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Part 1
38 TheStructuralEngineer
January 2015
Managing risk and contractual
liability. Part 1: Design defects
In the first of a new
series from insurance
broker Griffiths &
Armour examining
contractual risks and
liability claims, we look
at design defects and
ways to avoid them.
Although the idea is anathema for most
engineers, the most basic cause of claims
against them is a perceived defect in
the services they have provided. Most
engineers have procedures in place
which are sufficiently robust to catch
the majority of errors. It is when these
procedures are not properly followed that
problems arise.
Three situations stand out for special
attention:
• ‘free’ advice
• the inferior alternative design
• design-and-build contracts
‘Free’ advice
For everyone who offers ‘free’ advice
there is another person prepared to
rely on it. In our personal lives this will
seldom give rise to litigation. But in the
construction world, whenever engineers
offer advice which turns out to be wrong
they can expect to be sued.
Case studies 1 and 2 highlight how easy
it can be for construction professionals to
get into difficulties when they try to help
their clients.
The perils of free advice are clear. If you
are offering a view as an engineer then do
remember what it is that you are giving –
an expert opinion. While it can be difficult
to subject oral advice to the same rigours
of quality assurance as your written
advice, the consequences of failing to do
so can be significant.
TSE37_38-39 Health & Safety v2.indd 38
Professional guidance
Contractual liability
Case study 1
A consultant was instructed to undertake
structural designs and calculations for
an extension to a residential property. A
scheme was delivered to the client who
gave no indication that he was not satisfied
with it.
A contractor was then appointed
who sought advice from the engineer
as to how the scheme could be ‘better’
implemented. In particular he wanted to
explore whether it would be possible to
splice the rear and side beams which were
to support the extension at first-floor level.
The consultant agreed that this would be
possible in principle, but explained that he
was too busy to provide the splicing detail
which would be required – the contractor
would have to approach either the steel
manufacturer or another consultant for
that detail.
Under some pressure from the
contractor he then mentioned over the
telephone that on previous schemes
he had specified a certain type of plate
incorporating high-strength friction grip
bolts – but he reiterated that the contractor
should seek definitive advice on this.
Subsequently, the contractor obtained a
detailed design from the steel fabricators,
proposing that the rear beam be joined
using welded end plates and that the side
beam be spliced with plates bolted across
the side, top and underside. No mention
was made of the high-strength friction
bolts. The consultant was faxed a copy
of these drawings and was again pressed
for his approval. Again, he confirmed that
the rear beam design was acceptable
‘in principle’. He advised against splicing
the side beam on the basis that welded
plates should ideally be used instead, but
he commented that the number of bolts
looked about right. Again, he stressed that
calculations should be obtained.
The beams were installed with no
further amendment to the design. As soon
as the temporary supports were removed
the beams sagged, causing damage to
the first and second floors and also to the
neighbouring property.
Expert evidence criticised the
consultant’s approval of using welded end
plates for joining a loadbearing beam, even
only on an ‘in principle’ basis.
While calculations would have revealed
the problems with the design, it was
shown that the detail was so inadequate
that it should have been obvious to any
reasonably competent engineer, even
without calculations, that it would fail. The
use of ‘in principle’ language was therefore
irrelevant.
In relation to the side beam, our expert
advised that a reasonably competent
engineer would have specified either that
high-strength bolts be used or that the
plates be welded. The fabricator’s design
indicated neither of these measures. While
the consultant recalled having advised
against the proposed design for the side
beam the contractor unsurprisingly had
no recollection of his oral disclaimer of
responsibility.
In the circumstances, settlement was
agreed in equal shares with the contractor.
Lesson
Don’t rely on providing further advice
on an ‘in principle’ basis. Even with this
disclaimer, liability can still attach in
certain circumstances.
Case study 2
An engineer was engaged by a contractor
to provide outline scheme drawings and an
estimate of materials likely to be required
on a certain design-and-build project.
No fees were payable to the engineer up
to bid stage and there was no certainty
that the contractor would be successful.
For that reason the engineer decided to
exempt the work from his internal quality
management procedures.
The contractor’s bid was successful and
the engineer was subsequently appointed
for detailed design duties. It then became
apparent that the quantities of materials
previously estimated by the engineer did
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not adequately reflect the complexity
of the scheme design. The contractor
incurred unexpected costs which he
sought to recover from the consultant.
The contractor’s case was that the
consultant had prepared the design and
materials schedules for the purpose of the
contractor’s bid and that the contractor
had been entitled to rely upon them for
that specific purpose. The consultant
had to accept that he had failed to
exercise reasonable skill and care and
consequently was forced to settle the
claim on the best available terms.
