R The Underwritten Warranty Company Ltd t/a The Insurance Backed Guarantee Company (First Claimant) The Double Glazing & Conservatory Quality Assurance Ombudsman Scheme (Second Claimant) v Fensa Ltd Network Veka Ltd (First Interested Party) Price Bailey Insurance Pcc Ltd t/a Safeworld Insurance Group (Second Interested Party) The Secretary of State for Communities and Local Government (Third Interested Party) United Kingdom Accreditation Service (Fourth Interested Party)
| Jurisdiction | England & Wales |
| Judge | Mr Justice Dove |
| Judgment Date | 15 September 2017 |
| Neutral Citation | [2017] EWHC 2308 (Admin) |
| Court | Queen's Bench Division (Administrative Court) |
| Date | 15 September 2017 |
| Docket Number | Case No: CO/5995/2016 |
[2017] EWHC 2308 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Justice Dove
Case No: CO/5995/2016
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Tim Ward QC (instructed by Davis Blank Furniss) for the Claimant
Jamie Burton (instructed by Wedlake Bell) for the Defendant
David Manknell (instructed by the Government Legal Department) for the Third Interested Party
Hearing dates: 29 th June 2017 & 21 st July 2017
Introduction
The first claimant, the Underwritten Warranty Company LTD ("UWC") are insurance brokers specialising in the provision of insurance backed guarantees ("IBGs") which are required for a regulatory scheme in relation to self-certification under the Building Regulations 2010 ("the 2010 Regulations"). The second claimant is its parent company. It offers consumer protection to customers of its members, including accreditation of those members, together with schemes of mediation and ombudsman services, as part of the aftercare following the installation of replacement windows, doors and other forms of glazing within existing dwellings.
The defendant, FENSA, is authorised by the third interested party, the Secretary of State for Communities and Local Government, to operate a Competent Persons Scheme (a "CPS") under the 2010 Regulations. The CPS is also part and parcel of the scheme of regulation for self certification under the 2010 Regulations.
This regulatory scheme, in brief, is as follows. The power to make building regulations in relation to a range of issues including the design and construction of buildings, demolition of buildings and the services, fittings and equipment provided in or in connection with buildings is given to the third interested party by section 1 of the Buildings Act 1984. Paragraph 4A of Schedule 1 of the 1984 Act provides as follows:
"A(1) Building regulations may—
(a) provide for requiring that, in prescribed circumstances, a person of a prescribed class or description is to give to a local authority or an approved inspector a certificate to the effect that the requirements of building regulations as to matters of a prescribed description are satisfied;
(b) provide for requiring that such certificates be given within such periods or at such times and in such forms as may be prescribed;
(c) provide that a local authority or an approved inspector is not to exercise or perform a prescribed power or duty unless—
(i) such a certificate has been given to them or him; or
(ii) such a certificate has been given to them or him and the certificate has been accepted by them or him;
(d) make provision as to—
(i) the acceptance of such certificates by local authorities and approved inspectors; and
(ii) other steps to be taken by local authorities or approved inspectors in connection with such certificates.
(2) Building regulations may provide for such certificates to be treated as evidence (but not conclusive evidence) of the matters certified."
Regulation 20 of the 2010 Regulations makes provisions in relation to self certification schemes in the following terms:
"20.—(1) This regulation applies to the extent that the building work consists only of work of a type described in column 1 of the Table in Schedule 3 and the work is carried out by a person who is described in the corresponding entry in column 2 of that Table in respect of that type of work.
(2) Where this regulation applies, the local authority are authorised to accept, as evidence that the requirements of regulations 4 and 7 have been satisfied, a certificate to that effect by the person carrying out the work."
