Arbicon ADR Ltd
RICS

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Help with Contract Management Failure

It is not uncommon for consultants such as Architects, Engineers and Project Managers to be blamed for losses due to defective design or poor supervision. Common issues are late issue of design information or they simply get it wrong causing delay or loss in the delivery of the building.

Where a consultant takes design responsibility, which proves to be defective there is a high duty of care in law to have got it right than the "ordinary competent builder" who built the work to the designer's wishes. The builder is not clear of blame, he must point out any concerns prior to construction to negate his liability. There are also factors to take account of where the Client insists on a particular product or design and concerns are pointed out to him.

ARBICON have dealt with professional negligence claims where the Contract Administrator negligently did the following:

  • Procured an insolvent Contractor without providing any credit checks.
  • Procured a JCT Design and Build Contract without any consideration for amendments.
  • Failed to manage and ensure the Contractor procured the working design.
  • Failed to ensure the Contractor took out Professional Indemnity Insurance.
  • Failed to supervise the quality of the works leading to non-compliant work and failing to ensure tests were carried out.
  • Failing to properly value the works.
  • Having discovered the non-compliant works, continuing and incorrectly advising the Client and allowing significant overpayment to be made in respect of the non-compliant work.
  • Failing to issue a Non-Completion Notice.
  • Failing to procure adequate Liquidated Damages.
  • Failing to impose Liquidated Damages.
  • Failing to understand the Design Responsibility requirements of the Contractor.
  • Advising the Client they were liable to pay for an Expert Report when this was a cost in the cause.

Disaster!? But for the Contract Administrator, the Client suffered losses on many points, it does not thus pay to employ a Contract Administrator with little experience of contract procurement and dispute resolution. Adequate expertise may not be apparent at the outset and the incompetence will only emerge often sadly after it is too late!

If funds cannot be recovered from the builder or he cannot rectify the problems, others are employed, Liquidated and Ascertained Damages (LAD's) become due and legal and claim costs are incurred. Consultants carry Professional Indemnity Insurance which is normally compulsory where they are members of a Professional Institution (such as RICS, RIBA etc). If insurance is held that is the claim route.

ARBICON are able to assist by preparing professional negligence claims as appropriate against consultants and take you through the ADR or Adjudication process with it.