Strict liabilities case study no.1

The example concerns a case heard before the Technology & Construction Court in 2009, Costain Ltd -v- Charles Haswell & Partners Ltd.

Griffiths & Armour
04 September 2014

Twitter FacebookLinkedIn

Print

Topics 

Case study

In association with

As is often the case with construction disputes that reach the Courts, the dispute was complex and there were numerous issues the Court had to consider, only one of which is of direct relevance to this particular chapter of our publication.

The facts of the case were broadly as follows:

Costain engaged Haswell to provide civil engineering advice in relation to a contract for the design and build of new water treatment works and pumping station. The employer’s specification required the works to be constructed so that the “total and differential settlement of foundations and base slabs shall not exceed 25mm and 10mm respectively”. This is a tight tolerance by normal standards, but was felt necessary to preserve the integrity of the pipework connecting the various buildings on site. Haswell were asked to design the foundations and were made aware of this specification. 

“The Judge’s comments are important as they put into context the type of strict liability clauses that appear in many consultancy agreements and confirm that such clauses will apply in isolation from other duty of care provisions.”

Haswell prepared a design which recommended that the foundations of certain buildings could be constructed using conventional methods, rather than piling, provided that the ground was pre-loaded to take out any significant settlements. The pre-loading was to be achieved by an earth mound 3-4m in height, which would be left on site  for a period of 6-8 weeks. 

Costain commenced work on site in June 2002 and the surcharge mound was constructed to a height of 4m by the end of July. At this point concerns began to arise regarding the effectiveness of the ground surcharge works and a number of tests were undertaken which established that the predicted settlement of the surcharged ground would exceed the tolerances specified by the employer. 

Costain instructed Haswell to prepare a new foundation design based on a piled solution and piling works commenced later that year. Haswell were then pursued for the additional costs involved in abandoning the original design and implementing a piled foundation solution. 

That part of the case which is of interest to us here relates to the obligations imposed on Haswell in the consultancy agreement it entered into with Costain. There were two clauses on which Costain sought to rely in bringing its claim, which stated:

7.0 Consultant’s Warranties

The Consultant warrants that:

7.2 In the provision of the Services the Consultant shall exercise all reasonable professional skill, care and diligence.

7.3 …

7.4 Any part of the works designed pursuant to this Agreement if constructed in accordance with such design, shall meet the requirements described in the Specification or reasonably to be inferred from the Tender Documents or the Contract or the written requirements of Costain and designed in accordance with good up to date engineering practice and with all applicable laws, bylaws, codes or mandatory regulations and in all respects with the requirements of the Contract.”

Costain sought to argue that Haswell was liable under the provisions of clause 7.4 for the additional costs of the piled foundations. 

Read in isolation, clause 7.4 clearly imposes a strict liability on Haswell to make sure that what they had designed could be constructed within the specified tolerances. The statement in the opening three lines of the clause is quite definitive; “the works … if constructed in accordance with such design … shall meet the requirements”. However, could it be argued that this strict liability is limited by the provisions of clause 7.2, which states that the Services should be performed with reasonable skill and care? This is the argument that Haswell advanced in Court; effectively that the failure of the surcharge mound to achieve its design intent could not have been foreseen with the exercise of reasonable skill and care and, hence, they should not be liable. 

The Judge took a different view. He found that the obligation in 7.4 is indeed a strict liability, which is in contrast to that set out in clause 7.2. His concluding comments note that clause 7.4 imposes an obligation of strict liability to, “in effect, ensure that, if any part of the works is constructed in accordance with Haswell’s design, that part shall meet the requirements described in the Specification including the requirements in relation to permitted settlement tolerances”. It would, therefore, be immaterial whether Haswell had or had not exercised reasonable skill and care in relation to the design – if the construction was in accordance with the design, then it had to meet the specification; if it didn’t, Haswell were liable.

Outcome

As it happens, the Court went on to find that Haswell was not in breach of this clause because that element of the works in question had not been constructed in accordance with the design (the original foundation design was never constructed, but was replaced with a new design), so was not caught by the provisions of 7.4. However, the Judge’s comments on clause 7.4 are important as they put into context the type of strict liability clauses that appear in many consultancy agreements and confirm that such clauses will apply in isolation from other duty of care provisions unless the two are expressly linked.