The Roles of the Architect, Engineer and Quantity Surveyor

PAM CPD LECTURE David Cheah 8 September 2012 THE ROLES OF THE ARCHITECT, ENGINEER AND QUANTITY SURVEYOR 1. 1.1

Introduction Architect

“An architect” was defined by the court in R v Architects’ Registration Tribunal , ex parte.Jagger , as follows:“ An Architect is one who possesses, with due regard to aesthetic as well as

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practical considerations, adequate skill and knowledge to enable him (i) to originate, (ii) to design and plan, (iii) to arrange for and supervise the erection of such buildings or other works calling for skill in design and planning as he might, in the course of his business, reasonably be asked to carry out or in respect of which he offers h is services as a specialist. ”

Such duties include preparing plans and specifications and supervising or inspecting the building works to ensure that the Contractor is complying with the building contract. An Architect engaged by an Employer acts as his agent and owes him the contractual and often tortious duty to carry out his work with the reasonable skill and care to be expected of a competent Architect. He will also owe a duty when issuing certificates to act fairly as between the Employer and the 2 Contractor. [Sutcliffe v Thackrah and Others (1974) AC 727] An Architect does not merely design and supervise the erection of buildings, but also gives prospective building owners preliminary advice on the type of building to be erected and the cost of doing so. Since it is obvious that a design is wasted which will only produce a building costing considerably more than the owner’s resources, or the sums allocated by the owner to the project, the Architect must possess sufficient knowledge of the cost at current prices of buildings or other works which he may design, so that the cost of carrying out his designs will come within a reasonable distance of the owner’s requirements, insofar as these have been made known to him [Moneypenny v Hartland (1826) 2 C&P 378]. For the same reason, an Architect will need to know enough about building materials and construction techniques to avoid designing buildings which can only be constructed above the client’s budget or at unreasonable cost. A person is prohibited from practising or carrying on the business of an architect under a name, style or title or title containing the word “architect” if he is not registered under the Architects Act 1967 . However, whilst the term “architect” is protected, there is no prohibition against carrying out design in the absence of registration. Architects are expected to comply with the Code of Professional Conduct by LAM. Matters of professional conduct and practice are dealt with by the Disciplinary Committee which will investigate any “misconduct” or “complaint”. 1.2

Engineer

There is no exact definition of “an engineer”. The Engineer’s function in relation to design and supervision is similar to that of the Architect. An Engineer is required to be registered with the Board of Engineers (Lembaga Jurutera Malaysia - LJM), under the Engineers Act 1967 . Engineers are expected to comply with the Code of Professional Conduct by LJM. Matters of

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Mr.Jagger, an engineer & surveyor , applied to the Architect’s Registration Council (ARCUK) and was refused registration as an archite ct. The CA allowed the appeal. Claim by employer against architect for negligent certification and/or supervision. After Contractor’s employment was determined, Contractor went went into liquidation. HL held Architect was was negligent and liable for over-certification of interim certificates.

Role of the A/E/QS Page 1 of 33

professional conduct and practice are dealt with by the Disciplinary Committee which will investigate any “misconduct” or “complaint”. 1.3

Quantity Surveyor

The role of a Quantity Surveyor was described in the 19th Century as being that of a person “whose business consists in taking out in detail the measurements and quantities from plans prepared by an Architect for the purpose of enabling b uilders to calculate the amounts for which they would execute the plans ” [Taylor v Hall (1870) IR4 CL 467].

This is now been considerably broadened, both at the preparatory stage of building contracts and throughout the life of a project, and includes assisting in the negotiating and obtaining of quotations for work to be carried out by specialists, the preparation of detailed valuations for the purposes of interim certificates, and the detailed preparation of the Contractor’s Final Account including the valuation of variations and claims, largely as a result of which Quantity Surveyors now go by many different names, including i ncluding “Cost Managers”, “Cost Consultants”, etc. A Quantity Surveyor (QS) is required to be registered with the Board of Quantity Surveyors (Lembaga Jurukur Malaysia), under the Quantity Surveyors Act 1967 . Matters of professional conduct and practice are dealt with by the Investigating Committee which will investigate any contravention or failure to comply with the QS Act 1967 .

2.

Duties and Liabilities to the Employer

2.1 Professional Appointments: Express and implied terms Express Terms The architects’ duties to his client depends on the express terms of his contract with the client. Generally the conditions of appointment of architect are:The architect will be employed to carry out the architectural services in connection with the defined purpose and that he will be paid his/her fees. The rights of the building owner are that he will be entitled to the skillful services of the architect in the discharge of all the duties necessary to be performed by an architect in order to fulfill the defined purpose of the appointment. If the terms of appointment of an architect/engineer failed to set out the precise scope of his duties, the ultimate decision will be by the courts if dispute arises. If the provision is made in the terms of appointment and a dispute arises between the parties, the court will have to draw implications from the term of the appointment itself to give the agreement business efficacy. In Malaysia, Rule 29 of the Architect Rules 1996 provides for the mandatory requirement that an Architect enters into an agreement for his professional services according to the Architect (Scale Architect (Scale of Minimum Fees) Rules 1986 , the conditions of Engagement in the Third Schedule and the Memorandum of Agreement in the Fourth Schedule. rd

Note in particular Clauses 2 and 5 of the 3 Schedule, the conditions of engagement of a professional Architect, the Architects Rules 1996 (Amended 2005). Clause 2 A professional Architect shall advise the client on the need for other consultants consu ltants to be engaged e ngaged for any part of the project and unless otherwise agreed upon, the consultants shall be engaged and paid by the client. Clause 5 Where consultant are engaged by the client for any part of the project pursuant to paragraph 2, the professional Architect shall not be liable for their performance, acts or omissions.


professional conduct and practice are dealt with by the Disciplinary Committee which will investigate any “misconduct” or “complaint”. 1.3

Quantity Surveyor

The role of a Quantity Surveyor was described in the 19th Century as being that of a person “whose business consists in taking out in detail the measurements and quantities from plans prepared by an Architect for the purpose of enabling b uilders to calculate the amounts for which they would execute the plans ” [Taylor v Hall (1870) IR4 CL 467].

This is now been considerably broadened, both at the preparatory stage of building contracts and throughout the life of a project, and includes assisting in the negotiating and obtaining of quotations for work to be carried out by specialists, the preparation of detailed valuations for the purposes of interim certificates, and the detailed preparation of the Contractor’s Final Account including the valuation of variations and claims, largely as a result of which Quantity Surveyors now go by many different names, including i ncluding “Cost Managers”, “Cost Consultants”, etc. A Quantity Surveyor (QS) is required to be registered with the Board of Quantity Surveyors (Lembaga Jurukur Malaysia), under the Quantity Surveyors Act 1967 . Matters of professional conduct and practice are dealt with by the Investigating Committee which will investigate any contravention or failure to comply with the QS Act 1967 .

2.

Duties and Liabilities to the Employer

2.1 Professional Appointments: Express and implied terms Express Terms The architects’ duties to his client depends on the express terms of his contract with the client. Generally the conditions of appointment of architect are:The architect will be employed to carry out the architectural services in connection with the defined purpose and that he will be paid his/her fees. The rights of the building owner are that he will be entitled to the skillful services of the architect in the discharge of all the duties necessary to be performed by an architect in order to fulfill the defined purpose of the appointment. If the terms of appointment of an architect/engineer failed to set out the precise scope of his duties, the ultimate decision will be by the courts if dispute arises. If the provision is made in the terms of appointment and a dispute arises between the parties, the court will have to draw implications from the term of the appointment itself to give the agreement business efficacy. In Malaysia, Rule 29 of the Architect Rules 1996 provides for the mandatory requirement that an Architect enters into an agreement for his professional services according to the Architect (Scale Architect (Scale of Minimum Fees) Rules 1986 , the conditions of Engagement in the Third Schedule and the Memorandum of Agreement in the Fourth Schedule. rd

Note in particular Clauses 2 and 5 of the 3 Schedule, the conditions of engagement of a professional Architect, the Architects Rules 1996 (Amended 2005). Clause 2 A professional Architect shall advise the client on the need for other consultants consu ltants to be engaged e ngaged for any part of the project and unless otherwise agreed upon, the consultants shall be engaged and paid by the client. Clause 5 Where consultant are engaged by the client for any part of the project pursuant to paragraph 2, the professional Architect shall not be liable for their performance, acts or omissions.


If the Architect did not advise the employer to appoint other consultants for any part of the project, he may be held responsible for the discharge. If the Architect then performs those duties himself then it may be regarded as services done within his appointment.

Implied Terms Not all contracts however, are required to be in writing. Where there is no written contract, the terms of the contract will have to be implied. A term can be implied by law or from the facts.

2.2

Degree of Skill

An architect arch itect who offers professional architectural services warrants that he will use “reasonable care & skill”. The degree of skill required is that of an ordinarily competent architect professing to have that special skill. Contracts for supply supply of professional architectural services do not normally give any implied warranty beyond reasonable care and skill. In Greaves v Baynham Meikle [1975] 1 WLR 1095, the Court of Appeal held : “ The law does not usually imply a warranty that [a professional man] will achieve a desired result, but only a term that he will use reasonable care and skill. The surgeon does not warrant that he will cure the patient. Nor does the solicitor warrant that he will win the case .”

An external (i.e. not in-house) in- house) professional in private practice is in law an independent contractor - he is entitled to be left free, in the absence of express provision to the contrary, to carry out the incidental duties necessary to achieve the purpose for which he has been appointed in the way which seems best to him. Whilst he is entitled to be left undisturbed in matters of the day to day discharge of his duties, however, he is not entitled to dictate to the Employer on matters which come within the latter’s legitimate sphere of interest and decision, and he is indeed in such matters bound to consult the Employer, at the risk of being liable in negligence for failing to do so.

2.3

Nature of Duty

There is now universal judicial agreement that the liability of a professional person to their client arises both in tort and in contract. As described in Hudson, generally, an owner under a building/ engineering contract will have four main interests which he employs em ploys his professional adviser(s) to secure, nam ely: “(i)

a design which is skilful and effective to meet his requirements, including those of amenity, durability and ease of maintenance, reasonable cost and any financial limitations he may impose or make known, and comprehensive, in the sense that no necessary and foreseeable work is omitted;

(ii)

obtaining a competitive price for the work from a competent contractor, and the placing of the contract accordingly on terms which afford reasonable protection to the owner’s interest both in regard to price and the quality of the work;

(iii)

efficient supervision to ensure that the works as carried out conform in detail to the design and the specification, and

(iv)

efficient administration of the contract so as to achieve speedy and economical completion of the project.”

3.

Standard of Care


The precise degree of care owed by those holding themselves out as specially qualified in a particular trade or profession has been described in a number of different ways.

