Lead Consultants - Liable For What?
The limits of a lead consultant’s liability for a project were highlighted in a new Scottish appeal court decision when they were not held to be responsible for whole design of the development.
A development of 64 social homes in Midlothian became uninhabitable as a result of ingress of carbon dioxide from disused mine workings. The Council sued, for £12 million:
- the Architect appointed by the Council as lead consultant under a Framework Agreement;
- the Ground Investigation Contractor appointed by the Council to carry out ground investigations and to produce a report; and
- the Environmental Consultant, appointed by the Council to “peer review” the Ground Investigation Contractor’s reports.
The Council sued the Ground Investigation Contractor for failing to make the recommendation in their reports to install a ground gas defence system and sued the Environmental Consultant for failing in their duties as “peer reviewer” of the Ground Investigation Contractor’s reports. They also sued the Architect because, according to the Council’s interpretation of their appointment with them, the Architect had assumed responsibility for the ground investigations carried out by the Ground Investigation Contractor and the peer review conducted by the Environmental Consultant. The words used in the appointment were carefully analysed, in particular the Architect’s agreement that they would be “...wholly responsible for the Site Investigation Works and surveys…”.
The Court disagreed with the Council.
The Court said that the imposition of liability on the Architect for a breach of contract by any of the other consultants or contractors, regardless of their contractual relationship with the Architect would be a “striking departure from ordinary legal principle”.
Why is this important?
Whilst the Court’s decision is not a surprise, developers should take care.
If a developer wishes a ‘one stop shop’ for design responsibility at consultant level then a multi-disciplinary appointment should be considered. This is favoured by a number of local authorities and quasi-public sector bodies, such as housing associations. In such a scenario, the developer appoints one consultant who thereafter either carries out all of the consultant roles directly or carries out some of the roles directly and sub-contracts others.
In contrast, the Architect in this project was appointed as ‘Lead Consultant’. They were responsible for the overall progress of the ‘build’ and whilst they carried the full responsibility for the ‘whole design’ of it, that obligation was only intended to embody the Architect’s usual responsibilities for overall co-ordination of the design works. It was not to be construed as an acceptance of liability for anything that might ultimately go wrong with the design, no matter what its cause. It did not make the Architect responsible for the other consultants appointed by the Council. That is a commonly accepted position for lead consultants; clear and unambiguous words are required to alter this position.
This is an important distinction and one to be considered carefully by developers when procuring works and considering the extent of their design consultant’s liability.
If you want to discuss this further, please contact Kathleen McAnea, Director, Construction & Projects
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