The Holmes and Hills Construction Division frequently review contracts for both main contractors and subcontractors and one of the major areas of concern for parties is design liability. In this article construction solicitor, Abbie Chisnall, and trainee solicitor, Jess Munday, look at design liability and what it means in the Construction Industry.
A construction project typically involves many parties who are responsible for design or elements of design. Professional consultants, such as architects and engineers, will typically propose a design for their client and the project will be built according to that. During the build process, it is common for the contractor and sub-contractor to take on design responsibility either designing parts of the project themselves or confirming that the proposed design by consultants is suitable.
When entering into a contract with design, i.e. a standard JCT Design and Build, do you know what your design duties are?
A design duty is an absolute contractual obligation imposed on a party to ensure that, firstly, the project is delivered to a standard which is fit for purpose and that, secondly, the project has been designed in a manner that is strictly in accordance with their clients’ wishes and specifications.
The two most common standards of design liability are reasonable care and skill and fitness for purpose.
An obligation to use “reasonable skill and care” is carrying out works in a way that a reasonably competent member of the same profession would have done. In effect, this means that a party will not be liable for a negligence claim if they can prove that they acted in a way which is akin to industry standards and acted the same as a professional counterpart would have done.
A “fitness for purpose” obligation is a much higher duty than the duty to act with reasonable care and skill, as a designer may still be found liable for any design defects, even if they had exercised reasonable skill and care.
The relatively recent case of MT Højgaard A/S v E.On Climate & Renewables UK Robin Rigg East Ltd  UKSC 59 demonstrates that there is an obligation for a designer to “identify any areas where the works need to be designed to any additional or more rigorous requirements or parameters” according to the purpose for which they are designing the project. This case was in relation the design and build of offshore wind turbines.
This contract contained stricter design requirements than reasonable care and skill and therefore Højgaard was found responsible for design defects even though it had met its obligations around reasonable skill and care and complied with relevant industry codes.
It should be noted that the design duties in this contract were not express terms and were merely implied. The design specifications (the “fitness for purpose” terms) were annexed to the contract and were loosely referenced in the main body of the contract. Even though they were not written as an express term, this was enough to imply and incorporate this absolute obligation into contract.
This highlights the importance of having a contract reviewed holistically by legal experts, as the obligations will not always be obvious. The Construction Division at Holmes & Hills routinely undertake contract reviews, which would flag up the clauses to be noted, the clauses that have a level of commercial risk and the clauses that are highly onerous and that are advisable to negotiate or remove. We can also explain any design liability you may have and discuss whether you could be caught by the more onerous “fitness for purpose” obligations.
Other articles in the series: