When something goes wrong in a construction project and it’s blamed on the “design”, who is liable — the architect? Surveyor? Contractor? Client? Roland Finch investigates.
When construction work is needed, the traditional approach is to appoint somebody to design it and somebody else to build it. Once that is done, the eventual building owner (client) will either maintain and operate it themselves or get someone to do one or both on their behalf.
Sometimes the person or organisation that designs something, builds it too — and in certain arrangements, the designer/builder also maintains and operates it in return for a fee. An example of this is the UK Government’s Private Finance Initiative (PFI).
If something goes wrong, it’s usually a fault in the design or the construction or the operation, and the responsible party is relatively easy to find.
So far, it all sounds quite straightforward but, as you might expect from the construction industry, it’s rarely as simple as that.
Who is the designer?
For a start, lots of different people have an input into the design. The Construction (Design and Management) Regulations 2015 (CDM) define “designer” to include:
“Any person (including a client, contractor or other person referred to in these regulations) who in the course or furtherance of a business:
prepares or modifies a design; or
arranges for, or instructs, any person under their control to do so
relating to a structure, or to a product or mechanical or electrical system intended for a particular structure, and a person is deemed to prepare a design where a design is prepared by a person under their control.”
The regulations go on to say that design can comprise: “Drawings, design details, specifications and bills of quantities (including specification of articles or substances) relating to a structure, and calculations prepared for the purpose of a design.”
It’s easy to see, therefore, that the scope of “design” can be quite wide. People contributing to the design could include architects, surveyors, consultants, contractors, subcontractors and even the client.
In reality, of course, the question is less about who carries out the design than who takes ultimate responsibility for it. As we’ve already noted, the usual reason for that is to identify who gets the blame if something goes wrong. On the positive side, however, the advantage of identifying who carries the liability for the design means that in the normal course of events, that person can take out insurance against any claims that may be made against them in respect of that liability.
Allocation of liability
There are three main ways by which responsibility for design can be allocated.
By statute: the laws passed by Parliament. These are divided into Acts, such as the Health and Safety at Work, etc Act 1974 and regulations, like CDM. As noted earlier, CDM identifies people who may be designers for construction operations, and sets out their duties under that legislation.
By common law. Common law is the branch of law that comes about from decisions given by judges in the courts, rather than statute law. Common law imposes obligations on the party responsible for the design, which if breached, will usually entitle the “wronged” party to some kind of restitution, usually in the form of damages. The legal doctrine under which this occurs is called “Tort”, usually, in these cases, the tort of negligence.
Perhaps the most well-known negligence case was in 1932: Donoghue v Stevenson, where it was held that Stevenson owed Donoghue a duty to provide a product of a certain standard. Stevenson was negligent in that duty, and damages were awarded. Although the case itself was not about construction, it is fairly easy to see how the principle can be applied to a designer — a designer owes a duty to their client that the design will meet a certain standard.
Under the express terms of a contract. A contract is essentially an agreement (which can be written or oral) containing a set of promises that each party undertakes to carry out. If one of those promises is to carry out design — or more commonly, to take responsibility for it, then that term may be enforced through the courts.
Levels of responsibility
At this point, it is important to clarify not only who is going to take responsibility for the design, but also the extent of that responsibility.
In the UK there are two generally accepted levels of design liability. The first is “reasonable skill and care”. The Supply of Goods and Services Act 1982 requires that unless their contract contained explicit terms to the contrary, the supplier of a service has to do so with reasonable skill and care. This is supported by case law — in particular the 1957 case of Bolam v Friern Barnet Hospital, where the judge set out in his summing up that a professional person is not negligent if they carry out work “to the same standard that another reasonably competent member of his profession would have done”.
The second — and more onerous requirement — is the obligation of “fitness for purpose” (FFP).
FFP has its roots in the Sale of Goods Act 1979, under which suppliers of goods give an absolute guarantee that their products will do the job they are sold for — eg a door will act as a door, and a window will act as a window.
This can have serious implications for a designer of a building if they are expected to provide a similar guarantee for a whole building, rather than simply undertake that they will use reasonable skill and care.
Crucially, there’s a big difference when it comes to professional indemnity (PI) insurance. Most PI policies will only provide cover for claims arising out of the insured’s negligence. Under FFP, the standard is one of fact, so it isn’t necessary to show negligence. It is easy to see why designers (and their insurers) would wish to avoid this additional burden.
It is perhaps worth noting that where the liability is allocated in the building contract, especially as part of a design and build arrangement, there is a tendency to include an FFP obligation. Many “standard” building contracts will contain both as an option, so it is important to check which one has been selected.
Case law has determined that in the absence of a specific requirement, the default will typically be FFP, presumably on the basis that the builder doesn’t count as a professional designer — notwithstanding that the contractor’s in-house designer almost certainly will be.
In any event, if a client sets out in the specification what is required in respect of a particular function of the finished work and also that they are relying on the contractor’s skill and judgment, then there it is possible for an FFP obligation to be implied.
It is therefore essential to check the precise wording of the contract itself, because there are many different ways FFP can come about, inadvertently or otherwise, especially where a standard contract has been amended.
For example, in August 2017, the UK Supreme Court ruled in the case of MT Højgaard A/S v E.On Climate & Renewables UK that the contractor had an FFP obligation even though the third-party standard they were asked to design to contain an error. The case surrounded the construction of a windfarm at Robin Rigg in the Solway Firth, where it was held that the requirement to design foundations with a working life of 20 years was an FFP obligation. The result of that judgment involved remedial costs of over £20 million, so the consequence can be severe.
Most people have a view on design quality, even if they are not sure why. At the same time, not everyone has an understanding of the design process.
However, few outside the legal profession have a detailed understanding of the complications and potential pitfalls of getting the design responsibility wrong. It is easy to assume that because design is carried out by someone, they have overall responsibility for it, but the building contract may say something different. And since the remedies will ultimately depend on who has liability, and their contractual relationship with the person bringing the claim, it is definitely worth checking, as mistakes can be very costly indeed.
Roland Finch BSc, FRICS ACI Arb, is a technical author for the National Building Specification (NBS), specialising in preliminaries. The views are his own.