Issues involved with claims for defects
What can you do if you become aware of technical difficulties with your building or construction project? This article considers some of the issues involved with claims for defects.
The first step is to establish that the works are defective, either because they are not in line with the contractual requirements or with some other duty or obligation.
What does the contract say?
The relevant contractual documentation should be reviewed to identify what obligations were owed and by whom. For example, in respect of a building contract and professional appointments:
- Usually there is a duty to comply with any relevant legislation (which would include the Building Regulations).
- Who had the responsibility for the design and what was the required standard of care?
- Do the documents contain deleterious material clauses?
- Are there additional requirements over and above compliance with legislation, such as compliance with good practice and manufacturers' guidelines?
Have those obligations been breached?
Once the relevant obligations have been established, the next step is to ascertain whether the building, as designed and/or constructed, is not in line with those contractual obligations.
This would usually require expert evidence. If you want to maintain privilege over the appointment of and/or any report from an expert witness (so that it would not need to be disclosed in any future proceedings) then you should ensure that the expert witness is instructed by external solicitors.
Other potential claims?
Section 1 of the Defective Premises Act 1972 could provide another avenue for a possible claim, especially if you do not have the benefit of recourse pursuant to a contract.
To bring a claim under section 1 you would have to evidence (again usually through expert witness evidence) that firstly, there are defective works, defective design or inadequate materials and secondly, that those issues have rendered a dwelling unfit for habitation.
You are unlikely to be able to claim against local authority building control, as there would be no contract and the courts have confirmed that there would be no duty in negligence, unless physical injury or damage to other property occurred. If building control was carried out by an 'approved inspector', as they will have been appointed pursuant to a contract, there may be a contractual claim, depending on their obligations.
What is the current stage of the works?
If the works are on-going or are still within in the defects rectification period of a building contract, you should:
- Ensure that you comply with any requirements in respect of notifying defective works to other parties; and
- check whether you are contractually obliged to give the contractor the opportunity to rectify the works (if the defect is in their works or design).
If works have completed, then you should check for any express limitation period for bringing a claim. If there is no express provision, then you should also consider the statutory time limits.
If the defect is design-related you should ask the contractor/professional to notify their professional indemnity insurers.
What damages are recoverable?
Subject to any limits or caps on liability, for claims in respect of defective works under a building contract or professional appointment, usually the main head of loss is the reasonable cost of remedial works. This is subject to the:
- Cost of those works being proportionate to the breach
- Duty to mitigate your loss (which would mean if the claim was against a contractor, giving an opportunity to carry out the remedial works at its own cost)
- Additional cost of repairing to any higher specification not usually being recoverable
Issues to consider when remedying the defects
The following points should be borne in mind if you carry out remedial works:
- Ideally you would want to establish liability in respect of any defects before doing so. However, in practice, you may not be able to do so due to time restraints;
- If liability for any defects has not yet been established (prior to remedial works), you should be mindful not to say or do anything that could waive any claim you may have against relevant third parties;
- You will need to retain evidence of the defective works
- The limits of the likely recoverable costs
- Technical experts should advise on the scope of the remedial works
- If your organisation is a "contracting authority" for the purposes of the Public Contracts Regulations 2015, you will need to consider your procurement obligations
This article is taken from Building Interest – Autumn 2017.