Season's greetings



With thanks to all who have worked with us in 2011 we wish you a properous and happy new year

THE DUTY TO REVIEW DESIGN

There is case law which suggests an architect or engineer has an ongoing duty to review their design.

The architect is under a continuing duty to check that his design will work in practice and to correct any errors which may emerge.  It savours of the ridiculous for the architect to be able to say: ‘True, my design was faulty but of course, I saw to it that the contractors followed it faithfully’ and to be enabled on that ground to succeed in the action.[1] 

There is authority that duration of the duty continues beyond practical completion until the works are truly complete.[2]

PERSONAL AND COMPANY LIABILITY

Individuals who are members of companies may, through their actions, create liabilities – both on the companies and on themselves.  This is true also of individuals who work for partnerships.

Insurance policies will generally be taken out by companies or partnerships rather than by individuals.  These policies, which protect the companies or partnerships, will not necessarily automatically provide the same protection to the members of the companies and partnerships – whether they be principals, employees or owners. 

For this reason, some professional organisations advise and/or require their members to be expressly covered by the insurances taken out by the organisations for whom they work.  Even where this is in place, the insurance cover is unlikely to extend to protect individuals when acting in their own capacity rather than on behalf of their company, etc.

Therefore, professionals who give advice not in pursuit of a commission given to the organisation with which they work may expose themselves to liabilities for which the insurance taken out by the company or partnership offers no protection.

Insurance Cover for Construction?

It is sometimes not enough merely to see that insurance is in place, it is important also to know what is covered by that insurance.

An example of inappropriate insurance came to light when a major building-products manufacturer undertook the role of main contractor in remedial works to a refurbishment project.  Their building system and materials had been used for the refurbishment work, but performance when finished was flawed.  Believing the faults lay in the site work, not in their products, they undertook to confirm this to the building owner by implementing repairs. 

They ably set about correcting the installation.  This done, the work failed.  They had created an excellent test bed for a relatively new product.  By minimising workmanship error and having full control over design and materials, they had ensured there was a full-sized example of their building system, which was correctly set up and exposed as intended to the elements.  This was a much more robust way of evaluating the system than the laboratory tests and computer modelling upon which all had hitherto relied.  The failures were limited and allowed specific flaws in the computer modelling to be identified, with benefits for the future development and use of the system.

Building over the boundary

A development in Worcester was hemmed in by surrounding properties.  For maximum return, the development was taken to the very edge of the legal boundaries.  To prevent dispute, the foundations were designed not to cross the boundaries into the land of those neighbouring owners who were opposed to the development.  This created difficulties in construction. 

The site team did not appreciate the significance of this aspect of the design, particularly as the legal boundaries were to them nought but invisible concepts passing though muddy excavations. In constructing a basement, the builder ran the bottom layer of concrete wide of the site boundaries.

Exclusion Clauses

The doctrine of privity poses particular problems for exclusion clauses in contracts. 

Exclusion or limitation clauses may exclude or limit the liability, for a specific breach or negligent act, of a contracting party to those it contracts with. 

It is sometimes desirable to extend an exclusion clause to parties outside the contract. For example, a company may wish to protect contractors that it employs.  On the whole, however, privity of contract acts to restrict the effect of such clauses on third parties.

A manufacturer of cladding and roofing materials sells its products through builders’ merchants, under a contract of sale which excludes liability for consequential loss and limits liability in any event to the amount paid to them for their materials.

Part of their cladding cracked after it had been installed on a building.  The building owner, the employer under the building contract, sued the contractor who, in turn, sued the cladding subcontractor, and so on down the contractual chain until the action reached the manufacturer.

At the same time, the owner brought an action against the engineer who designed the building. 

Insurance Policies Must Comply with the Governing Law

Under English 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.

Building Insurance

There is clearly a distinction between a building component wearing out naturally and failure due to a defect.  When seeking insurance cover it is necessary to be clear which eventualities are to be covered.

Several USA school roofs failed in sub-zero temperatures within two or three years of the expiration of the ten-year warranty period.  The contractor had assured his client that the roofs had service lives of 15-20 years.

