SCSI Western Region CPD

Transcription

1 SCSI Western Region CPD Unlimited liability in GCCC Conditions of Engagement, 8 November Finola McCarthy, Partner C O R K D U B L I N G A L W A Y L O N D O N W W W. R D J. I E 1

2 SCOPE OF LIABILITY Types Tort/negligence Common law duty of care Legislation Eg Building Regulations, Safety Health and Welfare at Work Act 2005 Contract Conditions of Engagement (COE) C O R K D U B L I N G A L W A Y L O N D O N W W W. R D J. I E 2

3 SCOPE OF LIABILITY (contd) Tort Breach of duty of care Professional negligence Damages Legislation Criminal sanction and/or breach of statutory duty Contract Depends on the contract terms Extent of damages C O R K D U B L I N G A L W A Y L O N D O N W W W. R D J. I E 3

4 CONTRACT COE Essentials for a contract: Offer Acceptance Consideration Intention to create legal relations Certainty of terms When is the contract made? Who are the parties? C O R K D U B L I N G A L W A Y L O N D O N W W W. R D J. I E 4

5 CONTRACT Can be either signed or sealed by the Consultant Duration of liability - six years, twelve years Scope of the services, likelihood of defects emerging in the future? Default setting six years twelve only sought where absolutely necessary Cl. 5.2 GN 1.6 C O R K D U B L I N G A L W A Y L O N D O N W W W. R D J. I E 5

6 CONTRACT Implications of contract formation Unintentional contract (through correspondence) Possibility that benefits not obtained because: Contract not executed at all or properly Correct documents not included Post-tender clarification minutes and letters included but not drafted sufficiently clearly C O R K D U B L I N G A L W A Y L O N D O N W W W. R D J. I E 6

7 COE CLAUSES Clause 1 - Appointment Contract 4. The Contract is the entire agreement of the parties about the appointment, and consists of 5. this Agreement; 6. Schedules A and B; 7. any contents of other documents identified in Schedule A. C O R K D U B L I N G A L W A Y L O N D O N W W W. R D J. I E 7

8 PERFORMANCE Clause 2: Services 1. The Consultant shall perform the Services identified in Schedule B, elsewhere in the Contract, 2. at its [his/her] own expense [except where the Contract states otherwise], 3. with the skill, care, diligence, efficiency and professional conduct reasonably to be expected from a consultant with the qualifications and experience suitable for the Services. Extent of Liability 15. The Consultant acknowledges that any breach by it of the Contract may cause financial losses to the Client not only directly but by liability to contractors, suppliers, other consultants, involved in the Project 16. [so that consequently such losses may be included in compensation for which it is liable to the Client]. C O R K D U B L I N G A L W A Y L O N D O N W W W. R D J. I E 8

9 LIABILITY FOR OTHERS Joint and Several Liability 17. If more than one [human, legal] person is identified as the Consultant, they are jointly and severally liable to the Client. Concurrent wrongdoers - Civil Liability Act, 1961 Section 11 : "Two or more persons are concurrent wrongdoers when both or all wrongdoers and are responsible to a third person [the plaintiff] for the same damage, whether or not judgment has been recovered against some or all of them." Section 12(1) : Subject to the provisions of sections 14, 38 and 46, concurrent wrongdoers are each liable for the whole of the damage in respect of which they are concurrent wrongdoers." C O R K D U B L I N G A L W A Y L O N D O N W W W. R D J. I E 9

10 LIABILITY FOR OTHERS Concurrent wrongdoers Lynch v Beale [unreported, Hamilton J., High Court, November ] Hotel collapsed Structural defects caused by: subsidence of the foundations in a corner of the building and inadequate design in the first floor of the building. Sued architect, main contractor and nominated subcontractor for negligence and/or breach of contract. Nominated subcontractor and architect argued they were not concurrent wrong doers because there were two separate and distinct causes for the structural defects, and therefore liability should be limited to the actual loss resulting from the particular wrong committed by each Defendant. C O R K D U B L I N G A L W A Y L O N D O N W W W. R D J. I E 10

11 LIABILITY FOR OTHERS Hamilton J: The damage claimed in this case against all the Defendants is the same damage, viz: the loss sustained by him as a result of the internal collapse of the hotel and the subsidence thereof and the Court is satisfied that the Defendants herein are "concurrent wrongdoers" as defined in the Civil Liability Act 1961." C O R K D U B L I N G A L W A Y L O N D O N W W W. R D J. I E 11

12 LIMITING/EXCLUDING LIABILITY Liability can arise in both tort and contract Tort possibility of longer duration of liability Claimant reserves common law rights The terms of any relevant contract between the parties or authorised by a party will be relevant to the existence, scope and extent of a duty of care. Biffa Waste Services Ltd v Maschinenfabrik Ernst Hese GmbH [2008] EWHC 6 (TCC) practical factors that limit liability Proof of loss, breach, duty, causation, mitigation claimant should take steps to mitigate loss no assets.. contractual clauses but won t apply to third parties C O R K D U B L I N G A L W A Y L O N D O N W W W. R D J. I E 12

