The last financial year saw several federal and state legislative and regulatory developments in Australia's construction sector, and more changes are ahead. Lander & Rogers' insurance law experts highlight key developments.

The Treasury Laws Amendment (More Competition, Better Prices) Act 2022 takes effect on 10 November 2023 and brings significant changes to the unfair contract terms provisions of the Competition and Consumer Act 2010 and the Australian Securities and Investments Commission Act 2001. 

The reforms apply to all businesses that use standard-form contracts when supplying goods or services to consumers and small businesses, including in the construction industry. 

Amendments include the introduction of a civil penalty regime prohibiting the use of, and reliance on, unfair contract terms by businesses; expansion of protections to parties to a small business contract; clarification of what the court must consider in determining what constitutes a standard form contract, and more.  

Consultants are advised to revise their contracts before 10 November 2023 to ensure compliance with the reforms. 

In the ACT, engineers and construction participants will be required to comply with renewed qualification, registration and licensing regimes. For example, the introduction of the Professional Engineers Act 2023 points to radical changes to the engineering profession in the ACT, including establishing a registration scheme for professional engineers and new obligations for registered individuals. 

In New South Wales, reforms scheduled to commence in 2024 will widen the liability of builders, developers, certifiers and other persons performing building work. Consultants should be particularly aware of the broadening of the definition of defects to “serious defect”, and the removal of the requirement that a defect is only a defect when the building is inhabitable, which will markedly increase the scope of actionable defects and omissions.

The Northern Territory Government has a pipeline of changes on the horizon that increase oversight, training and certification of construction professionals, including reforms to builders’ registration for persons undertaking work on class 1b and class 3 to class 9 buildings.

In Queensland, the role of developers and how they are governed by regulators and others in the industry is an area of scrutiny as the state embarks on an ambitious development strategy ahead of the 2032 Olympics.

The South Australian Government has set an official start date for implementing its obligations under the National Construction Code, with the main provisions adopted in May 2023 – including all provisions excluding those relating to liveable housing and energy efficiency, which will commence on 1 October 2024.

The Tasmanian Government reintroduced its Home Warranty Insurance scheme on 1 January 2023, providing cover for incomplete or defective building work in circumstances where a builder dies, disappears or becomes insolvent. 

In Victoria, the passing of the Building Legislation Amendment Act 2023 (Vic), with a commencement date of no later than 24 February 2024, signals political will to reform the state’s regulatory system following a raft of builder insolvencies and rising claims concerning defective building work. 

In Western Australia, changes to the Building Services (Registration) Regulations 2011 coming into effect on 1 July 2024 will introduce registration for building engineering contractors, including those involved with design, construction and production of building fire systems and structures. This, in turn, will bring additional insurance requirements.

This is an abridged version of an article by Lander & Rogers' insurance law and litigation team. For more information on any of the changes mentioned above, please contact Charles Thornley or Chris Bresler.