Lorna Carter

+44 (0)1223 785299 lecarter@greenwoodsgrm.co.uk

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Contract Administrators beware!

Construction / 14 May 2019

In a recent Technology and Construction Court decision*, Pepperall J has dismissed a tenant’s claim against a design and build contractor.  The tenant’s claim related to defects which arose during the rectification (defects liability) period.  Despite there being a breach of the design & build (D&B) contract, the contractor was held not liable for the tenant’s losses on the basis that a Notice of Completion of Making Good Defects had been issued on the D&B contract.  The Court held that this Notice was conclusive evidence that the defects had been remedied and resulted in the tenant’s claim failing.

The reason for the title of this update is because generally the job of issuing certificates such as the Notice of Completion of Making Good Defects falls to an employer’s agent (EA) on behalf of the employer in a D&B contract and to the contract administrator/architect in a construction only contract.  If the Notice/certificate is wrong and prevents a genuine claim, then the dissatisfied employer is likely to come knocking at the door of the contract administrator alleging that they have not carried out their duties with reasonable skill and care.  Whether a claim can be made, and if so to what extent, will depend on the terms of the appointment (or collateral warranty) between the contract administrator and the client.  But caution is key before issuing such Notices or certificates.

Another point of note in this case is that in the employer’s amendments to the standard form D&B contract, the duty of identifying and listing defects arising during the rectification period fell to the contractor rather than the employer or the employer’s agent and this led to a loss of control of an important part of this contract.  So contract amenders also beware!

* Swansea Stadium Management Company Ltd v City & County of Swansea and another [2019] EWHC 989 (TCC) (17 April 2019)

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