It is a question of fact which “appears to us to rest upon this further enquiry, viz: whether other persons exercising the same profession or calling, and being men of experience and skill therein, would or would not have come to the same conclusion as the defendant” [per Tindal C J in Chapman v Walton (1833) 10 Bing. 57]. In a medical case, it was said:“ It is not enough, to make the defendant liable, that some medical men, of far greater experience or ability, might have used a greater degree of skill, nor that even he might possibly have used some greater degree of care. The question is whether there has been a want of competent care and skill to such an extent as to lead to the bad result.” [per Erle C J in Rich v Pierpont (1862) 3 F and F 35] In another medical case, it was stated that:“ There is ample scope for genuine difference of opinion, and one man clearly is not negligent because his conclusion differs from that of other professional men nor because he has displayed less skill and knowledge than the others would have shown.” [Hunter v Hanley (1955) SLT 213]

Of architects, it has been said in Canada:“ As architect, he is in the same position as any other professional or skilled person, and whether it be in the preparation of plans and specifications, or the doing of any other professional work for reward, is responsible if he omits to do it with an ordinary and reasonable degree of care and skill .” [Badgley v Dickson

(1886) 13 AR 494] In a case concerning engineers, the Judge said:“ …The professional man should command the corpus of knowledge which forms part of the professional equipment of the ordinary member of his profession. He should not lag behind other ordinary assiduous and intelligent members of his profession in knowledge of new advances ” [Eckersley v Binnie

& Partners (1988) 18 Con LR1]. Of architects in their role as supervisors, it has been said in an English case that : “ As regards matters in which the plaintiff (an architect) was employed mere ly as agent for the building owner, he was to protect his interests adversely to the builder, and the plaintiff would be liable to an action by his employer if he acted 3 negligently in such matters. ” [Chambers v Goldthorpe (1901) 1 KB 624]

The architect : “Is bound to do his best for his Employer, and to look sharply after the builder whilst the work is going on, and it is his duty in that capacity to form an opinion as to what his Employer is entitled while the works are being executed. ” [Cross v Leeds Corporation (1902) th

Hudson, Building Contracts, 4 Edition]

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The Court of Appeal authority of Chambers v Goldthorpe [1901] KB 624 established that in certification, specifically, the contract administrator was acting in an arbitral role and should be protected against civil suit by a form of quasi-judicial immunity. In 1974, the House of Lords in Sutcliffe v Thackrah overruled this decision and established that an architect owes a duty of care towards his client in the performance of all duties, including contract administration, and specifically certification, and could be liable for negligence in the performances of those duties. Negligent overcertification would be an obvious example. This extends to both interim and final certificates.


The standard of skill and care in professional work is usually stated in the test formulated by McNair J : “ Where you get a situation which involves the use of some special skill or competence … the test is the standard of the ordinary skilled man exercising and professing to have that special skill. A man need not possess expert skill … it is sufficient if he exercises the ordinary skill of the ordinary competent man exercising that particular art. ” [Bolam v Friern Hospital Management Committee

(1957) 1 WLR 582] Thus the professional is to be judged by the standards of the profession prevailing at the time the design was carried out. It is important to bear in mind a number of things when considering these various quotations. Firstly, the language used should not be taken to justify a lower or “ordinary” standard of professional knowledge and skill in cases where a construction professional happens, whether by diligence or mere accident, actually to possess greater knowledge or skill than an ordinary similar situated professional. For example, a construction professional may have had reason to study the geology of a particular area, or of a particular site, due to difficulties on another occasion, or have obtained specific information not normally available, or may have attended some special course which they have not put forward or professed as a special skill to their client. In such a case, there will be liability if the skill or knowledge so obtained is not used with care. “ [Counsel submitted] that it is the duty of a professional man to exercise reasonable care in the light of his actual knowledge, and that the question of whether he exercised reasonable care cannot be answered by reference to a lesser degree of knowledge than he had, on the grounds that the ordinarily competent practitioner would only have had that lesser degree of knowledge. I accept [that] submission; but I do not regard it as a gloss upon the test of negligence as applied to a professional man. As it seems to me, that test is only to be applied where the professional man causes damage because he lacks some knowledge or awareness. The test establishes the degree of knowledge or awareness which he ought to have in that context. Where, however, a professional man has knowledge, and acts or fails to act in a way which, having that knowledge, he ought reasonably to foresee would cause damage, then, if the other aspects of duty are present, he would be liable in negligence …” [Wimpey Construction UK Ltd v Poole (1984) 2 Lloyd’s Rep 499] If a construction professional professes special qualifications, skills or experience to prospective clients, then the standard of care will obviously be raised to the new level which they profess. In addition, it may be that where a client seeks the services of a professional person of preeminent standing in their field, and pays appropriately higher remuneration for their services, then a higher standard will be expected than that of the ordinary, everyday practitioner in that field [Duchess of Argyll v Beuselinck (1972) 2 Lloyds Reports 172] In Maynard v West Midlands Regional Health Authority [1984] 1 WLR 634, Lord Scarman also made the point that the test is not necessarily the skill of the average member of the profession, if it is a speciality in question. He stated: “Failure to exercise the ordinary skill of a doctor (in the appropriate s peciality, if he be a specialist) is necessary.”


Against these possible factors raising the standard of skill required, it should be remembered that in areas of skill such as construction, a degree of experiment and innovation is clearly not only acceptable but, to quote Hudson, is “ to be encouraged if technical progress is not to be stultified ”:“ If you employ an architect about a novel thing, about which he has had little experience, if it has not had the test of experience, failure may be consistent with skill. The history of all great improvements shows failure of those who th embark in them.” [Turner v Garland (1853) Hudson’s Building Contracts, 4

Edition] In general, it is an adequate defence for a designer to prove that he acted in accordance with a practice accepted as proper by a reasonable and responsible body of the profession, even if others considered it to be wrong: Maynard v West Midlands Regional Health Authority [1984] 1 WLR 634. In that case, a large body of expert medical opinion was presented at the trial approving of the defendant consultant physician's and surgeon's actions. The Judge at first instance preferred the evidence of the plaintiff's expert witness, but the House of Lords held that in the medical profession (as in others) there was room for differences of opinion and practice, and a court's preference for one body of opinion over another was no basis for conclusion that following the other body of opinion amounted to negligence. Lord Scarman, with whom the other members agreed, stated: “ It is not enough to show that there is a body of competent professional opinion which considers theirs was a wrong decision, if there also exists a body of professional opinion equally competent, which supports the decision as reasonable in the circumstances... a judge’s preference for one body of distinguished professional opinion to another also professionally distinguished is not sufficient to establish negligence in a practitioner, whose opinions have received the seal of approval of those whose opinions, thoughtfully expressed, honestly held, were not preferred.”

As can be seen from the quotations from the judgments set out above, an Architect o r Engineer does not warrant the adequacy of his design to their client, but only due professional care in preparing it.

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Continuing duty and limitation

The duty of design in a construction contract is essentially a continuing one where the construction professional’s employment continues during the supervision stage: “ 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, as it was here suggested that he could 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.” [Brickfield Properties Ltd v Newton (1971) 1 WLR 862]

“ I consider that the architect was responsible for the design and that that responsibility was a continuing one in the sense that, if he subsequently discovered that what he may initially have been justified in assuming was an adequate design was in fact a defective design, his responsibility remains .”

[London Borough of Merton v Lowe (1981) 18 BLR 130] “ I am now satisfied that the architect’s duty of design is a continuing one, and it seems to me that the subsequent discovery of a defect in the design, initially and unjustifiably thought to have been suitable, reactivated or revived the architect’s duty in relation to design and imposed upon them the duty to take such steps as were necessary to correct the result of that initially defective design.” [London Borough of Merton v Lowe (1981) 18 BLR 130]


5.

Measure of Damage

If an error in the design is discovered at an early stage, the Employer should normally, as part of the duty to mitigate loss, give the professional an opportunity to correct it. In Columbus Co v Clowes (1903) 1 KB 244, the Judge said:“ It seems to me that the most the plaintiffs can get is the reasonable cost of making the plans good. But then comes the difficulty. The defendant himself would have made the plans good without any charge. Indeed he would have been bound to do so. If, however, the plaintiffs had called in another architect, he would in all probability have insisted on commencing the plans de novo, and would have refused to make any use of the d efendant’s plans, but would that have been a reasonable course to pursue? I do not think it would.”

The measure of damage for breach of the design obligation will thus differ widely according to the nature of the breach. It may be nominal, if the error can be rectified simply at an early stage, or it may be for loss of value or loss of commercial profitability in the case of a non-structural suitability breach, which cannot be rectified. Where the design failure relates to the structure itself, there will then be an argument as to whether the Claimant should recover the cost of repairs or the amount of diminution in value.

6.

Design

An Architect or Engineer (“A/E”) will normally be given a relatively free hand in the design elements of their duties, but Employers of course sometimes press their own ideas upon them as to the materials to be used or the plans to be followed. Where the E mployer’s suggestions or wishes are likely to lead to an unsatisfactory result, the A/E’s duty will be discharged if they give a sufficient warning to the Employer. Where an A/E is specifically instructed to use a new method of construction, its failure may still be consistent with a proper degree of care on the A/E’s part. Where a project involves new techniques of construction, the A/E is under a special duty to take the best advice available upon the use of such new techniques, and to advise their Employer of any potential risks; and where the selection of the technique is down to the A/E, the onus of justifying their action will be correspondingly heavier. In normal circumstances, an A/E will not be automatically relieved from liability for their plans or design by obtaining their Employer’s approval of them, if the design defect complained about is one of construction or of a technical nature.

7.

Delegation of Duties

The appointment of an architect, as with most professional persons is personal to himself. He cannot delegate his duty to be performed by someone else. In practice however, due to the complexities of some projects an architect will usually delegate a substantial proportion of the technical aspects of design to other skilled professionals like mechanical & electrical engineers, civil & structural engineers, quantity surveyors, etc. Where an architect undertakes the design and supervision of a building project under an “umbrella” arrangement, he should let the client know that he is delegating other aspects of the design like the mechanical & electrical design work and structural design work to other professionals.

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FEASIBILITY STUDIES

8.1

Concept Design and Cost-Benefit Analysis

A project will usually begin from a concept design and the feasibility of the project will be assessed based on such designs. As part of the feasibility study, relevant constraints and conditions will be investigated, and forecasts of costs, revenues and other economic benefits will


be prepared. Before proceeding to detailed design and construction, decisions have to be made on: size and layout; structural concept; the operational use of the works; standards. An architect m ay be called upon to prepare feasibility studies as to the potential of the site. The architect should be careful to advise only on the physical potential of the site and not the commercial viability of a project unless be professes to have that skill as he may find himself liable to the client if the client acts on his advice and suffers a loss under the Hedley Byrne principle. In the earliest stages of the employment of the construction professional, the Employer will invariably indicate or impose limitations on the cost of the proposed project. Even if no mention of this is made, it has been suggested that an A/E owes a duty to design works capable of being carried out at reasonable cost, having regard to their scope and function. There will, therefore, in most cases be an express or implied condition of the professional’s employment that the project should be capable of being completed within a stipulated or reasonable cost, and an A/E will be liable in negligence if, in fact, the excess of cost is sufficient to show lack of care or skill on their part.