The roofing was in pvc sheets, which shattered in sub-zero temperatures.  Pvc roofing contains plasticizer, as otherwise it would be rigid and lack the elasticity and plasticity required to accommodate movement without fracture. 

Plasticized pvc, to retain its flexibility, needs stabilisers and inhibitors – otherwise the volatile plasticizers will gradually be lost.  These roofs failed after the expiration of the warranty period but sooner than expected, due to gradual plasticizer loss.

The school board sought to recover from their insurers.  The insurers accepted liability for consequential damage but not for the cost of replacing the defective roofs themselves, arguing that the loss did not arise from a fortuitous incident.[1]  The insurers contended that the failure was inevitable at the time of construction, and therefore not covered by the policy. 

It was found, as a matter of fact, that failure was not inevitable – two such roofs having survived.  Further, the terms of the policy did not expressly exclude liability in these circumstances.

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[1] A loss is ‘fortuitous’ if it happens by chance or accident, occurring unexpectedly or without known cause.

Product Insurance

Technological developments make reliance on design advice from manufacturers, suppliers and specialist contractors increasingly necessary.  Employers all too readily look to the insurance policies of the traditional design consultants.  It would be advisable for these consultants, where they rely on specialist advice obtained from others, to advise on the need for each party to hold suitable insurance cover.

Suppliers are more likely to have insurance against the risk of their products being found not to be fit for purpose than for design.  Thus, where a supplier is brought into the design process, it would be advisable to check that suitable insurance is in place. 

A difficulty with a supplier and their insurers has recently arisen because of the supplier’s contribution to the design of a building. 

The product they supplied was not fit for its purpose because it was wrongly selected, not because it was badly made or due to faults in the materials used.  The supplier had been involved in the design development and, through the advice they gave, had directly caused the error in selection of the component they supplied.  Their insurance did not provide indemnity for errors in the design of the buildings which used their products but would indemnify them for errors in the design of the products themselves.  The sum in dispute is large and the supplier is resisting the claim because his insurance is inappropriate.  Had the nature of their insurance been looked into earlier, appropriate insurance cover could have been obtained.

Civil Liability (Contribution) Act 1978

The Civil Liability (Contribution) Act provides, subject to certain other provisions, ‘any person liable in respect of any damage suffered by another person may recover contribution from another person liable in respect of the same damage.’ [1]  
Subject to the exact meaning of ‘the same damage’ this gives a wide scope for actions for damages being brought against architects, engineers and the like by people they have not even met – let alone contracted with.

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[1] The Civil Liability (Contribution) Act 1978, s.1 (1).

Law Reform (Contributory Negligence) Act 1945

The architect’s, engineer’s, builder’s etc. liability to the employer for negligence may be reduced to the extent that the employer has also been negligent and, in so doing, has contributed to the damage suffered.  This arises under the Law Reform (Contributory Negligence) Act 1945.

Where any person suffers damage as the result partly of his own fault and partly of the fault of any other person or persons, a claim in respect of that damage shall not be defeated by reason of the fault of the person suffering the damage, but the damages recoverable in respect thereof shall be reduced to such extent as the court thinks just and equitable having regard to the claimant's share in the responsibility for the damage [1]

It is well established that this applies to claims in tort.  It may apply to a breach of a general duty of care under a contract, which duty is the same as would exist in common law, but it most probably is not applicable to a claim in respect of a breach of a strict contractual duty: ‘Provided that this subsection shall not operate to defeat any defence arising under a contract’.[2]

It does not alter the effect on any claim of the Statute of Limitations:

Provided that where any contract or enactment providing for the limitation of liability is applicable to the claim, the amount of damages recoverable by the claimant by virtue of this subsection shall not exceed the maximum limit so applicable.[3]

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[1] 130 Law Reform (Contributory Negligence) Act 1945 (8 & 9 Geo. 6 c. 28) s. 1 (1).

[2] Law Reform (Contributory Negligence) Act, 1945 1945 (8 & 9 Geo. 6.) c 28 s.1 (1) (a).

[3] Law Reform (Contributory Negligence) Act, 1945 1945 (8 & 9 Geo. 6.) c 28 s.1 (1) (b).

Privity of Contract

A well-established principle of contract law is that only the parties to the contract can make claims against it. 

