Forensic construction is the application of science to decide questions arising from legal disputes over the way in which structures have been built; especially with regard to the type and quality of the structure, materials, and workmanship.
Monday, 7 November 2011
Insurance Policies Must Comply with the Governing Law
law, the principle that a contract must not contain agreements which are
contrary to law applies equally to a contract of insurance.This can cause insurers to have to pay out
very much larger sums than they anticipated:
A factory building was substantially damaged
by fire, causing extensive collapse. The local authority required the
reconstruction of the fire-damaged factory to comply fully with current
Building Regulations. The factory had been partially demolished by the fire to
ground level but parts of the structure were still largely intact.The building could – but for the Building
Regulations – have been rebuilt, retaining the parts of the factory which were
still intact, to the original standard of construction.This would have complied with the regulations
current at the time the building was built but not those current at the time of
the fire damage.
The local authority pointed out that, where a
building was to be reconstructed from within eight metres of the ground, the
Building Regulations would apply to the whole of the fabric including the
retained part and that the retained part would have to be brought up to current
Building Regulation standards. The result was, to all intents and purposes,
that the factory had to be rebuilt as a brand new building.
This increased the claim on the insurance by
about £1m. The insurers, an American company, were not familiar with this
peculiarity of English Building Regulations and had not foreseen, in setting
the premium for the insurance, their exposure to this risk.They nevertheless could not insist that they
had a right to limit cover to the cost of reconstruction to a standard below
that required by statute and so accepted that they would have to pay for a new
building which complied fully with the Building Regulations but which was
otherwise the same as that which had been fire damaged.