8.2

Cost Estimates

An architect, engineer or quantity surveyor may be asked by his client for an estimate of the likely building costs of the proposed project. In providing an estimate the architect is under a duty to give a figure that is reasonably close to the ultimate cost that takes into account the effect of inflation or is expressed to be current cost only. The estimate should also fall within any budget limit imposed by the client. An architect should therefore ascertain whether the client has any costs limit and prepare a scheme that is capable of being carried out within that limit. In any event the architect should ensure that the proposals can be executed for a reasonable cost having regard to the scope and function of the works. Very often, an architect is asked to produce a design within a given budget. In such a case, an architect may be under a duty to design works capable of being carried out at a reasonable cost having regard to their scope and function. There will be an express or implied condition of employment that the project should be capable of being built within a stipulated or reasonable cost. In Gordon Shaw Concrete Products Ltd v Design Collaborative Ltd, Canadian architects were asked to investigate the possibility of constructing a house for C$60,000. They designed a scheme that would cost over C$100,000 to build. The plaintiffs sued for negligence and claimed repayment of fees paid on the grounds that the work carried out was useless. The architects were found to be negligent and to have failed to provide any consideration for the fees paid to them. The judge said: ‘ The architect was under a duty to submit an estimate of construction costs that was reasonably cost to the ultimate cost and reason for that discrepancy. There was no reasonable explanation of the great discrepancy between the estimated and ultimate construction figure. ’

An architect may also be liable if his negligent advice causes the client damage. In the light of 4 the case of Nye Saunders & Partners v. Alan E Bristow (1987) 37 BLR 92 (CA) is authority that 4

Bristow commissioned architects to renovate his Elizabethan mansion in Surrey. He gave a budget figure of £250,000 and the original estimate of £238,000 was given in February 1974. By the time the works were costed in September of the same year the likely completion costs were £440,000 and still rising. The defendant refused to continue with the project and terminated the architect’s appointment and refused to pay their fees. When sued for the fees by the architect, he contended he had to cancel the project as he could not proceed because he had


when a person is asked to give an estimate, he must clearly indicate the extent to which the estimate is subject to variation, or at least that the basis must be clearly stated. In the case of Moneypenny v Hartland & others (1824) 1 C&P 351, (1826) 2 C&P 378, the judge said: “ A man should not estimate a work at a price at which he would not contract for it; for if he does, he deceives his employer… If a surveyor delivers an estima te greatly below the sum at which a work can be done, and thereby induces a private person to undertake what he would not otherwise do, then I think he is not entitled to recover; and this doctrine is precisely applicable to public works. There are many in this metropolis which would never have been undertaken at all, had it not been for the absurd estimates of surveyors”.

The measure of damages for breach of this duty may often not be very great, since if discovered an Employer will have lost little, but just suffered a delay in the project coming to fruition. In cases where the excess of cost over estimate is not appreciated until the work has been completed, the measure of damage may be difficult to assess since against the price the Employer has had to pay, work done, to a corresponding value, has been carried out and there has therefore been no “loss”. The A/E may well lose their right to remuneration, however, under the principle in the Moneypenny case (see above).

8.3

Consequences of Negligent Forecasts

The law affects the position of those who carry out forecasts and feasibility studies in two different ways. The early cases concentrated on the entitlement of an architect or engineer to his fees, or to have his employment continued, when the tenders received exceeded his cost estimates and the estimate was shown to have been made negligently. Alternatively, those who have carried out studies and forecasts may be liable in damages to promoters and even third parties for loss suffered due to reliance on their negligent forecasts. The distinction between tort and contract is relevant here. Entitlement to fees must be a matter of contract. Liability in damages to the promoter might be either in contract or tort. Liability to third parties can only be based in tort. One needs to appreciate the processes involved in forecasting to understand how negligence may arise. The first stage to a forecast is the collection of data. Getting the data wrong or failing to make appropriate enquiries may constitute negligence. It does not follow automatically that the absence of significant data means negligence. Data will necessarily be selective. For example, in the investigation of geotechnical or geo-environmental conditions, investigations involve decisions on where to explore, where to sample and what to test for. The investigation cannot be exhaustive, unless time and money are limitless. The second stage is making the forecast on the basis of the data. The law does not impose an implied warranty of the accuracy of the forecast or figures. As a matter of practicality, the one certainty about forecasts is that they will be inaccurate. The law does, however, impose a duty to exercise skill and care in the preparation of the forecast or figures. A forecast might be negligent, for example, on the basis of failure to take into account some obviously significant factor. Sometimes liability has been imposed for failure to warn that a forecast might be inaccurate (perhaps because of limitations on the extent of the investigation), or that it does not include allowance for some factor, or of the possible degree of inaccuracy. been misled. The court found the architect negligent for failing to point out that the estimate was based on prices which had not taken inflation into account. The architect was entitled to his fees for submitting the planning application prior to the cost estimate and was not entitled to his fees for work done after his estimate had been acted upon.


8.4

Duty to warn

However, the need for care in preparing preliminary cost plans and specifications in relation to forecasts of ‘net lettable area’ was painfully reinforced in Gable House v Halpern Associates (1995) 48 Con LR 1. Here, the defendant architect for a refurbishment project, provided a preliminary cost plan and elemental specification showing a cost of the works at £5.8m and a useable office space of 33,928ft2. The actual area was only 31,769 ft2. The judge found the architect knew that the amount of lettable space was important to its client, with the result that it was liable for its client’s claim. The defendants produced plans, and gave estimates of the ‘net lettable area’ to be obtained from the refurbishment. On the basis of the estimates, the plaintiffs went ahead with buying out the lease of a tenant and proceeded with refurbishment rather than redevelopment or resale. It transpired that the areas were overstated, principally because the architect had not made sufficient allowance for the space occupied by the facade support. The areas as stated were all subject to a label “all areas approximate”, but the judge held that this was insufficient as a warning and stated: “I consider that they fell short of the standards to be expected of a competent architect in failing to draw Gable House’s attention to the difference between ‘usable office space’ and ‘lettable area’.”

liability was still imposed on Halpern for several important reasons including: • At the time the four alternative development schemes were put forward it would not have been possible for an architect to forecast the net lettable area to within 500 square feet and provide plans which were sufficiently developed to do so » Halpern's limitations or qualifications were insufficient • Ultimately the work which Halpern had done fell below the standard to be expected from a competent architect, This opened the way toward liability in tort • It was found that if Halpern had warned Gable House of these limitations it was improbable that they would have gone ahead with the development.

8.5

Extent of Liability

More recently, the House of Lords has reviewed the question of liability for information supplied negligently, in South Australia Asset Management Corp v York Montague [1996] 3 All ER 365. The Claimants, SAAMCO lent money to property developers to buy commercial property at the peak of a property boom. The borrowers were unable to re-pay the loans when the boom collapsed and SAAMCO argued that they only lent money relying on negligent valuations of the property by the defendant valuers. The Claimants SAAMCO argued that they would not entered into the transaction at all but for the negligent valuation and they should recover all losses suffered. The argument was accepted by the Court of Appeal but rejected by the House of Lords which held that SAAMCO would only recover that part of the loss which foreseeably followed from the careless valuation and not that part which flowed from the collapse of the property market.

9

Concurrent Liability in Contract and Tort – Scope of duty

An architect may be concurrently liable in both contract and tort. An architect will be liable in contract if he is in breach of an implied term as to the exercise of the degree of skill and care to be expected of an ordinarily competent architect. Under the Limitation Act, claims for breach of contract are statute barred 6 years from the date of the breach. In building cases, that date can


begin to run before practical completion. The measure of damages recoverable will those losses arising naturally in the ordinary course of things from the breach and/or losses arising due to special circumstances known to the defendant at the time the contract was made. An architect can also be sued by his client for the tort of negligence for breach of the ordinary duty of care, which for all intents and purposes is identical to the duty owed in contract. In tort, the limitation period of 6 years begins from the date the damage first occurs, regardless of whether the damage was discovered. The architect’s liability in tort can therefore be longer than in contract. The existence of a contractual relationship between one party and another will not preclude the existence of a tortious liability between the same parties. The question of whether or not a professional person owes a duty of care in tort to their Employer, in addition to, and concurrent with their contractual obligations, is still a matter of debate in the courts. The law has developed in this area in recent years.

10.

PROCUREMENT STRATEGY

10.1

Decisions and Advice

At the conclusion of, or as part of, feasibility studies, decisions need to be made on the procurement strategy to be adopted for the project, having regard to the following : Division of functions and responsibilities Investigation and supply of information Buildability. Measurement and pricing. The decisions are, or should be, conditioned by the legal implications (considered in the following sections), and the policy adopted as regards the allocation of risks. The need for these decisions also introduces a possible duty of care on architects, engineers and quantity surveyors, and even lawyers, in respect advice on the choice of method of procurement and the implications of the choice. There are relatively few reported construction cases involving this issue, and those that are reported do not indicate a high rate of success in the claims, but there are plenty of medical negligence cases about failure to warn of the implications of surgical procedures, and these establish relevant principles of law. 10.2

Recommending a form of contract

The PAM Conditions of Contract for building works is commonly in use in private sector projects. For public sector projects, an architect may not have a choice as to what form of contract to use. Whereas an architect is at liberty to recommend the form of contract to be used, he has duty to his employer, when he recommends a particular form of contract to be used, to ensure that he is familiar with that form of contract and is able to administer that contract. While most architects are familiar with the standard form building contracts commonly in use, there are instances where the building contract used is not a standard form contract. An architect may find himself liable to his employer and even to the contractor if he is found to be negligent in the administration of the contract. 10.3

Administration of contract

The architect is the employer’s agent in all matters connected with the building work and the contract between the employer and the contractor and owes a duty of care to his employer to administer the contract properly. In the case of the administration of building contracts, where the terms of the contract may have different interpretations, it may be that if a professional acts honestly but erroneously upon one construction, they will not be liable for so doing. However, this must be a question of degree, particularly if the contract in question is a standard form recommended by the professional to


their client, and the error relates to an everyday administrative matter under that form which is either basic or upon which adequate advice or information was available.

Thus, where an Architect deliberately certified the full value of work done for interim payment without any deduction for defective work of which he was aware, on the ground that the contractual retention would be sufficient protection for the building owner, the Court of Appeal considered that as there was no specific mandate in the contract for the use of retentions for that purpose, the Architect was in breach of their duty to their client. ( Townsend v. Stone Toms & Partners (a firm)(1984) 27 BLR 26 ).

11.

Design responsibilities

Quite apart from the aesthetic designs of a building, the design responsibilities of an architect can extend to specifications, selection of finishes choice of construction techniques. He must exercise skill and care in the execution of his designs and in the choice and specification of materials.

12. 12.1

Site Investigation and Supply of Information Site Investigation

This includes preliminary observation and investigation of the site to determine if there are any obvious physical constraints which may affect the site or the building e.g. encroachments, right of way, drainage road reserves, etc. If necessary he should obtain interpretation plans to determine if there are any planning constraints. He should not rely on information given to him by others but should examine the site for himself. If he does not have the requisite skills to conduct a proper investigation of the site, he must advise the client to engage suitable professionals e.g. land surveyors, structural engineers to conduct the investigation. In Columbus v. Clowes (1903), an architect was employed by a company to prepare plans. The architect did not measure the site but acting on information from an unauthorized person, made the plans on the assumption that the site as smaller than it was. Errors in the plans was subsequently discovered and the architect was held liable to for errors in the plans. In practical terms, the starting point for success and safety in construction is adequacy of information. This applies to both design and construction phases. Under conventional procurement arrangements, the architect or engineer has been responsible for arranging investigations into ground conditions and existing structures, and obtaining information on natural conditions (e.g. wind, waves, tides); on artificial obstructions such as existing pipelines; and on matters such as access. The responsibility of the architect or engineer has, however, traditionally been limited to obtaining this information as necessary for the permanent works design. The contractor also needs information on these aspects in order to select plant, plan working methods, design temporary works, estimate rates of progress etc. Historically employers have been reluctant to provide such information to contractors, or obtain the information specially required by contractors, or accept responsibility for the accuracy of information which is supplied. The law has, until recently, abetted that reluctance. The starting point is probably Appleby v Myers (1867) LR 2 CP 651. The case concerned a contract to install a boiler and related equipment on the defendant’s premises. The premises burnt down before the work was completed. The plaintiff argued that there was an implied term that the defendant would make the buildings available and keep them in a fit state to enable the plaintiff to perform its contract. However, the court held that there was no absolute warranty that the premises would remain available.