Lesson
Liability attaches wherever an engineer
fails to exercise the required standard
of care. That standard is no lower where
a lesser fee has been agreed or where
work has been undertaken in good faith
but effectively free of charge.
The inferior alternative design
By and large, highly trained staff and an
appropriate checking regime identify
potential design defects long before
they are released into the client’s hands.
Problems are likely to arise when these
systems are circumvented or not followed
with due attention. But this is not usually
a case of carelessness or deliberate
avoidance – it frequently occurs via the
back door when an engineer is asked to
consider an alternative design solution
which has originated from outside their own
practice.
The alternative can come along in any
shape or size and seemingly innocuous
changes to a carefully engineered design
can lead to disaster.
Case study 3 highlights the problems
faced by the ever-helpful consultant
agreeing to adopt an alternative design
proposed by a third party.
Case study 3
A consultant gave advice on the design
of a drainage system for an extension
to a property. Mindful of the difficult
ground conditions prevalent in the area
he specified a mound drainage system.
The architect regarded this as too costly
a solution and suggested instead that
a soakaway scheme be explored. This
had previously been discounted by
the consultant because of the ground
conditions. However, under pressure,
TSE37_38-39 Health & Safety v2.indd 39
he carried out a percolation test. To his
surprise, the test was successful and
he was persuaded to proceed with a
soakaway scheme.
Once installed, the soakaway failed to
discharge drainage water. The test result
had been an anomaly and the mound
system had to be re-adopted at a cost
to which the consultant was forced to
contribute.
It would have been advisable for the
consultant to trust his own experience and
resist the proposed alternative until the
anomalous percolation results had been
ratified by further study.
Lesson
Changing your advice under pressure
from others nearly always saddles you
with additional risks. Design changes
are often price driven – where a saving
is made the engineer rarely takes any
credit, but if the alternative design
fails then he will always be the easiest
defendant to pursue.
Design-and-build contracts
Design-and-build procurement increases
by its very nature the likelihood of an
alternative design proposal arising. Under
a fixed-sum contract and with no wriggle
room on price, contractors will nearly
always look for cost-saving opportunities
with the engineer’s opinion being treated
like a rubber stamp, at least until something
goes wrong. As Case study 4 illustrates,
engineers who agree to alternatives often
lose control of the process from that
point onwards, despite being saddled with
ownership of the risk.
Case study 4
A structural engineer was retained in
relation to a new multi-storey steel frame
scheme. The tender design specified
a system consisting of lightweight
proprietary decking sitting on the flanges
of steel beams. The use of this product
anticipated the bottom flanges on the
beams being wider than usual, either by
using specially designed beams or by
taking conventional beams and welding a
wider flange to the underside.
However, in order to economise on
steel quantities, the contractor proposed
at tender stage to use unmodified
conventionally flanged beams. The
engineer agreed to this alternative.
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39
Subsequently, at the construction stage,
the decking sub-contractor complained
that fitting the decking onto conventionally
flanged beams was more difficult than
it would have been had the proprietary
decking manufacturer’s beams been
specified. They claimed against the main
contractor for additional costs and later
declared that the design was unbuildable.
Eventually use of the proprietary decking
was abandoned altogether in favour of
pre-cast concrete decks.
The engineer had no defence to the
significant delay claim which followed.
He had failed to take into account the
implications of the contractor’s proposed
design changes and to seek the advice of
the proprietary manufacturer. He should
have stuck to the original design concept.
The matter settled for a sum in excess of
£900 000.
Lesson
Even an apparently minor amendment to
a carefully considered design can give
rise to significant delay. This case clearly
illustrates one of the essential risks of
design-and-build schemes.
Conclusion
Irrespective of the factual scenarios,
avoidance of quality controls frequently
leads to problems. As the case studies
show, whether it is the last-minute change
to the established design or the pressures
of working to tight programmes under a
design-and-build contract, the risks are not
difficult to spot.
Just as crucial as implementing quality-
checking systems is ensuring that those
systems cannot be circumvented. Where
properly used, those systems operate to
protect balance sheets and reputations, and
for this reason they need to be embedded
into the culture of the organisation.
This series has been adapted from
Reinforcing the Simple Messages and
Contractual Liability Claims: Lessons to be
Learned, published by Griffiths & Armour.
Griffiths & Armour is a leading
independent and privately owned UK
insurance broker and risk management
adviser. For further information, visit
www.griffithsandarmour.com
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Griffiths & Armour
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Authority.
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