04 September 2020
“We are told that this is the end” sang a Welsh band in the 1990s; whilst this is unlikely to be the case for disputes concerning the extent of design responsibilities, a recent TCC decision explores some interesting points concerning the interpretation of such obligations in construction contracts.
Blackpool Borough Council v Volkerfitzpatrick & Others [2020] EWHC 1523 (TCC)
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The case itself concerned the construction of a seafront tram depot in Blackpool. Construction was completed in 2011 and by 2015, significant corrosion was occurring “faster” than expected. The substantive claim was heard by the TCC in early 2020 and considered a wide range of complex issues. In a whistle-stop tour, we highlight several interesting points arising from the principal question: whether the depot met its intended design life.
As is normal, the Defendant had agreed to carry out its design obligations to the standard expected of a professional designer. However, it also warranted that, when completed, the works would satisfy any contractual requirement. The contract had several provisions requiring a design life of 20, 25, or 50 years, depending on the particular element in question. In an initial step, the court held the lower design life (20 or 25 years) applied for the relevant, corroded, elements.
To “rewind the film” a little, the 2017 Supreme Court judgment of MT Hojgaard held that, where a contract imposed a design life requirement (even if in a technical schedule) a party was required to comply with that, even if this meant going above and beyond its ‘reasonable skill and care’ obligation. The reasoning in that case was explored in Blackpool and the judge went on to further consider the ambit of what a design life obligation constitutes i.e. whether the contract imposed an obligation that the design would produce a depot with a sufficient design life, or whether it was an absolute warranty that the depot itself would last for the requisite time (the former was preferred).
The next question concerned what a breach of a design life requirement actually entails, particularly with regard to maintenance requirements. One of the Defendant’s arguments was that the galvanised coating on steel structures was not envisaged to be “everlasting” but was to be sacrificed during the design life and that, as such, the structure itself could “tolerate this” without major repair (the design life being compromised). In the circumstances of the case, the question of whether the corrosion was within the remit of maintenance or repair varied depending on the particular element. However, there was a further interesting distinction drawn between the ‘normal’ maintenance obligations assumed by the Claimant and the more onerous obligations placed on the Defendant over the depot’s seafront location where it would be exposed to “ocean spray”.
An interesting side point arose with respect to a contribution claim between other Defendants. Here the steelwork subcontractor would have been tied to the design life imposed on the Defendant (potentially 50 years) whereas the architect / lead designer was operating to a 25-year requirement. Whilst not determinative in this instance, the judge provided some helpful comment on the potential effect of such discrepancy on parties with interlinked design responsibilities.
The judge ultimately found for the Claimant, but for a sum significantly lower than that claimed for. This was because of the shorter design life, the failure to demonstrate breach in certain elements and that, in terms of quantum, it was not a case of “everything must go” as the Claimant contended, but one where limited repairs would suffice.
The judgment is a comprehensive consideration of fact sensitive and complex issues. It again goes to reinforce the importance of having a clear understanding of the responsibilities assumed with regard to the design’s construction and its intended life.
Contact
Matthew Raftery, Associate E: mra@bto.co.uk T: 0141 225 4548