4. Deputy Cian O'Callaghan asked the Minister for Public Expenditure, Infrastructure, Public Service Reform and Digitalisation if he will take action to address the issue of special purpose vehicles being used to avoid future liability in public construction contracts; and if he will make a statement on the matter. [27625/26]

Sentiment score: -0.02

Ba mhaith liom ceist a chur ar an Aire faoi thionscadal tógála poiblí. When multiple parties contribute to a project but only one still exists years later and when something goes wrong, that party can be held liable for 100% of the cost even if it is only 1% responsible. Developers nearly always use special purpose vehicles and then wind them up, which means they are let off the hook, meaning architects and engineers are sometimes left to pick up the bill that could put them out of business. Has the Minister looked into this structural issue? Does he have any plans to address it?

Sentiment score: 0.18

I know this issue has been looked at and some work has been done on it, but it has not been addressed to the degree that is necessary for architects, engineers and small firms. They are still being caught by this. They are still not able to go in for projects, cannot get insurance and insurance costs are prohibitive. I recently met with representatives of the Association of Consulting Engineers of Ireland who told me how this is driving up costs and driving small firms away from public projects. As the Minister knows architects and engineers do not operate using special purpose vehicles to avoid accountability. They are usually small to medium-sized businesses and are being pushed to the brink because of crippling costs. These costs are ultimately passed on to the taxpayer when it comes to these big public projects if they are not able to bid or if their costs have increased. Insurers already exit the Irish market because of this exposure. The insurer AIG told an Oireachtas committee that the 1% rule was the key reason it withdrew from engineering professional indemnity cover. The result is higher premiums, reduced competition and engineering firms avoiding these public contracts. I urge the Minister to act on this.

Sentiment score: -0.05

I think, based on the Minister's comment, that he accepts there is a problem here and I ask him to look into it further. The engineers are not raising this for no reason; it is because they are experiencing a very real problem. There is a solution to this which is to insert net contribution clauses into public contracts. That would not increase risk for the State and would simply prevent smaller contributors from being forced to absorb the full cost of defects caused by others. It would not remove any liability but it would ensure fairness in how liability works. England, Scotland and Northern Ireland use these clauses routinely. The Civil Liability Act already allows for it. Section 35(1) explicitly recognises that parties may enter contracts limiting liability to their just share. The legislative basis is there but we need the Government to put it into action. Net contribution clauses would make public contracts more attractive, stabilise insurance costs and help ensure that engineering firms remain willing to tender. It would really help us to deliver the housing and infrastructure that we need. Will the Minister look further into this? Does he accept that there is a problem here?

Sentiment score: 0.08