International Construction Law Review
UNDERSTANDING AND MANAGING DESIGN RISK UNDER COMMON LAW JURISDICTIONS “MANAGING LEGAL RISK TO MINIMISE DISPUTES”
Jeremy Glover
Partner, Fenwick Elliott LLP, jglover@fenwickelliott.com
ABSTRACT
This article aims to provide guidance on the management of legal risk when it comes to considering common law design obligations. Under the common law, there are two essential design obligations: the use of reasonable skill and care and an obligation as to fitness for purpose. This article considers the meaning of these essential obligations with reference to statutory and case laws. Further, a number of frequent drafting problems are illustrated by analysis of MW High Tech Projects UK Ltd v Haase Environmental Consulting GmbH [2015] EWHC 152 (TCC) and MT Højgaard a/s v E.On Climate and Renewables UK Robin Rigg East Ltd and Another [2017] UKSC 59.1
INTRODUCTION
The focus of this ICLA conference is managing legal risk to minimise disputes. Of course, contracts by their very nature are intended to allocate and manage the balance of risk, responsibility and reward. Addressing who carries what risk, when and where is an essential consideration in choosing contract strategies. This is particularly the case when it comes to design. Here, the key to managing design risk is understanding the nature of the obligations a party is being asked to enter into in light of the often complex and even contradictory tender and contract documentation.
In 1997, Mohan M Kumurawamy listed the top 10 common causes of construction claims “as perceived by contractors, clients and consultants”:2
- • Inaccurate design information;
- • Inadequate design information;
- • Inadequate site investigation;
- • Slow client response/decisions;
- • Poor communications;
1 The ICLA conference took place in January 2017, before the Supreme Court decision was released. The paper given at the conference has been revised to reflect the judgment of Lord Neuberger.
2 Mohan M Kumurawamy, “Common Categories and Causes of Construction Claims” [1997] CLJ Vol 13/21.
Pt 1] Understanding and Managing Design Risk
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