with promptly and efficiently by those who are responsible, including materials suppliers, builders-developers and the guarantee or insurance companies. However, for a significant number of homeowners affected by pyrite, living in their homes has not turned out to be the enjoyable lifelong experience they had hoped for and, in many cases, they rightly feel let down by those parties whom they believed would provide effective solutions in the event of problems.

I know all of us here empathise with those homeowners, and it was against this background that the Minister, Deputy Hogan, set up the independent Pyrite Panel in September 2011 as the first step to assist in finding a resolution to the pyrite problems for homeowners. The panel's report is one of the better reports I have read and it is very clear, concise, focused and factual. It is particularly clear in its conclusions and analysis. Nobody I have listened to has said, and the report did not suggest, that any of the parties they discussed this issue with was shifting the blame for all of the building failures onto the State and onto a supposedly light-touch regulatory system. That would be to very conveniently ignore the role and responsibilities of the primary actors involved in the delivery of "fit for purpose" building projects, including, in particular, builders-developers, construction professionals and the legal profession.

The key point made is that in terms of the training of building and construction professionals, there was no reference to the possibility of pyrite being a problem, so the professionals employed by the local authorities would have had no knowledge of this. However, as soon as knowledge became available, the issue was addressed. For example, in Fingal the issue first came to notice in June 2007, and by July and August of that year the county council had dealt with it and sent out notices to everybody concerned. Effectively, the action it took prevented further use of pyrite in construction, which is clearly acknowledged in the report.

A strong statutory framework for the regulation of construction activity exists under the Building Control Acts 1990 and 2007. The building regulations clearly set out the legal requirements for the design and construction of buildings, including those applicable to houses and extensions, while detailed technical guidance documents outline how these standards can be achieved in practice. Responsibility for compliance rests primarily with developers and builders who engage construction professionals as required to ensure the requirements are met.

During the course of its work, the Pyrite Panel compared the guidance on hardcore as set out in our national building regulations with that provided in both the UK and Canada, and it concluded that Ireland's building regulations compared favourably with those countries. Furthermore, the Pyrite Panel concluded that the guidance was reflective of the knowledge and experience available at that time in Ireland and that, on balance, it would have been unreasonable to expect that the unprecedented issue of pyrite in hardcore could have been identified by building control officers during normal inspections.

This Bill proposes to amend the existing discovery provisions of the Statute of Limitations Act 1957 to enable householders whose dwellings have been damaged by pyrite to institute a claim within a period of time commencing from the date the presence of pyrite in a dwelling or a neighbouring dwelling has been certified by an engineer. This Bill, while well-intentioned, is flawed. The amendment proposed is a very wide ranging proposal which suggests that the limitation period should run from either of two dates: (a) the date the dwelling or the other neighbouring dwelling has been certified by an engineer as containing pyrite that, in his or her opinion, has or is likely to cause structural damage to the dwelling; or (b) the date the house owner has been informed by the party who built the dwelling that the infill within the house contains pyrite that, in the opinion of the builder of the dwelling, has or is likely to cause structural damage to the dwelling.

Part (a) of the proposed amendment would alter the contractual relationship between the vendor-purchaser and the builder as it extends the responsibility beyond the subject matter of the contract. In addition, in the case of pyrite, a significant characteristic of pyritic heave in Ireland has been its unpredictability within a development, with adjacent dwellings often reacting differently. The recently published report of the Pyrite Panel alludes to this fact and discusses possible influences for this phenomena, including hardcore coming from different sources, the depth of the fill, compaction issues and so on.

Part (b), by only requiring that a house owner be informed by the builder that the infill has pyrite, alters current legal responsibilities. The law must be certain. The open nature of this proposal offends this concept as it provides no time limits in regard to liability. Such a proposal could increase the costs of doing business in the State for those involved in the construction and insurance industries. The law governing the limitation of actions must ensure that a balance is struck between the competing rights of the plaintiff to access the courts and the defendant to fair procedures.

The independent Pyrite Panel which the Minister, Deputy Hogan, established in September 2011 to explore options for the resolution of pyrite problems in private housing submitted its report to him at the end of June. The report contains the following recommendation relevant to the Statute of Limitations Act 1957:

The Panel recommends that the current legislation governing the Statute of Limitations should be reviewed with a view to ensuring that latent defects in buildings, such as those experienced from reactive pyrite, remain covered for a reasonable period during which the defects might be expected to manifest themselves. The Panel notes that work has been done by the Law Reform Commission (LRC) and it would ask that the LRC would address this issue.
I understand the Pyrite Panel had concerns that homeowners affected by pyrite could be statute-barred from taking an action against the builder or insurer because of the period it takes for pyrite to manifest itself. To date in Ireland, the rate of presentation ranges from two to nine years. While I do not believe that legal recourse is a viable option for many homeowners affected by pyrite as the resources required to sustain such actions is probably outside the financial capacity of many of the people involved, nevertheless, I believe there is merit in giving further consideration to that recommendation.

