Certification case study no.2

This case concerned a consultant appointed in 2000 to inspect the progress of a project, which involved the construction of a small private dwelling.

Griffiths & Armour
20 September 2014

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At practical completion, the consultant was asked to certify that the work had been completed to the required standard. The wording of the certificate was relatively ambiguous, stating that “all work to date is structurally sound and appears to have been carried out in accordance with plans approved by the local authority under the Building Regulations.” 

However, around the time that this certificate was being considered by the consultant, it appears that the owner of the dwelling, who had been asked to provide his bank with a new build warranty, persuaded the consultant to issue the certificate in the style of such a warranty.

“Whilst it was apparent that the problems were predominantly down to a poor quality of construction workmanship, the contractor was insolvent and unable to meet any claim. This left the consultant as the principal target for litigation.”

The certificate was, therefore, issued by the consultant with a covering letter, which specifically referred to the certificate as being a “structural guarantee” of the dwelling valid for a period of 10 years from practical completion.

Subsequently, the property began to suffer from movement due to defects in the construction of the foundations on which it had been constructed. Whilst it was apparent that the problems were predominantly down to a poor quality of construction workmanship, the contractor was insolvent and unable to meet any claim.

This left the consultant as the principal target for litigation, although one might argue that the manner in which the practical completion certificate was issued might have placed the consultant at the centre of any disputes regarding the building structure regardless of the solvency of the contractor. 

Outcome

Given the wording of the covering letter, the claim was almost impossible to defend, irrespective of whether the consultant’s design work contributed to the defects in any way.

One further point to note in relation to this example is that many professional indemnity insurance policies exclude cover for express warranties or guarantees. Giving such undertakings could, therefore, result in an uninsured claim in certain circumstances.