Monday 26 August 2013

Alternative (Construction) Dispute Resolution (ADR)

The term ‘alternative dispute resolution’ might originally have been applied to any method of resolving disputes other than litigation. Language changes and ADR is now commonly used to describe alternatives to any imposed, externally-regulated and binding system of resolving disputes.
It may mimic processes such as courtroom trials or arbitration hearings, or adopt wholly dissimilar procedures. There are formal protocols or codes of conduct available which can be followed if wished. (Guidance on this may be obtained from various bodies, of which the Centre for Effective Dispute Resolution, CEDR[1] is one, and reference may usefully be made to the Commission of the European Communities’ green paper which defines alternative dispute resolution as ‘out-of-court dispute resolution processes conducted by a neutral third party, excluding arbitration proper’.[2]).
Traditionally, alternative dispute resolution is entered into voluntarily and governed by agreement between the parties in dispute. More recently, ADRs which are conducted by the court or entrusted by the court to a third party (ADRs in the context of judicial proceedings), are taking on a greater significance in Europe. For example, pursuant to Rules 26.4 and 44.5 of the Civil Procedure Rules for England and Wales, which came into force on 26 April 1999, the court may suspend a case to allow the litigants to have recourse to mediation and can order the litigants to make financial penalty payments if they refuse mediation.
ADR can work well where all want a fair and equitable remedy – and badly where they do not. These voluntary and little-regulated processes can be disingenuously appropriated to obfuscate rather than resolve issues, so deferring the day of reckoning and delaying both technical and legal remedy. For this reason, non-binding dispute resolution procedures are useful only where those involved are capable of moderating self-interest with enlightened objectivity, in which the natural desire to avoid blame is balanced with the long-term benefit that comes from consensus rather than dispute.
Finding consensus between opposing interests, especially where the outcome is likely to be costly to one party, is difficult. It is useful for those involved to remember, when considering strict liability, that compromise over the cost of repair is often cheaper than litigation. If the parties can be persuaded that it is better to put their energies and money into resolution rather than dispute, alternative dispute resolution offers several tried and tested methods.

[2]Commission of the European Communities, Brussels, 19.04.2002, COM(2002) 196 Final Green Paper on Alternative Dispute Resolution in Civil and Commercial Law’.

Saturday 22 December 2012

Limitation of Design Liability

In a recent arbitration, almost 12 years after completion of a new-build, low-rise block containing flats, shops and communal facilities, a developer claimed against his builder for water damage.  The developer particularised the claim in terms of design defects with a few sweep-up allegations of poor workmanship.  The remedial scheme commissioned by the developer involved a redesign of that part of the building alleged to be at fault.  The developer sought compensation from the builder for the full cost of the remedial works.

The builder confidently rejected liability for the cost of correcting design flaws as the design was produced by the developer’s chosen architect whose design the builder had been obliged to accept.  
While the builder correctly understood how the design work had been undertaken, insufficient attention had been paid to the peculiar split between design liability and design duty under the building contract.  The builder had entered a modified JCT design and build contract.  This made the builder liable for negligent design while requiring the builder: to engage the developer’s architect, to implement the architect’s design and not to alter the architect’s design.  Thus the builder had liability for a design over which he had no control.  
The design, as evidenced by the drawings, was completed more that 12 years before the action was brought.  Practical completion was less than 12 years before the action was commenced.  The developer held that, as a builder’s duty continued until practical completion, the action was not statute barred.  The builder disagreed, holding that if the action was statute barred against the architect, insofar as the claim was for deficiencies in the architect’s design, it must also be statute barred against the builder.   The developer also argued that there was an implied continuing duty to review the design during inspections.  However the building contract did not include a requirement for, and the architect was not engaged to carry out, routine periodic architectural inspections during the works.

From the outset, reports by the project insurer’s surveyor, the occupant’s surveyor and the developer’s surveyor informed the legal proceedings and formed the basis for the remedial work, which was completed earlier this year.  It was while the case was approaching a hearing and after the remedial work was complete that I was invited to prepare expert evidence and still later that the developer obtained an expert report. 
I reported that the design was flawed (but not as the developer asserted) and that the developer’s remedial scheme was similarly flawed.   The developer’s expert advised revising the developer’s case and the builder, on receipt of the developer’s expert’s report, stated that it raised issues other than those pleaded and applied to have much of it struck out unless the claim were revised.  Such a late fundamental revision to the Statement of Case may have exposed the developer to a claim for abortive costs and the developer eschewed this advice and resisted the application.   The arbitrator was minded to allow the claimant’s expert evidence on the basis he could properly ignore any part of it which did not go to the pleaded issues.

Both parties, now close to a hearing, were in possession of expert evidence which put into question the validity of the claim as pleaded but which showed there was, subject to the Statute of Limitations, a viable claim.   The developer’s costs already exceeded the sum claimed and the anticipated costs to go to a full hearing would make the parties’ costs greatly exceed the sum in dispute.  The result was a compromise settlement following the experts’ meeting.  Regrettably, due to the legal costs incurred, the settlement left both parties out of pocket by more than the sum claimed.  A high price to pay for the experienced gained.  An earlier reading of the contract documents and appointment of experts could have brought the dispute to a cheaper, quicker and more effective resolution.

Wednesday 19 December 2012

Weatherproof Building?

