Out-Law / Your Daily Need-To-Know

Why UK contractors need to rethink building design modelling

Out-Law Analysis | 15 Mar 2021 | 10:03 am | 3 min. read

Contractors in the UK construction industry, and elsewhere, are assuming increasing levels of liability for the output of building designs – effectively having to guarantee that a building can be used for its intended purpose over its life.

This should prompt contractors to rethink the modelling of designs to give them greater comfort over the risks they take on – and what provision is made for this in the contracts and subcontracts which they are party to.

McMillan Frazer

Fraser McMillan

Partner

We are in the position now where we have lost sight of the overall purpose of the building, and what undertakings contractors give to achieve that purpose

It is common for the genesis of a construction project design to be a hybrid one. It will start with the employer setting out what it wants from the project, often going quite far down the design road. Then the bidding contractors have to say where they want to take the design next. Contracts are concluded on this basis and the contractor – with design and construct responsibilities – has to finish the design job.

Responsibility for design has commonly arisen in either one of two contexts in the UK construction sector.

Either contractors are required to develop a design and submit their plans for review by the employer or its nominated scrutineer, or an employer – or another party acting on their behalf – will prepare a design themselves.

With contractor designs, the contractor cannot start work based on the design until the employer has finished the review process. However, the fact the employer will review the plans will not absolve the contractor from liability arising from defects in the design.

With employer designs, the contractor is required to integrate its design with the design prepared by the employer. The employer will frequently take no responsibility for its design and the contractor will be required to use the employer's design at its own risk. Under this scenario the contractor is expected to have been able to analyse and satisfy itself as to the employer's design and to have priced and planned accordingly – often in the context of a competitive tender process and to associated accelerated timescales.

Where design responsibilities fall to contractors, they will be under a duty to exercise "reasonable skill and care" in undertaking their design work, but only if their contract expressly says so. Many standard form agreements do not have this as the contractual starting point. Seeking to achieve a reasonable skill and care standard often becomes the focus of many contractors' attention when negotiating the terms of their design contract. However, contractors can be held liable for a design if a building is subsequently shown to be not fit for purpose, even if they have met their 'reasonable skill and care' duty.

Historically, there has been a dichotomy between the standard of reasonable skill and care and the much higher standard of fitness for purpose. However, the lines have become more blurred in light of recent court rulings. It is now widely acknowledged within the industry that different design standards can apply to different aspects of the design under a single contract. So, an overarching duty to exercise reasonable skill and care can exist in parallel with a specific fitness for purpose obligation, say to achieve a particular 'design life' – that is, the period for which a component of the building is expected to achieve its purpose for.

This makes the task of defining the output of a building design important, since this will necessarily help contractors understand the extent of their design obligations and potential liabilities. Clearly and specifically doing so is challenging, however. This is especially so where these 'fitness for purpose' obligations can be hidden in technical requirements in the contract.

Hart Jonathan

Jonathan Hart

Partner

Design output will comprise a combination of components which together seek to achieve the purpose of the building. Contractors must ensure that the choice of those components takes into account how the building will be used and, crucially, how it will be maintained

We are in the position now where we have lost sight of the overall purpose of the building, and what undertakings contractors give to achieve that purpose.

Design output will comprise a combination of components which together seek to achieve the purpose of the building. Contractors must ensure that the choice of those components takes into account how the building will be used and, crucially, how it will be maintained.

The courts have established that a building can have many different components each with different design lives. The environment the building will exist in is a factor that will be relevant to its design life and the level of maintenance it will require. There are therefore a lot of variables to consider and the contractor may have different obligations for each. This is unsatisfactory. It fails to take account of the inter-relationship of components, the context for the whole building and the manner in which the whole building is maintained. It is that 'whole building performance' which is critical to the employer too.

A better approach may be to model a design in a way which:

  • takes account of the design inputs from multiple sources;
  • takes account of the site-specific circumstances of the design;
  • models how different components will perform in use;
  • gives transparency about the level of maintenance that would be required; and
  • is capable of being updated with real-world data to test the assumptions made in the design and to monitor performance.

The result may be a warranty that is easier to give, and data that helps monitor compliance. 

Design liability is one of the topics that was addressed during the Pinsent Masons global infrastructure law review of the year series of events. The events addressed both sector-wide pivotal issues of global impact and local construction law issues affecting the infrastructure industry.