The rule derived from the case, that the employer does not impliedly warrant the continuing existence of the site to enable work, is extended to yield the principle that the employer does not impliedly warrant the suitability of the site for the work of construction. See also Ibmac v Marshall (1968) EG 211 where the contractor, on encountering serious difficulties with water, had withdrawn from the site on the grounds that the employer “had not given them a proper site on which to do work”. The Court of Appeal held that this amounted to abandonment by the contractor. The statement by Telford in Moneypenny v Hartland (1826) 2 C&P 378, quoted in 2.3 above, that it was the duty of the engineer or architect to examine for himself into the nature of the soil, is an important principle, but it appears that the duty which was envisaged was limited to investigation of the site conditions relevant to the permanent works design and the risks borne by the employer. In practice the information obtained for this purpose has commonly been disclosed to the tendering contractors, but the law allowed the fiction in the contract that the contractor was to satisfy himself as to the nature of the site, and not rely on the information provided. There is an additional practical problem that the investigation carried out by the architect or engineer was, and often still is, intended only to provide information relevant to the permanent works design, without regard to the information needs of the contractor. An employer wishing to satisfy the information needs of the contractor should consider what those needs are. For example, if the work is to construct a cutting, the permanent works design is concerned with the ability of the cut slopes to stand at the designed angle without slipping, while the questions for the contractor are how difficult it is to remove the soil or rock, how much it will bulk, whether it will be fit for use elsewhere. A new information problem may be developing with design and build arrangements, in that clients with experience and data relevant to the design are withholding such information from the design and build contractors.

13

Buildability

One reason for problems in construction projects under conventional procurement arrangements has been that employers and their designers have not seen it as part of their responsibility to consider the buildability of the permanent works. Good designers probably consider buildability in any event, but the law has not (at least until recently) made it their responsibility. In design and construct arrangements, on the other hand, the designer is employed by the contractor, so buildability is a prime consideration for the designer. The starting point is Thorn v London Corporation (1876) 1 App Cas 120. Mr Joseph Cubitt had been appointed by the corporation as engineer to produce designs for Blackfriars Bridge. He produced contract drawings which showed the bridge piers to be built using caissons rather than cofferdams. The contractor, Thorn, attempted to construct the works using caissons in accordance with the drawings, but the attempt failed and he had to revert to the more conventional cofferdam method. Contractor claimed against the employer for the time and money wasted, on the grounds that the employer had impliedly warranted the work was possible by the method shown on the drawings. The House of Lords rejected the contention of such a warranty and held : (i) No implied warranty that the bridge could be constructed in the manner specified in the plans and specifications. (ii) Contractor should take proper precautions to satisfy himself that the works could be carried out pursuant to the specified method. This hard line was continued by the House of Lords in Tharsis Sulphur and Copper v M’Elroy (1878) 3 App Cas 1040. The Appellants had employed the Respondents to erect a factory structure including cast iron trough girders. The specified structural steel sections were found to have been too thin for the fabrication of a steel structure. The engineer allowed the contractor to use bigger sections but refused to give the instruction. On completion of the work the


Respondent contractor claimed a considerable sum in excess of the contract price for the extra weight of metal supplied. The claim was rejected. The judge noted that in inviting the submission of tenders based on the specification, the employer can be said to have effectively asked the contractor “See if you can do this, and tell us what price you can do it for; satisfy yourselves … … whether you can do it before you enter into the contract” In other words, the contract undertakes to figuratively “bring the employer to his destination and will be entirely responsible to ensure that it happens”. Hudson’s has summe d up the position taken in the Tharsis Sulphur case very succinctly, i.e. “ Can you build to this design, and if so at what price?” (i) It appears that the obligation to complete extends to varied works of a similar nature to the main works; (ii) By tendering and subsequently accepting an award the contractor is deemed to have agreed that he can do it for the tendered price. A separate question is whether the designer owes a duty to the employer to produce a design which is buildable. In EDAC v Moss (1984) 2 Con LR 1, HHJ Newey QC held that there was such a duty: “I think that if implementation of part of a design requires work to be carried out on site, the designer should ensure that the work can be performed by those likely to be employed to do it, in the conditions which can be foreseen, by the exercise of the care and skill ordinarily to be expected of them. If the work would demand exceptional skill, and particularly if it would have to be performed partly from scaffolding and often in windy conditions, then the design will lack what the experts in evidence described as ‘buildability’ Similarly I think that if a design requires work to be carried out on site in such a way that those whose duty it is to supervise it and/or check that it has been done will encounter great difficulty in doing so, then the design will again be defective, It may perhaps be described as lacking ‘supervisability’.”

14.

DESIGN, SPECIFICATION AND CONTRACT DOCUMENTATION

14.1

Fitness for Purpose or Skill and Care ?

It is fairly trite law that the duty imposed on a designer by law as an implied term of a contract, is to exercise due skill and care. The point is frequently made that the designer, by undertaking a duty of skill and care, does not warrant that the thing designed, when constructed, will be fit for purpose. The possibility that there may be a failure to achieve fitness for purpose without breach of the duty of skill and care is demonstrated in a number of cases. Thus in Turner v Garland and Christopher (1853) HBC 4th ed Vol 2 p1, the defendant architect was instructed by the plaintiff to include in plans for model lodging houses a new patent concrete roofing, proposed by the defendant to meet the requirement for an economical flat roof. The concrete roof proved a failure, let in water, and had to be replaced. The defendants sued in negligence. After the jury found that “the novelty of the experiment is a sufficient excuse for the leakage”, the judge held that this was substantively a verdict for the defendants and stated: “It appears to me the defendant brought an earnest mind and careful attention to the work he had undertaken; and if he brought a competent skill, he ought not to be called upon to rectify any partial failure of the work.”

A recent example is George Hawkins v Chrysler Ltd and Burne Associates (1986) 38 BLR 36. Burne was an engineer who had designed a communal shower facility for the car manufacturers, Chrysler. The plaintiff, an employee of Chrysler, slipped on the wet shower room floor and sued for personal injury. Burne was joined to the action as a third party. The pleadings alleged failure in the selection and recommendation of the flooring material and averred an implied warranty that the floor surface would be fit for use in a wet shower room. In the Court of Appeal it was held, first, that there was no such implied warranty; second, that the engineer had made all reasonable enquiries before specifying the material and had not been negligent.


The duty of skill and care, does not amount to an implied warranty that the end product will be fit for purpose, but it is effectively a duty to exercise skill and care to achieve fitness for purpose. The real difference is that it is a process obligation rather than an end-product obligation. Proof of breach depends on proof of fault in the process, rather than merely failure of the end product to be fit for purpose.

14.2

Design and Build

In traditional employer/architect relationships, an architect is only required to use reasonable care and skill in the execution of his design services. He does not normally warrant the suitability of his design for an intended purpose. In design and build contracts however, there may be an implied term that his design is suitable for the intended purpose. He has a higher duty of care to his employer to ensure that his design is suitable for the purpose made known to him where his is employed under a design and build contract. The “employer” is the person with whom the architect has a contractual rela tionship. In a design and build contract, the “employer” is the builder with whom the architect has teamed up to offer his design. Although no privity of contract exists between the architect and the building owner, an architect is still under a duty of care to ensure that the acts and omissions do not cause loss or damage to the building owner.

14.3

Who is the “Client”

It should be pointed that the “client” in the case of design and build contract is the party with whom the architect contracted. It is to be distinguished from the building owner, who may well be the employer of the contractor.

14.4

Liability under Design and Build Contracts

Liability for defects under design and build contracts raises special considerations. In contracts to design and build, the law will probably imply a contractual obligation of fitness for purpose, in the absence of contractual stipulation otherwise, and it is no defence to show that the designer has exercised all due skill and care in making his design: Newham LBC v Taylor Woodrow Anglian (1981) 19 BLR 99. In Basildon DC v Lesser [1985] QB 839, the plaintiff (the Council) entered into a standard form contract with the first defendants (System Builders) for the construction of dwellings. The Contract contained recitals which referred to design drawings amongst other things, stating that they had been prepared under the direction of the plaintiff's engineer or architect. The benefit of the Contract was assigned to the second defendants and a Deed of Indemnity was given by the third defendants, agreeing to indemnify the plaintiffs against any breach of the building contract by the second defendants. An action to recover damages in respect of defects which developed in some of the buildings proceeded only against the third defendants. The Judge also referred to dicta of Lord Denning MR in Hancock v Brazier (Anerley) Ltd [1966] 2 All ER 901, where he said: "When a purchaser buys a house from a builder who contracts to build it, there is a threefold implication: that a builder will do his work in a good and workmanlike manner; that he will supply good and proper materials; and that it will be reasonably fit for human habitation.”

A further strand of reasoning hinged on the fact that a builder, when providing a building, was engaged in a contract for work and labour done, as well as materials supplied. In performing the work he should take reasonable care and skill, and in providing materials, he should use those which will provide an end result fit for the purpose. In a sense, the provision of quality materials necessarily overlapped with the necessity to use reasonable skill and care in choosing those materials. This reasoning was summed up when Judge Newey said: "The implication of a term that a builder should provide a building which is fit for purpose, imposes on him a higher duty than is ordinarily implied in a contract for the design of a building by an architect. The latter, like the engineer, solicitor, doctor and other professionally qualified persons, has only to use reasonable care and skill”.... and later...... "However, it would seem that if the professional person does not merely design, but makes something, it is to be implied that what he has made will be fit for purpose.”


For these reasons the Judge held that there was an implied term of the Agreement that the building designed by the Contractor as dwellings should be fit for habitation on completion. Further, having found that this was the case, it was necessary that the Contractor should have designed them with the skill and care to be expected of system builders and so this was also implied.

A turnkey contractor engaged structural engineers to design the frame of a factory building, the floors of which were required to accept the weight of stacker trucks moving over them carrying oil drums. As designed, the floors were not in fact able to withstand the resonance forces set up by the movement of the trucks. The contractor sued the engineer for damages. The trial expressly stated that there was no negligence but implied a term of suitability, suggesting that a higher duty might be implied by law than that owed by professional men generally. It was held by the Court of Appeal that in general no higher duty rested on the structural engineer than that formulated, in Bolam’s case for professional negligence, on these particular facts, since the design and build contractor was liable to the owner without qualifications for a suitable design, the defendants were liable to the contractor under a term to be implied from the particular facts. 5 Greaves v. Beynham Meikle (1975) 1 WLR 1095. In Independent Broadcasting Authority (IBA) v EMI and BICC Construction Ltd (1980) 14 BLR 1 the House of Lords held that the defendant (BICC) was liable for its negligent design of a television aerial mast, causing it to collapse as a result of oscillation of the mast during high winds. The collapse was in fact caused by two forces of stress on the mast, but BICC were only liable in respect of one of them. The television mast collapse due to ice forming on the stays where the design assumed that it would fall way in the high winds. The contractor played no part in the design. However, its tender it stated that the offer was ‘for the design, supply and delivery of a 1,250 ft. high stayed cylindrical mast in accordance with our line diagram drawing No. 3SP5134/4’. The use of the word ‘design’ allowed the House of Lords to conclude that the contra ctor had expressly accepted liability for the design. It justified this on the grounds that it could recover the costs from the subcontractor.

