Ethics breach may go to court

Licensed Building Practitioners (LBP) are now bound by a Code of Ethics, which could see rogue tradies being taken to civil court for breaches of the Code

The Code of Ethics came into force on 25 October 2022 and comprises 19 standards across four principles: work safely, act within the law, take responsibility for your actions, and behave professionally.

It was developed following consultation “with key stakeholders and all LBPs” according to the Ministry of Business, Innovation and Employment (MBIE). Consultation ran for eight weeks and contacted around 26,000 people. Over the course of the consultation period, MBIE received 79 written submissions and hosted 277 webinar attendees.

Previously, the LBP Board could not consider civil matters that directly relate to contract management. However, section 4.3 of the Code of Ethics states: “You must not use inappropriate methods to win a contract. This includes accepting or paying bribes, unfairly estimating costs, or quoting unrealistically low prices to gain a job and then adding on extra costs once work has commenced, in order to make up costs. If you become aware that there will be additional costs, then advise your client and obtain their agreement before incurring those costs.”

As a result of this clause, MBIE has confirmed to Under Construction that Code of Ethics breaches can result in civil prosecution.

“If an LBP does not comply with their obligations, a complaint can be made against them, which may result in disciplinary action by the Building Practitioners Board,” said Duncan Connor, National Manager, Occupational Regulation. “Complaints which are specifically related to contractual matters should be progressed through the civil courts.”

A civil matter

Originally announced in October 2021, with a 12-month period before it came in, the Code of Ethics aims to ensure

that high standards are maintained in the industry. It also wants to give the public more confidence that LBPs are “reputable and operate ethically”, according to MBIE.

“Homeowners can have greater confidence that when they choose an LBP to undertake building work, they are doing so in a safe, legal and professional way, and that LBPs will take responsibility for their work.”

While the Code outlines new responsibilities for LBPs to follow, Connor confirmed that it does not supersede existing regulations.

“The Code includes responsibility to act within the law and reporting breaches of the law. In addition to complying with the Code of Ethics, LBPs should also be aware of and adhere to all the Acts relevant to them. 

“In addition to the Building Act, there are several other Acts that LBPs must adhere to. These Acts include the Health and Safety at Work Act 2015, which pre-dates the LBP Code of Ethics.”

MBIE said the Code of Ethics will also create a framework to discipline LBPs who behave unprofessionally.

“A Code of Ethics aligns the LBP scheme with international best practice. It also provides clear grounds for the Building Practitioners Board to take disciplinary action against LBPs, who behave unprofessionally. The Board is able to issue fines or cancel licences where necessary,” said MBIE. 

Industry reaction

The introduction of a Code of Ethics has been met with differing opinion. Speaking to Under Construction, Trident Homes franchisee Hamish Broomfield said he was behind its introduction but thinks it could be marketed better.

“I don’t think introducing an LBP Code of Ethics is a bad thing. I believe that if LBPs are doing something dodgy, they should get called out for it and held accountable. I understand that some people may think introducing a Code of Ethics would improve the public’s confidence in the scheme, but for that to happen the public has to be aware of it in the first place! For example, I’ve never been asked by a potential customer if I’m an LBP.”

Ben Allan, CEO of David Reid Homes, took a stronger view on its introduction.

“I think a Code of Ethics is a good idea and completely appropriate for members of a professional organisation. A Code of Ethics should be a key part of what you sign up for when you register to become an LBP and something official that you can be held accountable for is important.”

Meanwhile Sam Manson, the director of SMBC, reckons the Code of Ethics is redundant.

“I don’t feel that the LBP scheme needs a Code of Ethics. If you’re an LBP, you’ve already been through a rigorous process to join the scheme and that means you’re far less likely to be a cowboy or display unethical behaviour.”