13 LIMITING/EXCLUDING LIABILITY Net contribution clause Consultant should only be liable for the consequence of its own breach of duty and not for the breaches of duty by other contractors and consultants. only has to pay that proportion of damages for which it is responsible, aims to defeat joint and several liability, found to be valid in a non-consumer context in other jurisdictions eg Scotland Langstane Housing Association Limited v Riverside Construction (Aberdeen) Ltd. [2009] COSH 52 during building works, the floors of the property suffered a partial collapse Langstane claimed for breach of contract and negligence against the architect, the engineer and the contractor jointly and severally, or severally. engineer successfully relied upon its net contribution clause to restrict liability to damage arising from the consequence of its own breach of duty (not for the breaches of duty of the architect or contractor) C O R K D U B L I N G A L W A Y L O N D O N W W W. R D J. I E 13

14 LIMITING/EXCLUDING LIABILITY Cap on liability Limits liability by reference to a monetary amount an insurance clause is not a cap on liability James Moores v Yakeley Associates Limited (1998) CILL 1446 architect had inserted a liability cap of 250,000 into the contract. client argued that this was unreasonable and ineffective under the (UK) Unfair Contract Terms Act. Judge upheld the limit considered the value of the job - in the region of 250,000, the architect's fee, the bargaining position of the parties and the client's opportunity to negotiate the amount of the cap C O R K D U B L I N G A L W A Y L O N D O N W W W. R D J. I E 14

15 LIMITING/EXCLUDING LIABILITY Margaret Brennan v Thomas & Catherine Flannery, T&C Developments Limited, The National House Building Guarantee Company Limited ( HomeBond ) Court of Appeal 23 February 2015 House in Co. Roscommon Structural and drainage defects Terms and Conditions of the HomeBond Agreement limited liability to 38,000. High Court awarded over 50, Court of Appeal reduced award to 38,000 C O R K D U B L I N G A L W A Y L O N D O N W W W. R D J. I E 15

16 LIMITING/EXCLUDING LIABILITY Restrict types of loss recoverable indirect or consequential loss Preferable to list the types of loss: eg loss of profits, loss of business, loss of contracts, data loss etc Duration of Liability Restriction on time within which claims can be made: Eg From a date such as practical completion C O R K D U B L I N G A L W A Y L O N D O N W W W. R D J. I E 16

17 LIMITING/EXCLUDING LIABILITY Brandley and WJB Developments Limited v Hubert Deane T/A Hubert Deane & Associates and John Lohan T/A John Lohan Ground Works Contractors (High Court 2010/10994P and Appeal 2015/245) Two houses in Co Galway first defendant: project engineer who issued Certificates of Compliance. second defendant: ground works contractor which included the foundations of the houses summary of the key dates: March 2004 September 2004 December 2005 November 2010 The foundations of the houses were completed The engineer issued certificates of compliance The plaintiffs noticed cracks in the houses The plaintiffs issued proceedings against the engineer and the contractor - C O R K D U B L I N G A L W A Y L O N D O N W W W. R D J. I E 17

18 DURATION OF LIABILITY CONTD Plaintiffs case was although the negligent installation of the foundations and the negligent certification were outside the six year time limit, the damage that came about as a result was within that period. High Court dismissed the claim as being statute barred, on the basis that the cause of action accrued on the date the foundations were laid The Court of Appeal overturned the High Court decision. It held that damage is an essential element of any negligence/tort case as negligence without damage is not actionable. The plaintiffs did not suffer damage at the time when the defective foundations were installed here were merely defective foundations but that is not damage of a kind that is actionable in tort. The evidence was that while the foundations of these houses were defective, they did not cause damage until December The evidence was that the damage resulting from the defective foundations did not occur until December 2005 (not that it was discoverable later) C O R K D U B L I N G A L W A Y L O N D O N W W W. R D J. I E 18

19 DURATION OF LIABILITY Court of Appeal found that the fact that the foundations were defective was not a cause of action in tort, and so the Statute of Limitations could not start to run until damage had actually occurred. Re-affirms that a cause of action in damages, (for non-personal-injury claims), accrues only at the time that damage occurs, and creates a distinction between defective work, such as the installation of defective foundations, and actual damage, which is when the defective foundations cause damage to the building. Creates the possibility that there may, in specific circumstances, be a liability for defective work more than six years after the defective work was carried out. On appeal to Supreme Court C O R K D U B L I N G A L W A Y L O N D O N W W W. R D J. I E 19

20 W W W. R D J. I E