Dunlop sold tyres to Dew & Co., with a term in the agreement that Dew would not sell more cheaply to anyone else, and that Dew would not enter into a contract with anyone else except on the same terms.  Dew sold tyres to Selfridge at the stipulated terms, but Selfridge sold them more cheaply.  Dunlop brought an action against Selfridge, which failed on the basis that Dunlop had no contract with Selfridge, and was not a party to the contract which had allegedly been breached.

Presumably Dunlop could have taken an action against Dew, who in turn could have taken action against Selfridge.[1]

Clearly, it is fair that people should not incur obligations in respect of contracts to which they are not party and which offer them no benefits.  However the principle of ‘privity’ does mean that it is difficult to enter a contract that benefits a third party without taking out a separate contract with the third party. 

Woodar contracted to sell some land to Wimpey for £850,000 on the understanding that £150,000 would be paid to a third party on completion.  Wimpey backed out of the deal without paying any money, leaving Woodar to make a claim under the contract.  This they could not do, because Wimpey pointed out that Woodar would have no claim on the £150,000 (privity), and the beneficiary of this money would have no claim as there was no contract in place to support it.[2]

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[1] Dunlop Pneumatic Tyre Co Ltd v Selfridge & Co Ltd [1915] AC 847.

[2] Woodar Investment Development Ltd v Wimpey Construction UK Ltd [1980] 1 WLR 277, [1980] 1 All ER 571.

Roof Slates Melting in the Sun

A manufacturer produced an imitation Welsh roofing slate using slate particles bonded together with resin.  The manufacturer had the product independently tested by a reputable independent body and published the results.  The tests showed his man-made slate to be a serviceable product.

In time failures became apparent.  Initial inspection of one poorly performing roof showed many slates to have concave curves, and the tiling to be loose.  It was decided to re-roof with the same materials, which the slate manufacturer agreed to provide free of charge. 

The remedial work commenced in early summer. 

An Adjudicator Takes Advice Which He Does Not Follow

An adjudicator telephoned an expert to ask about the correct method of constructing a sand-and-cement floor screed.  The case the adjudicator was considering involved the incorrect placement of a reinforcing mesh in a screed. 

The expert described to him the alternatives which would have ensured correct construction.  The expert gathered from his conversation with the adjudicator that the mesh was generally laid below the screed but was in some places poking out from it.  No other fault was reported.

An Arbitrator Takes Advice

Ordinarily a tribunal – whether judicial, arbitral or adjudicatory – may obtain technical advice at need through the appointment of experts.  In this way, the tribunal need not contain members who are personally familiar with all aspects of the type of construction which is in dispute.  Expert witnesses may assist the tribunal properly to understand the technical matters they are asked to decide.  Expert witnesses are distinct from witnesses of fact in that they are allowed to provide evidence of opinion. This may involve interpretation and reliance on hearsay.

Arbitrators and adjudicators have taken expert advice outside the formal boundaries of the tribunal over which they preside. This happened quite recently where an arbitrator, outside the hearing, telephoned an expert for technical advice.

Defects often arise because the designer focuses on the finished product to the exclusion how it is made

It is fundamental to good building practice that the design takes into account the process of construction.  Concrete, for example, is unlikely to be built as a monolithic mass.  Each part of a concrete structure will be limited to that which can be built in a single working day.  If the inevitability of day joints is considered in the design, their effects on strength can be controlled.  It is less certain that their effect on the watertightness of the concrete can be controlled, but good design – which takes into account construction techniques – can greatly reduce the risk of impaired performance.

Good communication between designers and building workers helps to resolve problems.  Some designers’ lack of practical knowledge is all too apparent to site staff when they are asked to work from ill-conceived drawn details.  This encourages building workers to pay scant regard to detailed designs and to implement their own ideas of how to build, working round what they see as bad designs rather than discussing them with the designers.  This is particularly common in design-and-build contracts where the builder stands to gain no contractual advantage from drawing attention to design defects.

During an investigation of a dispute between a Dutch contractor and manufacturer over a new partly built factory, the project engineer’s drawings were studied.