14.5

Split Responsibility

A further issue may arise where several design professionals are involved, whether one professional has taken responsibility for design by others which is not within the normal scope of work carried out by his profession. To what extent is the generalist entitled to rely on or delegate to the specialist? To what extent is he expected to review or check the work of the specialist? Architects, in particular, may be found to have taken on responsibility for the whole of the design, but if the client knows that specialists are to be engaged by the architect as sub-consultants for a particular part of the work the architect may escape liability. In Moresk Cleaners v Hicks [1966] 2 Lloyd’s Rep 338, the defendant architect was employed by the plaintiff to draw up plans and specification for a factory extension. Without reference to the plaintiff the defendants invited a firm of specialist contractors to design the building. The building proved to be defective. The judge stated:

5

In Greaves & Co (Contractors) Ltd v Baynham Meikle & Partners [1975] 1 WLR 1095 consultant engineers were instructed to design a warehouse, the first floor of which, as they knew, was to be used for storing drums of oil that would be moved around by forklift trucks. The warehouse was built to the engineers’ design but after a few months’ use the first floor began to crack because it was not strong enough to bear the loads imposed on it. The main contractor, by whom the engineers had been employed, made a claim against them alleging that they had impliedly warranted that their design would produce a building fit for its intended use. Despite recognising that a professional man does not normally undertake an unqualified obligation to produce the desired result, the court held in that case that the exchanges between the parties were such as to give rise to an implied term that the warehouse as designed would be fit for the purpose for which it was required. In other words, the engineers assumed an unqualified obligation to produce a suitable design.


“It was said in the defence that it was an implied term of the defendant’s employment that he should be entitled to delegate certain specialised design tasks to qualified specialist subcontractors. I am unable to make any such implication... The architect has no power whatever to deleg ate his duty to anybody else.”

In Davy Chiesman v Davy Chiesman [1984] Fam 48, a similar question arose in the context of a solicitor relying on counsel acting in divorce proceedings. There was argument over an application by the Law Society against the husband’s solicitor on the grounds that costs had been incurred “improperly and without reasonable cause”. The solicitor argued that he was entitled to rely on properly instructed counsel. In the Court of Appeal, May LJ stated: “I also agree that a solicitor is in general entitled to rely on the advice of counsel properly instructed. However, this does not operate so as to give a solicitor an immunity in every such case. A solicitor is highly trained and rightly expected to be experienced in his particular legal fields. He is under a duty at all times to exercise that degree of care, to both client and the court, that can be expected of a reasonably prudent solicitor. He is not entitled to rely blindly and with no mind of his own on counsel’s views.”

In Baxall v Sheard Walshaw [2001] BLR 36, the defendant architect relied on a design by specialist contractors of siphonic drainage for a central valley gutter. HHJ Bowsher QC held that the architects ought not to have allowed the specialists to choose their own figure for the rainfall intensity design criterion or that they should have disapproved the figure proposed by the specialist. The judgment was overturned by the Court of Appeal, Baxall v Sheard Walshaw [2002] BLR 100, on the grounds that there was only one effective cause of the floods damaging the goods inside the warehouse, namely the absence of overflows, which was a patent and not a latent defect, and that it was not possible to say that the underdesign of the gutter was a contributing cause of the damage. However the Court of Appeal did not disturb the conclusions regarding the failure to disapprove the design.

14.6

Duty to Warn

A growing number of cases involve the issues of warnings, in particular whether there was a duty owed (to a client, other consultant or contractor) to warn of a risk whether the duty continued beyond certain stages whether a warning given was sufficiently loud and clear whether giving a warning discharged a duty of care.    

Some of these issues arise after the design stage and will be considered later. In Williams v Michael Hyde [2001] BLR 99, the facts of which are set out above, the Court of Appeal upheld a decision that the giving of a warning had not been sufficient to discharge a duty of skill and care, that there had been a further duty to pursue an investigation. A good example appears in Parkman v Cumbrian Industrials (2000) 78 Con LR 18, where HHJ Thornton QC concluded at para 193 that Parkman: “ should have, at the very least, provided BICC with advice which weighed up the competing advantages and disadvantages of a membrane and clay liner and any other possible engineering solution and advised, in connection with the membrane solution, that full reliance was being placed on the satisfactory installation of the membrane … and that such reliance was undesirable since there was no other means of preventing ingress through the cap in the likely event of the integrity of the membrane being breached.”

In Plant Construction v Clive Adams [2000] BLR 137, the Court of Appeal emphasised the need for warnings to be very loud and clear if necessary.

15.

TENDER STAGE

Even with competitive tendering, there may be duties of care affecting various aspects of the tender process, including:


prequalification of tenderers preparation of tender documents responding to enquiries assessment of tenders acceptance and preparation of formal contract documents.

Completely open competitive tendering is a high risk strategy for employers in construction. Although the tendered prices may provide the lowest obtainable, the level of assurance provided by the process that the work will be satisfactorily completed, as and when required, is also low. The employer is reliant on a promise to perform in the future. The law provides some backing to the promise, but legal remedies can only be regarded as a safety net, and even that of doubtful reliability, particularly since a low tender can be a sign of impending insolvency. Attempts are made to improve the level of assurance by prequalification of tenderers, or by two stages or similar procedures intended to introduce quality and reliability as criteria for selection. ‘Transparent’ procedures, showing objective criteria for the selection of companies to be i nvited to tender and for selection for the award of contracts, are needed to protect against challenges.

15.2

Prequalification of Tenderers

Where tenderers are to be prequalified, the person carrying out the prequalification faces potential claims from two sides: from companies excluded from tendering, and from employers when unsuitable tenderers have not been excluded. The former class of claims may also be directed against the employer. Would a disappointed contractor have rights, against the person who carried out the prequalification? There is no history of successful claims, but the recent case of Spring v Guardian Assurance [1995] 2 AC 296, in which it was held that an organisation owed a duty of care in tort to its former employee when preparing and providing a reference, suggests that the possibility may exist. On the other side, failure by an architect, engineer or quantity surveyor to warn an employer of the unsuitability of a tenderer can lead to liability even without a prequalification process. In Partridge v Morris (1995) CILL 1095, HHJ Hicks held that the defendant architects were liable for negligence in failure to consider the financial acceptability of tenderers.

15.3

Preparation and Issue of Tender Documentation

The tender documentation represents the employer’s one chance for the contractor to quantify obligations and risks within the tender price. It represents the employer’s chance to obtain commitments from the contractor as regards potential variations, for example through a priced bill of quantities, schedule of rates, or dayworks schedule. It provides occasion for the supply of site information to tenderers. The objective of the A/E/QS, if he is responsible for preparation of the tender documentation, should therefore be to ensure that it is complete and consistent. Completeness means that everything should be covered that is intended to be covered. Consistency means that the various documents comprised in the contract should be consistent with each other. Curiously little effort seems to go into checking the final documentation for consistency or completeness, although the impact on claims is very significant. If the A/E/QS is responsible for the issue of the documentation, the objective will extend to ensuring that the documentation is complete, in the sense of containing all the intended documents when it reaches the tenderer and that the tenderer receives all the documents. It is probably sufficient as a check for the latter purpose if the documents are listed, it is then up to the tenderer to check that the documents received comply with the list: Entores v Miles Far East Corp [1955] 2 QB 327. (That case relates to the duty of the recipient of a telephone call to ask


for words to be repeated if they are spoken but unclear, but the principle is of general application.)

15.3

Responding to Enquiries

During the tender period, the A/E/QS may be required to respond to enquiries from tenderers. This creates the possibility of the A/E/QS or the employer becoming directly liable to the tenderers or eventual contractor for the accuracy of the information supplied, and of the A/E/QS becoming liable to the employer if the employer is liable to the contractor. The employer may be liable to the contractor either through the tort of negligent misstatement or misrepresentation. The duty of care in supplying information at tender stage was considered by the Court of Appeal in Howard Marine & Dredging v Ogden (Excavations) [1978] QB 574. In Gran Gelato v Richcliff (Group) Ltd [1992] Ch 560, it was held that the vendor of property was liable to the purchaser for f alse statements made by the vendor’s solicitor. It would appear that the employer in construction may be liable in respect of false information supplied by the A/E/QS to tenderers within the scope of his authority. As between A/E/QS and employer, liabilities could arise if there has been a lack of skill and care in preparing the information or, perhaps, handling the supply of information. Information should be supplied to all tenderers equally and they should be fixed with receipt of the information. The standard of skill and care would thus include the operation of appropriate procedures.

15.4

Assessment of Tenders

In Blackpool & Fylde Aero Club v Blackpool BC [1990] 1 WLR 1195, the Court of Appeal held that the defendant local authority were liable for refusal to consider the plaintiff’s tender. The defendants had wrongly believed that the plaintiff’s tender had been submitted after the noon deadline, but it transpired that the box had been emptied early by the defendant’s employee and the tender had been delivered correctly. The local authority argued that liability was excluded in any event by a clause in the invitation to tenders stating that the local authority was not bound to accept the highest (in this case) tender or any tender, but the Court of Appeal rejected the argument. Unfortunately the measure of damages was not considered in the reported decision. Subsequently in Fairclough Building v Port Talbot BC (1992) 62 BLR 82, the Court of Appeal rejected a claim from a disappointed tenderer, stating that the duty was only to give proper consideration to the tender, and this had been done.

15.5

Acceptance and Preparation of Formal Contracts

In so far as the A/E/QS is involved in acceptance of tenders and preparation of formal contract documentation, he needs to be aware of the legal rules that apply and the pitfalls that can arise, to ensure that binding contracts are entered into when intended, with the intended documents incorporated, and vice versa. An A/E/QS undertaking this work would reasonably be expected to have an appropriate knowledge and understanding of the relevant principles of law. In Pozzolanic Lytag v Bryan Hobson Associates [1999] BLR 267, a project manager was held liable, after part of the works collapsed, for failure to ensure that the design and build contractor’s insurance arrangements satisfied the requirements of the contract.

16

CONSTRUCTION PHASE

16.1

Design and Information Supply

Timely Delivery of Drawings, Information and Instructions

During the construction phase the architect/engineer has an ongoing duty to complete the design and supply information to the contractor. This is to be implied as a matter of co-operation to enable the contractor to fulfil his obligations.


An architect owes a duty to his employer and to the contractor to ensure that plans, drawings and details are issued within a reasonable time. What is a reasonable will depend on the facts and circumstances of the case. Delay in issuing drawings, which is a common cause of complaint by contractors may lead to claims by contractors rendering the employer ultimately liable to the contractor. When is the contractor entitled to receive the information? What standing has the contractor’s programme in this contex t? There are several relevant cases. In Wells v Army and Navy Co-op (1902) HBC 4th Ed Vol 2 p346, Wright J stated that where the contract and specification did not prescribe the times at which detailed drawings were to be supplied by the architect, the contractor was “entitled to be supplied with them promptly upon request”. His decision was upheld by the Court of Appeal. However, in Neodox v Swinton & Pendlebury BC (1958) 5 BLR 34, Diplock J held that “from time to time” meant that the contractor could not expect all the information on day one, and he made the point that reasonableness had to be viewed from the position of the designer as well as the contractor. In Merton LBC v Leach (1985) 32 BLR 51, Vinelott J held that the contractor’s programme co uld serve as a written notice of requirements for information and drawings, in the context of JCT 63/77. On the other hand, in Glenlion v Guinness Trust (1987) 39 BLR 89, HHJ Fox-Andrews held that, although the contractor was entitled to finish early, the architect or engineer was not automatically bound, to provide information in accordance with a programme submitted by the contractor which showed early completion. The basis of the decision was that programmes submitted by contractors showing early completion are often unduly optimistic, that the contractor was not bound by his submission of the programme to complete by the date shown on it, therefore, as a matter of mutuality, the employer and architect or engineer should not be regarded as bound by the programme. In Royal Brompton Hospital v Hammond [2000] BLR 75 HHJ Hicks QC held that the consulting mechanical and electrical engineers were: “obliged to use reasonable skill, care and diligence to ensure that the co -ordination drawings were provided in time to enable the contractor to prepare and complete his works in accordance with the Contract programme”.

