MBIE clarifies private BCA liability

MBIE has clarified how liability will work for Building Consent Approvals Limited (BCAL), which is due to become New Zealand’s first private company accredited to issue building consents  

Subject to assessments to ensure BCAL complies with the Building (Accreditation of Building Consent Authorities) Regulations 2006, the Canterbury-based company is on course to become the first private company in New Zealand to issue building consents. 

Despite some reporting to the contrary, Under Construction has learned that BCAL cannot yet issue building consents. BCAL’s application to be registered as a standalone building consent authority was conditionally approved by MBIE on 24 May 2025 and, as of 17 June, the conditions had not yet been met. 

Civil liabilities covered 

Part of the assessment by MBIE includes ensuring the company can cover any civil liabilities that may arise in performing consenting function. This doesn’t necessarily include insurance, MBIE Head of Building System Delivery and Assurance Simon Thomas said. 

“To demonstrate it has adequate means to cover civil liabilities, a standalone building consent authority can rely on whatever methods it chooses, and MBIE’s role is to assess whether effective consumer protection is provided. 

“The Building Act does not prescribe methods for meeting this requirement. The specifics of how BCAL was able to meet the test are commercially sensitive but rely in part on insurance.” 

Thomas added that MBIE was satisfied that BCAL would be able to pay out in the event of multiple claims being laid against it. 

“MBIE’s assessment of BCAL’s ability to meet civil liabilities that may arise in its performance of its functions as a building consent authority included being satisfied that those protections continue in the event BCAL ceases operating as a BCA for whatever reason.” 

Thomas said that the Act requires ongoing monitoring of whether the requirements for registration (including meeting liability requirements) continue to be met if circumstances change. 

Systems in place 

Regulations require all BCAs to have systems in place for notifying MBIE and International Accreditation New Zealand (IANZ) if there is ‘a significant change in the legal, commercial, or organisational status of the building consent authority or the wider organisation in which it operates’ (regulation 6A), as well as a range of other changes. In addition, regulation 6A(2) places greater notification requirements on standalone BCAs. 

“Once BCAL is registered, MBIE and IANZ will be regularly monitoring it to ensure it is continuing to meet the ongoing requirements for accreditation and registration,” said Thomas. 

“We have agreed mechanisms with BCAL, which require them to notify MBIE in advance if they are considering material changes which might have an effect on consumer protections.” 

Thomas said that BCAL would be monitored by MBIE and IANZ more regularly than the prescribed timeframe (once every three years for MBIE, once every two years for IANZ). Previous reporting in The Press said BCAL would be audited every three months. 

“[MBIE and IANZ’s monitoring] is so the relevant statutory requirements can be assessed against BCAL’s performance of functions as a building consent authority. Our understanding is that the three-monthly auditing mentioned in the article is a reference to arrangements BCAL has made itself,” clarified Thomas. 

In a radio interview with RNZ, BCAL’s chair Tony Sewell revealed that they would be “heavily supported” in their operations by a third party called Building Solutions. In response to Under Construction asking what that meant in practice in terms of liability, Thomas said that, if a Building Solutions employee completed an inspection that was found to have faults in it, liability would be established by the courts through contract and tort law. 

“First and foremost, contractors must recognise that in many circumstances they may be held contractually or legally responsible, or both, for the quality and safety of the work carried out by their subcontractors,” said Ben Rickard, Director & Construction Insurance Adviser at construction insurance experts Builtin.  

“This responsibility cannot necessarily be mitigated by simply selecting reputable subcontractors or including indemnity clauses in contracts. Just as you cannot outsource your responsibility for health & safety, the courts have indicated that in many situations you can’t outsource your responsibility for compliance with the Building Code either.”