When architects no longer coordinate designs and builders no longer accept responsibility for the building, how do you make sure a building is weatherproof?

 
From the outset of my career as an architect, I found it regarded as a normal and essential part of the architect’s role to coordinate the design team and integrate architectural, engineering and specialist designs into a working whole.  More recently, as a forensic architect, I find troubled projects where the project architect’s role is diminished, leaving no member of the design team with overall responsibility to coordinate the team and check the compatibility of each specialists’ contribution to the design.  This was brought out recently in a design and build project which leaks.  The general contractor blamed separately: the architect, the brick laying sub-contractor and the curtain walling sub-contractor for the failure.

Tuesday 24 July 2012

What is an architect?

A survey has found that the majority of British adults have little idea what architects do:

·         15% do not know that architects design buildings.

·         22% do not know that architects prepare detailed construction drawings for building projects.

·         48% do not know that architects prepare specifications to be used for building projects.

·         69% do not know architects negotiate planning permission with the local authorities.

·         72% do not know architects apply for planning permission.

·         74% do not know architects can deal with certification for building projects.

·         79% do not know architects can ensure that the construction site complies with Health & Safety legislation.

·         86% are not aware that architects select, negotiate with contractors and manage contracts.

·         91% do not know architects run the financial accounts for building projects.

Thursday 7 June 2012

Building Defects and the Law

I often find rather naive views on UK law relating to building defects published on the web.  I have collated some of these commonly held misconceptions, which I address below:

1. Compliance with Current Standards
Every kind of construction must be completed to current standards.”  Wrong!  British and adopted European Standards provide guidance and advice.  Generally they attempt to summarise a consensus of good practice.  Usually they represent the views of interested parties co-opted onto a committee.  Due to the time taken to produce a Standard it is, on average, about 7 years out of date when published.  They are not mandatory.  A failure to comply with them is not criminal.  Most importantly, following building standards does not ensure sound building or confer immunity from law suits.
2. Construction Law
At the heart of construction law are the building regulations.”  Wrong!  Regulation of building is to be found in a wide variety of statutes from the Town & County Planning Act to the Housing Grants, Construction and Regeneration Act.  The building regulations are, in their inception, health and safety provisions which have recently been widened principally to encompass some environmental concerns.   Their applicability and content are limited.
3. Building Regulations
These regulations set out precise levels of quality and competence that should be met within all construction projects.  Wrong!  Schedule 1 to the regulations provides performance requirements but does not prescribe quality and competence.  Approved documents issued under the regulations give technical guidance in the form of deemed-to-satisfy provisions.  Compliance therewith, however advisable, is not mandatory.
4. Construction Defect Law
Construction defect law exists to protect your building project from shoddy workmanship. Defect law also gives your builders clear guidelines they must follow. Wrong!  There is not a distinct law of construction defects.  There is limited regulation of workmanship standards under schedule 7 to the building regulations and certain habitability standards required under statute for residential housing.  They are primarily intended to protect residential tenants from the results of demonstrably poor work and will in limited circumstance only assist those who commission building work.
5. Regulation of Building Professions and Workers
You can hire designers, builders and tradesmen safe in the knowledge they are qualified to carry out the work you are paying them for. Wrong!  Architect alone is a protected title.  In contrast, anyone can lawfully trade as surveyor, engineer, builder, etc. or offer architectural services as long as they do describe themselves as an architect.  There is limited regulation of function covering certain installations such as gas fittings, which is intended to reduce the incidence of unsupervised unqualified persons working on certain defined hazardous installations.  

Those who are uninitiated into the complex mishmash of building qualifications defined variously as: registered, chartered, time-served, competent persons, etc. are unlikely to distinguish say between an architect, who by law must be qualified and registered, and an architectural designer, who requires neither qualification nor registration.   Much building in this country is performed by unregistered persons lacking appropriate formal qualifications.  When I am asked to investigate supposedly negligent architectural design, more often than not the designer was not an architect but the employer thought he was.  In a similar vein but at the other end of the scale, the worst gas pipework I have inspected was not installed by, or under the supervision of, a competent person but this did not have come to light until my inspection report was served. 
When I started in practice, design was usually provided as a separate service unconnected with the building contractor and the designers were retained to supervise construction as independent inspectors.  Builders worked in teams lead by experienced tradesmen.  On large schemes we had resident engineers, architects and/or CoW’s.  Self-certification by plumbers, etc. was unheard of.  Independent inspection was the norm.
Building regulations have moved progressively towards self-certification in place of independent inspection.   Procurement through design and build contracts tends to separate the employer from the designers so removing from him the once traditional team of independent consultants capable of expertly monitoring the work in progress.  Most standard forms of contract however deny the employer the automatic right to work which is reasonably fit for its intended purpose, so taking from him the greatest legal benefit a design and built contract would otherwise bestow. 

Defects are often more easily concealed than corrected.  The temptation to hide mistakes has always been there.  When at some future date concealed defects manifest themselves, expert inspection is required.  What constitutes competent building design, sound materials, and good workmanship is not defined in statute.  To claim compensation a combination of expert opinion and legal assistance is required.  To resist or pass on a claim more expert and legal opinions are often engaged.

If there were a statute providing overriding building defects law, all this might be brought to an end.  To draft such an all-embracing law to effectively consolidate and extend existing regulation would take unprecedented ingenuity.