In the absence of any express term, the obligation to supply drawings and information is to do so within a reasonable time. Failure to meet this obligation is probably the most common cause of claims by contractors against employers. There is a lack of legal authority on the exact nature of the professional’s duty in this regard, no doubt because, in the vast majority of cases, if a Contractor can show that he has in fact been held up for lack of information, he would be awarded damages, and because, on the other hand, even if a point of time at which information should theoretically be available can be shown to have passed, it will not avail the Contractor if he has not suffered damage. In any particular case, the enquiry invariably becomes one of fact, and the precise identification of the point of time at which the Contractor needed the information, which is usually necessary to establish the quantum of his damages, is also a question of fact which cannot of course be of assistance in other cases on different facts. It is submitted by Hudson that the duty needs to be assessed in the light of the following criteria, among others:“(a) By f ar the most important, the Contractor’s actual progress, if slower than that shown by or to be inferred from any programme or the stipulated contract period (this will also go, of course, to questions of causation or damage); (b)

The stipulated contract period or intermediate dates (dates to be inferred from these will normally take precedence over ‘optimistic’ earlier dates


shown in any post-contract programme furnished by the Contractor, and over the wording of most contract provisions governing the submission and approval of such programmes …) (c)

The need of a Contractor for reasonable advance knowledge of the works for pre-planning purposes on his part, which obviously will vary considerably according to the subject matter of the information in question;

(d)

Whether or not the information relates to a variation;

(e)

Any agreed or indicated programmes showing the intended order of working or dates of completion of parts of the work;

(f)

Requests or notices by the Contractor indicating his need for the information in question.

In an engineering contract, the Contractor alleged an implied term that all necessary instructions and details should be given to the Contractor “in sufficient time to enable the contractors to execute and complete the works in an economic and expeditious manner and/or in sufficient time to prevent the contractors being delayed in such execution and completion”. It was held that it was clear from the terms of the contract that instructions would be given from time to time in the course of the contract, and that what was a reasonable time did not depend solely on the convenience and financial interest of the Contractor. Reasonableness had also to be regarded from the point of view of the Engineer and his staff and of the owners themselves. Other relevant matters affecting reasonableness would be the order in which the works were to be carried out as approved by the Engineer, whether requests for particular details have been made by the Contractor, whether the details related to variations or to the original works, and also the contract period. This list was not exhaustive, and what was a reasonable time was a question of fact having regard to all the circumstances of the case (Neodox Limited v Swinton and Pendlebury Borough Council). As far as the late instructing of variations is concerned, any liability of the A/E will depend on whether the reason for a later variation, and hence of any subsequent more detailed information, implies negligence or fault on the part of the A/E, either in failing properly to pre-plan the work or due to a defective design on his part requiring subsequent correction. Hudson says as follows: “ Difficult questions of fact can arise as to the time by which the Contractor is entitled to expect information from the Architect or Engineer to enable orders to be placed with … sub-contractors and suppliers. It is clear that an owner will usually have discharged his obligation if the information is made available in time to permit the sub-contractor to quote delivery or completion dates consistent with the Contractor’s programme or progress. Shortages or lengthened delivery dates have a habit of occurring very suddenly in industry, and the first that the parties may know of any difficulty may be when the subcontractor, on being asked to quote or receiving an order, announces that he cannot supply or do the work in the required time. It does not necessarily follow in such a case, it is submitted, that there has been any breach of duty by the Architect. Relevant facts in determining what was a reasonable time for such information to be given would include, it is suggested: (a) Whether the goods and services concerned were well known in the industry to be in short supply or the subject of long delivery dates, so requiring very early nomination by the A/E or perhaps provisional orders being placed even before the appointment of the main contractor;


(b) Whether the availability of the goods, by their nature, ought to be expected to fall within the Contractor’s knowledge (for example, reinforcement steel, or bricks); (c) Whether, in the light of both the above, he had made any request for the information or an early nomination; (d) Whether, on the other hand, the ma tter was purely within the owner’s sphere (for example, complicated pipes and specials requiring to be specially made for the contract) and, if so, whether reasonable enquiries and assurances as to availability had been made and obtained by the Architect or Engineer in good time.”

16.2

Ordering and Instructing Variations

If changes are to be incorporated as work proceeds, there needs to be a power to order the variation, not merely to request it. ‘Power to order’ means it must be within a binding contract, which means there must be ‘machinery’ for adjusting the price: Foley v Classique Coaches [1934] 2 KB 1. A mere agreement to agree is not sufficient. In ordering variations, the architect or engineer acts as the employer’s agent. This was stated by HHJ Davies in Partington v Tameside MBC (1985) 32 BLR 150, where he said: “The architect... acts as the employer’s agent in issuing instructions to the contractor, in accordance with the terms of the contract, and for the purpose of requiring variations and sanctioning variations required by the contractor.”

The issues which arise in connection with variations, include : whether the Architect/Engineer is bound to order a variation when the specified work proves difficult or impossible; what if the Architect/Engineer denies that an instruction amounts to a variation; whether a variation order is within the scope of the power conferred by the contract. The House of Lords’ decisions in Tharsis Sulphur & Copper Co v M’Elroy (1878) 3 App Cas 1040 and Thorn v London Corp (1876) 1 App Cas 120 militate against any general duty on the architect or engineer to order variations to assist the contractor. In both cases it was held to be the contractor’s risk whether it was possible to construct the works as specified; the costs of changing to alternative methods or specifications were to be borne by the contractor. On the other hand, an agreement by an architect or engineer as to what should be done to overcome a problem may sometimes be construed as a variation order, even though the agreement was given to assist the contractor in his own difficulties: Simplex v LB St Pancras (1958) 14 BLR 80. The argument may also be raised that, under some forms of contract, the contractor is not permitted to deviate from the contract without a variation order. As a general principle, where an Engineer denies that an instruction is a variation, the courts may nevertheless hold that it is a variation: Brodie v Cardiff Corp [1919] AC 337; Mitsui v A-G for Hong Kong (1986) 33 BLR 1. Most standard forms of construction contract couch the variation power in very wide terms. However, there are limits, as demonstrated by Sir Lindsay Parkinson v Commissioner for Public Buildings & Works [1949] 2 KB 632. That decision suggests that the scope of the power may depend on the pricing arrangements provided. The decision of the House of Lords in Ranger v GWR (1854) 5 HL Cas 72 provides authority for the proposition that if the contractor accepts an instruction without protest, he cannot afterwards argue that it was outside the contract variation powers. This leads to the contractor’s dilemma: if he protests that work ordered is outside the scope of the variation power, he cannot at the same time insist on being employed and paid to perform the work.


16.3

Approval and Instruction of Method of Working & Temporary Works

Architects and engineers face additional potential liabilities if they undertake approval of methods of construction or give instructions as to methods. Duties to do this may be imposed by the construction contract, but there is no implied duty. In Clayton v Woodman [1962] 2 QB 533, an architect instructed a contractor’s workman, a bricklayer, to proceed with cutting a chase in an existing stone gable wall in accordance with the contract, without any mention of shoring or support, despite t he workman’s protest that it was unsafe. When the chase was cut, the wall collapsed and injured the workman. The workman sued the architect. The judge at first instance, Salmon J, agreed that the “law imposes no duty upon the architect to advise the builders or their servants about their safety” but held that because the architect chose to give the instructions direct to the bricklayer he “undertook a duty towards the bricklayer to take reasonable care for his safety”. The decision was reversed by the Court of Appeal on its facts; they found that the architect had not done sufficient to usurp the contractor’s responsibility for safety, but even the Court of Appeal acknowledged that if the architect had directed the work when he knew or ought to have known that it would have been done in a dangerous manner, he would have been subject to a duty of care.

The architect should be extra vigilant to carry out supervision or inspection of critical part of the works personally where serious risks are involved. In Clay v AJ Crump & Sons Ltd [1964] 1 QB 533, an architect had allowed a demolition contractor to leave a wall standing in a dangerous state. When the building contractor’s workmen arrived on site some weeks later, it fell on one of them before they had started any significant work. The architect was held liable to the workman; his share of the blame and liability to contribution was assessed at 42%. The Court of Appeal held that the architect’s duty “involved taking precautions or giving instruction for them to be taken so that the work could be done with safety” and that “the builder’s workmen were within the class of people to whom the architect owed a duty of care”. It was held that the Architect was negligent because he merely relied on the demolition contractor’s verbal assura nce that it was all right to leave the wall standing without him inspecting it personally. Unless the building contract expressly stipulates to the contrary, the Contractor is entitled to choose his own methods of working or temporary works; the corollary of this is that the Contractor is not entitled, when faced with difficulties, to demand or require instructions as to how to overcome them. The Architect’s duty is normally confined to stipulating the final permanent result required, and if this has already been done, he is under no further duty to assist, and if inclined or requested to do so, should normally be careful to adopt a facilitative attitude rather than give mandatory instructions. If an Architect or Engineer sees the Contractor using, or proposing to use, a method of working which he considers potentially unsafe or likely to fail in its intention, his duty to the Employer will require him to balance the advantage to the Employer of the method he himself prefers against the fact that by intervening and giving an instruction, he may expose the Employer to a financial claim, if the Contractor can show that his own method would have been both safe and equally efficacious (unless, of course, the building contract expressly prescribes the method of working or provides that the Contractor’s price is to include for any one of various methods to be chosen at the discretion of the Architect or Engineer.) The Employer’s interest may require the Architect to intervene in the Contractor’s method of working or temporary works if he has power to do so under the building contract, in the following situations. “(a) Where the contractor’s methods of working are contrary to what is specified (almost always the basic reason for specifying a particular working method or practice expressly in the specification is its relevance to the satisfactory quality of the final permanent work). Here there will, of course, be little doubt as to the power to enforce the contract, since there is breach of an express term of the contract;


(b) Where, in the absence of express designation of the required working methods, those being used by the contractor are likely to imperil the quality of the permanent work (and usually will, therefore, constitute a breach of the implied term of good workmanship, it is submitted). Here an implied power to intervene may be less evident; (c) Where the contractor’s methods are unsafe, and an accident would delay the project to the serious prejudice of the owner, or might damage adjoining property, exposing the owner to claims whether for property damage or personal injuries, for example; (d) To assist a contractor who has got into difficulties by relaxing the specification or varying the permanent work where the owner’s interest in speedy completion is sufficiently important (though on terms that no additional payment will be due from the owner).” (Hudson’s Building and Engineering Contracts – 11th Edition)

16.4

Recommending Contractors

In recommending contractors, an architect is expected to make reasonable enquiries as to the solvency and competence of the contractor although he does not guarantee the solvency or capacity of the contractor. An architect will be liable to his employer if he carelessly gives appositive recommendation in favour of a contractor. In Valerie Pratt v. George J. Hill (1987 38 6 BLR 25 ) an architect who recommended two builders as “very reliable” was held liable for negligent misrepresentation when the chosen builder proved to be very unreliable. More recently, in Partridge v Morris (1995) CILL 1095, the Judge held that the Architect’s duty of advising the Employer of the relative merits of tenders extended to the consideration of financial acceptability. He said: “ In my view the duty which the defendant undoubtedly undertook of advising the plaintiff on the relevant merits of the tenders extended to consideration of the financial acceptability of the tenderers. It was a matter upon which the plaintiff needed advice; there was no other member of the professional team, as there might be, more immediately concerned with that responsibility, and it therefore remained with the defendant as the plaintiff’s general professional adviser in relation to the review of tenders and the choice of a contractor ”.