In December 2011, the Law Reform Commission published a report entitled, "Report on Limitation of Actions (Statute of Limitations)". The report examines the rules on the time limits for bringing civil claims in the court and makes 26 recommendations for the reform of the law in this area, including the date of knowledge. I believe this report should provide useful guidance in considering the recommendation in the pyrite report.

The Statute of Limitations Act 1957 comes within the remit of the Minister for Justice and Equality and, as part of the implementation of the pyrite report, officials from my Department will discuss implementation of the recommendation from the report dealing with the review of the limitation periods in the Statute of Limitations Act with colleagues in that Department. In this context, it is premature to consider the issue of the statute of limitations in isolation from all other aspects of the pyrite problem, in particular, proposals for the urgent remediation of homes affected.

The pyrite report which was published in July 2012 is clear in its view that the State was not responsible for the pyrite problem and those identified as having responsibility for delivering remediation solutions for homeowners include quarries, material suppliers, builders-developers, vendors and relevant insurance companies.

However, while the State is not responsible for the pyrite problem or liable for the costs of remediating pyrite affected dwellings, it has a role and duty to assist homeowners to find a solution to the problem. This was one of the key objectives of the Minister in setting up the independent Pyrite Panel. Many homeowners have been trying to find a solution to pyrite problems, without success, for a considerable time. There is a necessity to bring this waiting to an end and provide clarity for affected homeowners.

It should be noted that a sizeable number of dwellings have been and continue to be remediated under various processes, including by some responsible builders who are undertaking remediation works, works being undertaken under structural defects insurance and other types of insurance. I welcome the progress being made and believe this is the correct approach to addressing the pyrite problem. These processes should continue and should not be impacted on by remediation processes to be agreed for homeowners who have no other recourse for remediation open to them. I do not believe the taxpayer should be liable for the costs associated with the remediation of pyrite damaged dwellings. These costs should fall to those responsible. I welcome the panel's clear view on this matter. It is clear that the parties with direct or indirect responsibility for the pyrite problem must face up to their legal and moral responsibilities in providing solutions for homeowners.

Two issues in the pyrite report which have generated some debate are the number of suspected developments-dwellings and the categorisation of dwellings. Following a desktop study by the panel, it is estimated that there are 12,250 ground floor dwellings in 74 estates that may be affected by pyrite. These figures are significantly lower than the figures which have been speculated in the public domain. However, the figures which represented the position in March 2012 are supported by a robust methodology which is set out in the report. Having regard to the methodology used by the panel to arrive at these figures and taking account of the rate of presentation to date in Ireland, the figures represent a reasonably accurate picture of potential future exposure. No substantive basis, of which I am aware, has been put forward for the 60,000 or 70,000 dwellings quoted in some quarters.

Not all dwellings in estates where pyrite has been identified will manifest pyritic heave and significant damage. The reasons for this are outlined in the report. Recognising this position, the panel recommends a categorisation of dwellings to determine appropriate remediation approaches which are detailed in the report. I agree with the recommendation that it would be unreasonable to expect dwellings not exhibiting damage to be remediated simply because there is pyrite in the hardcore. This position is supported in the High Court judgment of Mr. Justice Charleton in the case of JEC v. lrish Asphalt which is on appeal to the Supreme Court. The pyrite report details the basis for arriving at this decision. The approach suggested by the pyrite panel to classify the dwellings into red, amber and green is a practical methodology to prioritise the remediation of affected dwellings. However, a system needs to be in place to repair such dwellings if and when they exhibit damage in the future.

Discussions on possible funding mechanisms for a remediation scheme have been ongoing with stakeholders since the Minister received the pyrite report at the end of June. While the outcome of the initial discussions was disappointing and the responses from the stakeholders did not offer the type of comprehensive and meaningful solution necessary to address the difficulties being faced by affected homeowners, there were some positive elements in the detailed responses received which have formed the basis for further constructive engagement with the parties since last June. While the discussions have taken longer than initially anticipated, it is considered that sufficient progress has been made to justify the continuation of the contacts for a short period. The discussions are now at an advanced stage and are anticipated to conclude very shortly.

The Minister has announced the establishment of a resolution board as recommended by the pyrite panel. In addition to the discussions that have taken place, the stakeholders have been invited to make final submissions, which they are now doing. These will be evaluated in conjunction with the outcome of the discussions and will inform the next steps in providing a solution for affected homeowners. The Minister is anxious to finalise this phase of the process without delay and provide homeowners with some certainty as to how it is proposed to provide for a remediation scheme.

On HomeBond, we do not accept or believe it can be allowed to walk away from its responsibilities.

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