Schedule 3 of the 2010 Regulations contains details of self certification schemes identifying the type of work which is covered by the scheme and the identity of a person who is entitled to carry out that work and have the benefit of the self certification regime. In particular, as applies in the present case, schemes 10 and 11 are specified as follows:
| Column 1 | Column 2 |
| Type of Work | Person carrying out work |
| 10. Installation, as a replacement, of a window, rooflight, roof window or door in an existing dwelling | A person registered in respect of that type of work by BM Trada Certification Limited, […] Certsure LLP, by Fensa Limited under the Fenestration Self-Assessment Scheme, by NAPIT Registration Limited, Network VEKA Limited, or Stroma Certification Limited. |
| 11. Installation, as a replacement, of a window, rooflight, roof window or door in an existing building other than a dwelling. This paragraph does not apply to glass which is load bearing or structural or which forms part of glazed curtain walling or a revolving door. | A person registered in respect of that type of work by BM Trada Certification Limited, Blue Flame Certification Limited, CERTASS Limited, Certsure LLP, by Fensa Limited under the Fenestration Scheme, by NAPIT Registration Limited, Network VEKA Limited, or Stroma Certification Limited |
It will be noted that the defendant is specifically identified in relation to schemes 10 and 11 as operators of a scheme, which is their CPS.
The third interested party has issued, in April 2016, Conditions of Authorisations in relation to competent person self-certification schemes under the Building Regulations. Under condition 1 of those Conditions of Authorisations the fourth interested party, the United Kingdom Accreditation Service ("UKAS") is provided with the specific role of operating a scheme of accreditation which each CPS has to achieve. UKAS is charged with the initial assessment of any scheme submitted to it for endorsement as a CPS and thereafter required to reassess each scheme annually to ensure that the Conditions of Authorisations are being met. As the third interested party explained both in evidence and submissions, UKAS is responsible for monitoring compliance with the Conditions of Authorisations on behalf of the third interested party. Conditions 5 and 17 of the Conditions of Authorisations are relevant to the present proceedings and provide as follows:
| Conditions of Authorisations | Notes on how to demonstrate meeting the conditions |
| 5. Scheme operator to have an absence of, or methods for avoiding, conflicts of interest between the commercial interests of any sponsoring or parent organisations and management of the scheme. | The scheme operator shall document how any conflicts of interest will be managed and demonstrate how risks to impartiality can be minimised or eliminated, as required by ISO/IEC 17065:2012 sections 4.2 and 5.2. For example: possible conflicts of interest may arise where a scheme is part of or owned by a larger commercial, trade or professional body. Where a parent or subsidiary company provides financial protection for scheme registrants, this may be acceptable provided there is no conflict of interest with the certification activities performed by the scheme operator. |
| 17. Scheme operator to ensure consumers are provided with appropriate financial protection to put work to dwellings right, which is non-compliant with the Building Regulations, where the original installer cannot do so (because they are no longer trading). | Financial protection must be provided for a minimum of six years from the date of completion for work to dwellings, except where the client is a local authority or housing association in which case financial protection does not need to be provided but must be offered. Financial protection does not need to be offered or provided for work to buildings other than dwellings. No protection is needed where scheme registrants are sub-contractors and the main contractors' liabilities cover the requirements of this condition, for example new house warranties. Possible mechanisms include guarantees, insurance-backed warranties or, where appropriate, professional indemnity insurance. Financial protection will be deemed appropriate if: (a) the fund supporting it is of a size commensurate with the risks involved; and (b) the consumer has direct access to it even if the scheme operator is no longer running a scheme. Where a manufacturer's product guarantee is for a shorter period than six years, this period will take precedence for that product. |
In order to meet the requirements of condition 17 of the Conditions of Authorisations the defendant maintains a list of IBG providers. In or around July 2014 the defendant recognised the IBG issued by UWC and approved it for use by members of the defendant operating within their CPS. On 23 rd July 2014 the terms of the agreement between UWC and the defendant were set out in correspondence. Subsequently a further written notification of the terms of the agreement between UWC and the defendant for UWC's appointment as an approved insurance provider pursuant to the defendant's CPS was provided in a letter dated 27 th August 2015. The confirmation of the terms of the agreement was provided by UWC countersigning the letter of 27 th August 2015 on 5 th September 2015. Pertinent terms of that contract for the purposes of these proceedings are as follows:
"We are writing to set out the terms agreed between us relating to your appointment as an approved insurance provider ("Approved Insurance Provider") in respect of the issuance by you of Insurance Backed...
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