The Judge held that the Architect should have undertaken one or more of the following :

• •

6

checks on the Contractor’s financial standing: Checking with Builders Merchants; Obtaining a bank reference;

In Pratt v George Hill & Associates (1987), an Architect wrote to their client saying that two firms of contractors were “very reliable”. The client chose one of them. In fact, the chosen Contractor was wholly unreliable, leaving the work in such a state that it needed to be effectively reinstated from slab level. The Client had paid £2,000 on interim certificates and subsequently incurred costs of just under £4,000 in an arbitration against the Contractor before the Contractor became insolvent. The judge found that the Architect had been in breach of their duty of care to their client and that the disastrous state of the works was due to the unreliability and incompetence of the Contractor, but disallowed these two sums on the ground that they actually arose from the insolvency of the Contractor. The case then went to the Court of Appeal, which held that as a matter of causation, the losses concerned were caused by the Contractor’s lack of competence and the state in which he had left the work, and the two sums were recoverable by the Claimant.


• • •

Obtaining trade credit references; Making enquiries of other Architects as to the Contractor’s financial standing; Undertaking a Company Search or asking the Contractor themselves for their audited and latest management accounts.

He held that the failure to make the necessary enquiries was causative of damage because, but for the failure by the Architect to make one or more of these enquiries, the Contractor would not have been selected.

16.5

Extensions of time

Where the architect or engineer is required by the construction contract to take decisions as to the assessment and granting of extensions of time for completion, it appears that the duty is personal and must be exercised at the appropriate time. It is difficult to establish general principles on this topic, since the duty arises from the particular extension of time clause in the relevant contract. Not only must the duty be derived from the particular clause, but the decisions in the cases, such as those described below, must be read in the context of the relevant contracts. In Amalgamated Building Contractors Ltd v Waltham Holy Cross UDC [1952] 2 All ER 452, Lord Denning disagreed that the architect must always give the contractor a date at which he could aim in the future. He observed that on principle there was distinction between cases where the cause of delay was due to some act or default of the employer, and cases where it was not. In an Australian case, Perini Corp v Commonwealth of Australia (1969) 12 BLR 82, Macfarlane J stated that the Engineer, who was the employed director of works, had a duty to deal with applications for extensions of time within a ‘reasonable time’ and he defined a reasonable time as follows: “ The measurement of a reasonable time in any particular case is always a matter of fact. Plainly the director must not delay, nor may he procrastinate, and in my opinion he is not entitled simply to defer a decision. On the other hand he is, in my opinion, and this follows from the nature of his obligation to give his own personal decision on the point, necessarily obliged to have available for that consideration such time as is necessary to enable him to investigate the facts which are relevant to make it”

16.6

Supervision

The conventional role of the architect and engineer involves supervision of construction on behalf of the employer. The intention is that the architect or engineer should police the contractor’s work to minimise defective work, and ensure that the employer does not pay for work that is defective. The difficulty for architects and engineers is that, following Sutcliffe v Thackrah, this appears to make them underwriters of the quality of the contractor’s work, particularly in the event of insolvency of the contractor. Architects, who do not usually have a permanent presence on site, have attempted to redefine the supervision role, calling it ‘periodic inspection’, to avoid the risk, but the cases show a reluctance on the part of the judiciary to let supervisors off the hook. On civil engineering projects, consulting engineers have traditionally had the permanent presence of a resident engineer on site, but recently there has been a tendency to leave the employer to employ the resident engineer and supervise directly. In most standard construction contract, the A/E’s primary responsibilities as regards supervision are to ensure that works are carried out to the standard dimensions, form and quality which the contract requires and with the furnishing of any further information which the contractor may require to enable the works to be completed within the contract time for completion. It is a part of the normal duties of an architect to supervise the building works for which he is engaged. Under contract, his normal duties of supervision is to ensure that the building works are carried out according to the plans, specifications and terms of the building contract. Under


the Act, he has to ensure that the building works are carried out in accordance with statutory requirements. His supervision duties include : (i) the prevention, detection and correction of defective work. (ii) intervention or non-intervention, particularly bearing in mind the Contractor’s fundamental obligation to complete the works for the agreed price, including whatever contingent expenditure may be necessary to overcome difficulties, if the Contractor’s working methods or temporary works prove unsuccessful or cause concern – involving a judgment as to whether or not, in the Employer’s best interest, to intervene and give instructions. (iii) Interventions to correct any indications of potential failure of the permanent design. An architect who undertakes to supervise the works must exercise due care during construction to ensure that the materials and workmanship conform to the contractual requirements. Failure to do so may render the architect liable to the employer. In Sim & Associates v. Alfred Tan (1994) 3 SLR 169, the employer sued his architect for breach of duties in certifying defective works for payment and neglecting to call on the main contractor to rectify and complete defective works. The Singapore Court of Appeal held that in the absence of any provision in the building contract requiring a higher degree of supervision, an architect is merely required to give the buildings reasonable supervision and whether he has breached the requisite standard expected of a reasonably qualified architect. The employer’s claim against the architect for negligent supervision was dismissed on the grounds that there was insufficient evidence to prove that the architect had been negligent in supervision.

The facts of the Alfred Tan (1994) case are as follows:The architects were engaged by the building owner to construct a bungalow. The specifications to the original building contract provided for marble to be affixed to the external walls of the bungalow using metal anchorages (“mechanical method”). At the time of the award of the tender, the external m arble cladding was omitted from the contract due to high costs. However it was subsequently reintroduced using a less costly alternative method known as the adhesion method. There were delays in the construction of the bungalow. The external marble cladding was not fully completed by the main contractor because of shortage of marble slabs supplied by building owner. Building owner and Main Con (MC) agreed that the MC demobilise and would only remobilise when owner was able to supply the marble slabs and after new rates have been agreed between themselves for remobilisation. Subsequently disputes arose between building owner and MC on the rates for remobilisation. Architects tried to mediate the dispute failed and they discharged himself as he was not paid his fees. Owner engaged a consultant to prepare a report of the defective works and engaged another contractor to carry out the rectification works and the uncompleted works. Owner then sued the architects alleging that the architect breached their duties in certifying defective works for payment and neglecting to call upon the main contractor to rectify the defective works and complete the uncompleted works.

The Court of Appeal of Singapore held that the building owner had failed to discharge the burden of proving that the architects, by approving the adhesion method had approved a defective method of affixing the marble cladding. It was held that the building owner must show a failure by the architect to supervise the building works in a manner or the extent which a reasonably competent architect would have done. There is no duty to discover defective works at the time they were been done or soon after they were done.


One factor calling for a higher degree of supervision would be where bad work by the Contractor had already been seen or reported:“I think that the degree of supervision required of an Architect must be governed to some extent by his confidence in the Contractor. If and when something occurs which should indicate to him a lack of competence in the Contractor, then, in the interest of his Employer, the standard of his supervision should be higher ”. (Sutcliffe –v- Chippendale & Edmondson).

In this case, the Judge accepted evidence that the Quantity Surveyor owed no duty in respect of defective work and that it was the Architect’s function to instruct him whether or not to disallow the value of defective work from interim certificates, although it is recognised that generally speaking a Quantity Surveyor who sees, or should have seen, defective work when visiting site will owe a duty to the Employer at least to report it to the Architect for action or final decision by the latter. Most claims against Architects and, to a lesser extent, Engineers, have arisen out of their failure to note and report on deficiencies in the Contractor’s works; the authorities make it graphically clear that the “tradesman’s work” of supervision is just as importan t as the apparent artistry involved in the design. One of the best known observations about the nature, scope and extent of an Architect’s specific duty to supervise the works appears in the speech of Lord Upjohn in the case of Eastham Corporation v Bernard Sunley & Sons Limited (1966) AC 406 ; he said: “As is well known, the Architect is not permanently on the site but at… intervals it may be of a week or a fortnight, and he has, of course, to inspect the progress of the work. When he arrives on the site there may be very many important matters with which he has to deal. The work may be getting behindhand through labour troubles; some of the suppliers of materials or the subcontractors may be lagging; there may be physical trouble on the site itself, such as finding an unexpected amount of underground water. All these are matters which may call for important decisions by the Architect. He may in such circumstances think that he knows the builders sufficiently well and can rely upon them to carry out the job; but it is more important that he should deal with urgent matters on the site and that he should make a minute inspection of the site to see that the builder is complying with the specifications laid down by him… It by no means follows that, in fail ing to discover a defect which reasonable examination would have disclosed, in fact the Architect was necessarily thereby in breach of his duty to the building owner so as to be liable in an action for negligence. It may well be that the omission of the Architect to find the defect was due to no more than an error of judgement, or was a deliberately calculated risk which, in all the circumstances of the case, was reasonable and proper”. In Corefield v Grant & Others 29 Con LR 58, the Judge was not impressed by an argument that the Architect’s supervision was negligent simply because he had spent so few hours on the site. He said that what was adequate by way of supervision was not to be tested by the number of hours worked on site or elsewhere, but by asking whether it was enough to do all the tasks that an Architect had to perform. He said that at some stages of some projects exclusive attention may be required to the job in question: at other stages, it will be quite sufficient to give attention to the job only from time to time. On the facts, he found that the Architect was obliged to carry out a number of tasks, including supervision, requiring a skilled and experienced assistant which he did not have. The mere fact that the Contractor’s work was defec tive will not necessarily lead to a finding that the A/E failed to supervise the work properly. That is particularly true of defects which are the result of deliberate actions on the part of the Contractor, as distinct from negligence or incompetence.


In Kensington and Chelsea Area Health Authority v Wettern Composites 1 Con LR 114, the judge found that the fact that the Architect had become aware during the works of poor workmanship and “a lack of frankness” on the part of the relevant subcontractors mea nt that the standard of supervision should have been higher. He also found that the degree of supervision should be greater where poor workmanship could result in physical danger. A helpful statement of the duty (although he preferred to avoid the word ‘supervision’) is provided by HHJ Kershaw QC in Lancashire & Cheshire Association of Baptist Churches v Howard & Seddon [1993] 3 All ER 467 at 470: “The traditional role of an architect is not to supervise the work, for that is the role of contractor’s supervisory staff, but rather to exercise care to see that the rights of employer (ie building owner) under the building contract to have bad work put right exercised and to ensure that the employer does not pay for unsatisfactory work materials.”

16.7

the the are and

Duty to Review Design

The supervision or inspection duty has an important secondary element, namely the duty to review design during construction in the light of what is observed. The point is well made in two cases. In Brickfield Properties v Newton [1971] 1 WLR 862, Sachs LJ stated, “The architect is under a continuing duty to check that his design will work in practice and to correct any errors which emerge.” In Chelmsford District Council v Evers (1983) 25 BLR 99, HHJ Newey stated: “I think that in the absence of provision to the contrary there must be an obligation upon an engineer who contracts to design and supervise the execution of his design, to review his design as necessary until the works are completed.”

This continuing duty to review the design was essential in the early days of engineering, when it was often necessary to test the prototype on site to check its capacity and to make adjustments as found necessary. In Department of National Heritage v Steensen Varming Malcahy (1998) 60 Con LR 33, HHJ Bowsher acknowledged the general duty and commented: “I do agree that where a designer adopts an experimental or unusual approach, the duty on him to keep his design under review is particularly high.”