Trying the Expert

As many practitioners know, disputes rarely go the distance limiting opportunities for expert witnesses to speak before a tribunal. For over 2 decades it has been my experience that well presented evidence helps to bring disputes to a close without the need for a hearing. But recently I found myself presenting evidence under cross-examination in the Technology and Construction Court twice in quick succession.

The first dispute arose out of deficiencies in underpinning and other works carried out in breach of a party wall award. The second was a dispute over the quality of built work - mostly various pavements.

In each case, I, an architect, was ranged against engineers. In both trials the opposing barristers sought to dismiss my evidence not on its merit but on the presumption that an architect is no expert in building technology. Some may suppose architects do no more than visualise concepts (or ‘colouring-in’ as some colleagues put it) but I was more than happy to be put to the test and demonstrate that we know whereof we speak.

Piling into brown fields

the drainage connected to the buildings stays in place as the ground settles exposing once flush gulleys

Building and ground part company as voids form between ground and undersides of ground floors

  Horizontal fissures forming over d.p.c.'s as brickwork bows and arches

Brickwork over d.p.c. sliding out at external corners with stepped cracking below

Fissures running between window and door openings in brickwork

 

Near vertical cracking close to corners

Dry lining being torn apart as the masonry fractures

Building over deep landfill can be perilous.

If the piles work, the buildings stay up as the roads paths and gardens settle.

Long piles can settle and deflect unevenly causing enough differential movements to crack rigid superstructures, jamb doors and windows and tear internal wall linings.

Adding to this site's troubles, brickwork without any movement control joints adds another cause of cracking.

extensions on conventional concrete rafts float away with the sinking ground tearing themselves off the piled buildings

Defect free building is as much a matter of understanding client goals as it is of achieving competent detailing and construction

The Brief
A successful project starts in good co-ordination and the development of an effective brief.  Briefs evolve with

ArchiFACT Ltd Celebrates 2010 - 2011

At ArchiFACT we are celebrating the completion of our first year of trading and we would like to offer our best wishes to all of our clients and those who have worked with us, helping to make this year a success

Third Party/Section 20 Actions

Often, in connection with building defects, reliance on information conveyed by manufacturers is cited as a cause. For example, a material or product may be specified because of the representations made by the manufacturer or supplier about its qualities. The product once bought may be found to be unsuitable and the sales literature to misstate the product’s qualities.

Building owners making the claim may have no contract with the product manufacturer. They may nevertheless, either directly or through their design team, have placed reliance on the representations made by the manufacturer.

‘State-of-the-Art’ defence

‘State-of-the-art’ may be defined as the current stage of development of practice or technology, involving the use of the latest techniques or equipment. It often involves the first or early use of materials or techniques before they have been proven by long practice. There is inevitably a risk in being one of the first to use something new. This risk may reduce in time as use reveals the weaknesses inherent in each development. Thus, with practice, the flaws in that which was innovative are discovered. Growing familiarity with each state-of-the-art development provides the knowledge base to improve reliability and avoid error.

Oral and written contracts

Whilst, strictly, an oral agreement is as binding as a written contract, dispute is more likely and proof more difficult where the paperwork is deficient or non-existent. There is often merit in the old saw: ‘an oral contract is worth the paper it is written on’.

Many builders are far keener to start on site than they are to prepare paperwork. This is frequently true of domestic projects where householders, lacking prior experience in building work and unassisted by qualified professionals, are seduced by the self-assured approach characteristic of many jobbing builders. It is easy to be swept along by builders’ general relaxed air of confidence into not worrying over the unknowns of building work. It is, after all, reassuringly routine ‘bread and butter work’ to builders while they are talking the job in.

Where householders seek the formalities of standard written contracts, they are likely to be assured that ‘no one else asks for that’ and to be solemnly advised ‘that contract stuff makes the job cost more’.

Then the unexpected occurs and causes delays, unforeseen costs and defects – with resulting dissatisfaction and dispute.

Fixed-Price Building Contracts

It is a common desire for clients to fix in advance the cost, quality and scope of a building project.

If complete certainty is required, a simple lump-sum agreement may be appropriate, but most standard forms are unsuitable as they provide mechanisms for revaluing the payments due. Before they enter into a building contract, it is wise to ensure employers fully understand the scope for costs to vary.