| Date | 31 July 2002 |
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| Judgment | Co-operative Insurance Society Limited -v- Henry Boot Scotland Limited, TCC 1 July 2002 |
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| The Issue | Incorporation of ground condition reports into the contract and responsibility for contractor's development of design. |
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| Implication |
Design and build contractors may be held to be responsible for the completed design notwithstanding that parts of the design may have been prepared by the employer's consultants. |
printIn September 1995, the Co-operative Insurance Society (CIS) engaged Henry Boot Scotland to undertake the demolition, design and reconstruction of a property in George Square, Glasgow. The contract incorporated the JCT 1980 Standard Form and included a Contractor's Designed Portion in respect of earthwork support to the sub-basement excavations, piled foundations and contiguous bored piled walls and associated temporary propping. Soon after the commencement of the basement construction works, disaster struck. Water and soil flooded into the sub-basement excavations. CIS brought proceedings against its consulting engineers and against Boot to recover the costs of the flood. A series of preliminary questions were put to His Honour Judge Richard Seymour QC to identify the contractual obligations of the parties. Firstly, Judge Seymour was requested to consider the nature of the design obligations owed by Boot arising out of the Contractor's Designed Portion works which formed part of the contract. Clause 2.1.2 of the contract provided that "the contractor shall, in accordance with the contract drawings and the contract bills . . . complete the design for the Contractor's Designed Portion including the selection of any specifications for any kinds and standards of materials and goods and workmanship to be used in the construction of that portion, so far as not described or stated in the employer's requirements or contractor's proposals". A concept or outline design of the piled walls had been prepared by the consulting engineers engaged by CIS. Boot argued that its only contractual obligation in relation to the design of the piled walls was to prepare working drawings in respect of the concept devised by the consulting engineers. Thus, argued Boot, they should not be liable if that concept was flawed such that it caused or contributed to the flood. CIS argued, in return, that Boot was under a duty to complete the concept design by producing all necessary working drawings and doing calculations and obtaining evidence that the design would work in practice. To achieve this, it was argued, Boot had to check the outline or concept design and ensure that it was suitable and appropriate for the prevailing ground conditions. Moreover, argued CIS, Boot had an express obligation to warn should any aspect of the outline design be unsatisfactory. Judge Seymour agreed with CIS. The obligation of Boot was to complete the design of the contiguous bored pile walls by developing the conceptual design prepared by the consulting engineers into a completed design capable of being constructed. That process of completing the design involved examining the design at the point at which responsibility was taken over, assessing the assumptions upon which it was based and forming an opinion as to whether those assumptions were appropriate. In the event, an obligation to complete a design begun by someone else involved an undertaking that the result will be achieved with reasonable skill and care. Design and build contractors should pay particular attention to this decision. The unmodified terms of the JCT design and build contracts have led many contractors to believe that they are responsible only for the specific design input or development of design provided by them. This decision suggests that, irrespective of the advancement of the design prepared earlier by others, the contractor will be responsible for the sufficiency of the finished design, even where this is not clearly expressed in such terms in the contract. A further point examined by Judge Seymour concerned whether a ground investigation report had been incorporated into the contract. Boot argued it was were entitled to rely on the information provided in this document which, according to Boot, misrepresented the water levels to be expected in the excavations. As with most construction contracts, the contract documents were listed at the outset of the contract. This list did not include reference to the soil investigation report. Boot argued, however, that the report was incorporated into the contract by virtue of it being referred to in a note on one of the drawings. Unsurprisingly, CIS countered that the reference to the ground investigation report upon a drawing was insufficient to incorporate such a report into the contract. The references were purely for information purposes and did not override the provisions of clause 2.2.2.4, whereby Boot was deemed to have satisfied itself as to "the form and nature of the site including the ground and sub-soil". Judge Seymour concluded that it was plain that the ground investigation report was not incorporated into the contract. It was not in the list of identified contract documents. The reference to the report upon drawings was simply included to identify for the contractor a source of potentially relevant information about ground conditions. The effect of clause 2.2.2.4 was to place upon Boot the risk that ground conditions at the site might prove to be something other than anticipated. That provision was not an exclusion clause, it was simply a clause by which contractual risk in relation to ground conditions, amongst other things, was allocated as between CIS and Boot. Once again, Contractors beware. JCT contracts do not generally give them a remedy for unexpected ground conditions.
CJ-0229
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