This raises a question: is a designer necessarily to be adjudged negligent in the original design when the need for a design change becomes apparent during construction? Also, it should be appreciated that changes to procurement arrangements which exclude the designer from supervision or inspection during construction may leave a gap in the function of reviewing the design. The duty to review design has also arisen as an issue in connection with commencement of the limitation period. In New Islington and Hackney HA v Pollard Thomas & Edwards [2001] BLR 74, the claimant argued that the defendant architects had a continuing duty to review their design after completion. Dyson J held that the question asked by the claimant when a problem appeared had not been such as to require the architects to review their design and that there was no requirement for the architect to do so, after practical completion, as part of the services for which he was originally engaged.

16.8

Measurement, Valuation and Certification

Almost all building contracts require the building works to be carried out to the satisfaction of the architect. Where the terms of the building contract require the architect to certify payments to the contractor, the architect has a duty to ensure that the works are carried out to his satisfaction before he can certify payment. In issuing certificates, an architect has to act fairly and impartially as between the employer and the contractor. Normally, as between the Employer and the Contractor, the Employer does not warrant that the certifier will be skilful or competent, but only that he will be honest and independent in exercising


that function wherever, under the terms of the contract, he is required so to act. It will, accordingly, be a breach of contract, as against the Contractor, if the Employer applies pressure and seeks to influence the A/E in reaching his decisions when acting in that capacity (Sutcliffe – v- Thackrah). In Sutcliffe v. Thackrah (1974) an architect knew of defective work by the builder but gave no instructions to the quantity surveyor to make deductions from interim certificate valuations. The contractors subsequently became insolvent after the employers had honoured the certificates. In an action against the architects, the House of Lords held that the architect was not acting in an arbitral or quasi-arbitral capacity, and was in breach of his contract with his client in not giving instructions for deductions from interim valuations and certifying the unreduced sums. As regards valuation, in particular the fixing of rates for additional or varied work, the function of the architect, engineer or quantity surveyor may be framed by the contract either as a single role, to fix the rates as an independent third party, or as a two-part role whereby valuation is treated as potentially a two-stage process. In the latter situation, the A/E/QS is first in the position of attempting to agree rates with the contractor, but if agreement cannot be reached, he is expected to assume an independent role to fix the rates. While the A/E/QS is fixing rates, he is expected to act as an independent third party but, it is submitted, the A/E/QS negotiating in order to agree rates is actually acting as an agent of the employer. The issuing of certificates may involve some discretionary elements, but it is principally concerned with the administration of the contract as it is written. This point was made by HHJ Davies in Partington v Tameside MBC (1985) 32 BLR 150, as follows: “The occasions when the architect’s discretion come into play are few... The indications given by these provisions seem to me to be that ,... (ii) the issue of certificates generally is part of the machinery of implementing the contract in accordance with its terms as agreed by the parties, rather than part of a contract-modifying function vested in the architect. In my view therefore, the architect in his capacity as administrator of the contract, rather than agent of the employer, has no power to modify or supplement the terms of the contract as agreed between the parties... When [his functions] are subject of complaint, it is on the ground that they do not properly reflect what the parties agreed.”

In Machin v Adams (1997) 59 Con LR 14, the question arose of the liability of an architect to an unknown third party in respect of a certificate. The facts of the case are rather unusual, but the Court of Appeal held that the architect was not liable since the evidence did not establish that the plaintiff had relied on the certificate, and the architect did not have actual or inferential knowledge of the purpose for which his certificate was being used.

16.9

Duties to contractors and subcontractors

Under most building contracts, no privity of contracts exists between the architect and the contractor. However, the acts and omissions of the architect can affect the contractor directly.The architect is under a duty to act fairly and impartially as between the employer and the contractor in issuing certificates. Until recently, it was thought that an architect does not owe the contractor a duty of care in issuing certificates. In 1975, Pacific who were contractors entered into a contract with the Ruler of Dubai for dredging work in the Persian Gulf using FIDIC conditions of contract. Halcrow were the engineers. The work was delayed because of the presence of hard materials and the Pacific made claims for extension of time and additional expenses which were rejected by Halcrow. After arbitration proceedings commenced, the Ruler agreed to pay Pacific som e₤10 million in full and final settlement of all claims against him. Pacific then claimed against Halcrow ₤45 million being the unrecovered balance. The Court of Appeal dismissed Pacific’s appeal and upheld the judge’s decision in holding that Halcrow owed no duty of care in certifying or in making decisions under clause 67 of the conditions. Pacific Associates v. Baxter (1988)

16.10 Correction of Defects Perhaps the most dreaded duty of an architect is the detection of defects. Under most standard


form contracts, the defects liability period or maintenance period commences with the issue of the issue of the completion certificate. During this period, an architect has a duty to detect defects obviously appearing in the works or patent defects. He may be liable to the employer if he fails to detect defects and notify the contractor to rectify or make good defects, especially if the contractor becomes insolvent (See Sim & Associates v. Tan Alfred (1994) ). Most contract forms supplement the contractor’s completion obligation by giving power to the Architect/Engineer to require the contractor to remove or re-execute any work which is not in accordance with the contract even before completion has occurred These clauses generally give power to the architect/engineer to give notices to the contractor of the existence of defects covered by the clause. Defects covered by the clause will always include defects caused by non-compliance with the contract but often clauses impose an obligation to "maintain" or to "repair" the works, and these obligations will be wider than simply correcting non-compliance with the contract. There is usually provision for the architect/engineer to issue a schedule of defects at the end of the period. The contractor is then obliged to return to the site to make good the defects at no cost to the employer.


17.

Liability of the Quantity Surveyor

In theory, the Quantity Surveyor (QS) should receive complete drawings and a specification from the Architect before he starts to prepare the Bills of Quantities. An important aspect of the QS’s work will be the drafting of the preambles to the various bills and of the individual items in the bills, which must embody the Architect’s spec ification. The bills will normally form the contractual basis of valuing variations of the work, as opposed to the discrepancies between billed and actual quantities, arising from errors or inaccurate estimates of the quantities, which it is the purpose of a measured contract, but not a lump sum contract, to correct. There is a lack of cases on the standard(s) of skill or care owed by a QS to the Employer. Since, however, his task involves very large numbers of arithmetical calculations, it seems that an occasional slip or error may be insufficient to sustain an allegation of professional negligence against him. In the case of London School Board –v- Northcroft in 1889 a school board employed a QS for measuring up buildings of a value of £12,000 which had been completed. They brought an action against him for negligence in making two clerical errors in the calculations, whereby the board had overpaid two sums, one of £118 and the other of £15. It was held that as the QS had employed a competent skilled clerk who had carried out hundreds of intricate calculations correctly, the QS was not liable for these two errors. Given his professional status and skills, it is argued that a QS’s staff are employed for the Employer’s benefit, should he have an opportunity to do so, even though some other adviser, such as the A/E, must bear the prime responsibility. If he notices defective work while visiting for the purposes of making his valuations, for example, he should bring what he has seen to the A/E’s attention, in case the latter has missed it. Considering the high degree of skill professed by QSs in the detail of construction methods, there would seem to be no reason why they should not also be joined as defendants by an Employer where, for example, the defects were so glaring that they should have been seen by them in the course of valuation inspections, as well as by the A/E. The mere fact that the mistake in question may be a simple mathematical error will not be sufficient to rebut an allegation of negligence. In Tyrer -v- District Auditor of Monmouthshire there were a number of successful claims against the QS, including the allegation that the QS had approved excessive quantities of prices which led to irrecoverable overpayments to the Contractor. There was, in addition, a simple mathematical error in issuing an interim certificate. The Judge found that the error could have happened at any time, but “the obligation was on the appellant to ensure that adequate checks were made”. In the absence of any contract drawings or specifications, the bills must contain a full description of all the work necessary to achieve the desired result. In the case of Keete –v- King, the lack of provision of any shoring in the bills constituted “a grave omission”. The Court held that a duty was owed to the Employer to prepare contract documents which were sufficient for the purpose of the erection of the building. If there are drawings or specifications, the bills must be consistent with them so as to provide a comprehensive and clear summary of the building works required. Discrepancies between the contract documents are usually provided for in the standard forms of contract, and are normally resolved by the issue of an instruction which can entitle the Contractor to additional payment. In such circumstances, the Employer may be able to recover such monies from the negligent professional who failed to spot the discrepancy in the contract documents before they were signed. If the QS is engaged by the Architect, the Employer will ordinarily be able to look to the Architect if there are any errors in the bills, and the Architect will then of course pass on any such claims to the QS. Depending on the facts, the QS may owe a duty of care to the Employer.


It is only in extremely rare circumstances that the QS preparing bills or other contract documents will owe a duty of care to the Contractor. The QS, like any construction professional, owes a duty to the person by whom he is employed to carry out his work. In general, the test is whether he has failed to take the care of an ordinary competent QS in those circumstances. As in the case of an Architect or Engineer, a QS providing an estimate must assume, in the absence of any express instruction to the contrary, that the Employer is looking for a forecast of the likely final cost of the project, and not an estimate based on current prices. An estimate must make an allowance for, or give warning about, likely inflation and contingencies. The QS must clearly indicate the extent to which his estimate is subject to any variation or possible change. The estimates of the building costs themselves must be reasonably accurate and capable of being justified in detail. In the case of Savage –v- Board of School Trustees, the estimate of $110,000 was twice given in respect of proposed works. When tenders were received, the lowest was $157,800, 43% over the estimated cost. The scope of the project was significantly reduced. The claimant again estimated that the project would cost no more than $110,000, yet the lowest tender for even the scaled down project was $132,900. The Judge commented “So on this one school, the plaintiff was three times gravely in error in his estimates. And three times are a lot”. The finding that the plaintiff had been negligent was based largely upon the scale of the underestimation, and the frequency with which it was repeated. But on analysis, the Court’s conclusion was based in large part upon a careful consideration of the plain tiff’s workings, and the conclusion that “much of the plaintiff’s difficulty was caused by his methods of checking and re-checking his estimates”. The mere fact that an estimate is very significantly less than the final cost is not, on its own, enough to justify a finding of negligence. In Copthorne Hotel (Newcastle) Limited v Arup Associates, the claimant alleged negligence in respect of the defendant’s estimate for piling works. The estimate allowed £425,000 for this work; the successful tender was for £930,000. The Judge said of this discrepancy as follows:“I hope and believe that I am not over simplifying if I record the impression that the plaintiff’s main hope was that I would be pe rsuaded to find in their favour simply by the size of the gap, absolutely proportionately, between the cost estimate and the successful tender . “

“The gap was indeed enormous. It astonished and appalled the parties at the time and it astonishes me. I do not see, however, how that alone can carry the plaintiff home. … Culpable underestimation is of course one obvious explanation of such discrepancy, but far from the only one. The Contractor may have over-specified from excessive caution, or to obtain a greater profit, or to suit the drilling equipment available, or for some other reason. Market conditions may have changed, or have been subject to some distortion outside the knowledge or foresight of a reasonably competent professional adviser. These possibilities are not mutually exclusive among themselves or as between them and Arup’s negligence, but without evidence on which I can make a finding as to the sum which Arup, acting with due care and skill, should have advised… I am not in a position to find that negligence was even one of the causes.”

If the Employer specifies a cost limit, the QS must consider whether the limit is likely to be exceeded and give any relevant warning. In Flanagan –v-Mate the QS’s fee claim failed because no warning had been given by them to the Employer that the Employer’s cost limit could not b e achieved. Although a building project might have cost the Employer more than he reasonably anticipated, it will also be worth more than would otherwise have been expected, and the basis for the assessment of damages arising from a negligent estimate is far from clear cut.


The Roles of the Architect, Engineer and Quantity Surveyor

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