There are many reasons for the gap. Developers tend not to pay for full technical drawings until after planning permission has been obtained. As the design develops, the pitch of the roof, the particular type of tile, the windows or doors may change to meet budgetary requirements, or simply because the client changes its mind.
Technically, the law does not permit any amendment to the planning permission.
Of course, most planning permissions contain conditions that allow things to change – for example, conditions that require the prior approval of the local planning authority if there are to be changes to the tiles, parking arrangements, landscaping, and so on. Providing such approval is obtained, then that approval is part of the planning permission and permits the amendments.
What happens if an amendment is not covered by a condition? In practice most planning officers "allow" minor amendments and, on request, will write a comfort letter to say so – although technically such a letter only amounts to a non-binding sentiment. But the difference between a minor amendment and a material amendment is a subject of judgment. If the planning officer does not agree that your amendment is minor then, technically, you are in breach of the planning permission. The only way of changing that is to apply for retrospective planning permission by way of a fresh planning application or, if circumstances allow, submit a section 73 application to change or delete a condition of the planning permission.
When the parties enter into the building contract, they may naively assume that any divergences from the planning permission are minor, only to discover later that the planning officer thinks otherwise. The risk in terms of costs and delay of having to submit an application for retrospective permission or a section 73 application should not be underestimated. It is therefore vital to ensure that the contract allocates that risk appropriately.
Where the contractor does not have a design responsibility, that risk is quite properly allocated entirely to the employer. However, the position is less clear-cut when it comes to design-and-build contracts. For example, it may be relevant whether the divergence from the planning permission was already present in the tender documents or whether it arose subsequently, either as part of the contractor's design development, or as a result of a variation instructed by the employer.
It seems clear that if the employer varies the works, the employer will have to take the risk of the resultant delay and cost, including delay or cost resulting from the need to make further planning applications. In other cases the contractor is best placed to manage the risk. Nevertheless, the JCT design-and-build form entitles the contractor to an extension of time and loss and expense resulting from delay in obtaining necessary planning approvals, a rare exception to the general rule that only acts or defaults of the employer entitle the contractor to loss and expense. Significantly, the new major projects form grants the contractor neither extension of time nor loss and expense for delay in obtaining approvals from the planning authority.
The only conclusion that can be drawn from the above is that there is no single view as to who should bear the risk of having to go back to the planning authority.
The problem with allocating the risk entirely to one party is that the other party may feel that it need not concern itself with the problem. However, the reality is that the planning process needs the active involvement of the whole project team. We may have something to learn here from recent initiatives on partnering and risk sharing. If the risk is shared, instead of being allocated to one party only, both parties should have an incentive to be proactive in identifying and resolving planning issues at the earliest possible stage.
Alan Erwin is a construction partner at Fladgate Fielder. This article was co-written by Moira Fraser, planning partner at Fladgate Fielder.