“Contractor’s Duty to Warn Restated”

When looking for commercial clarity, conflicting legal authorities are the last thing you need. Whether a Contractor has a duty to warn a client of design defects when it is not contractually responsible for designing the works in question has been one such area of difficulty for many years. Not before time, the Court of Appeal has now given further guidance on some of the issues which have been raised.

None of the standard forms of construction or civil engineering contract offer any clear help on this issue. The debate has therefore centred on whether:

• contractors owe a duty of care to warn of design defects; and/or
• a duty to warn should be implied into construction contracts.

Over the years opinions have differed. The late Judge John Newey QC held, on at least two occasions in the mid-1980s, that a contractor did owe a contractual duty to warn a client (or its agent) of defects in the design of works. However, considerable doubt was subsequently cast by the decision of Judge Peter Bowsher QC in University of Glasgow -v- W Whitfield and Others (1988). On the facts of that case, the Judge held that there was neither an implied contractual duty to warn of design defects, nor a duty of care in the circumstances which had arisen.

Judge Newey was not put off. In Lindenberg -v- Joe Canning and Others (1992) his views were restated, albeit on the basis that by failing to raise its concerns and by proceeding with the work in question the contractor was in breach of an implied term that it would exercise the standard of care to be expected of an ordinary, competent building contractor.

The Court of Appeal has now reconsidered these authorities and clarified the current position in the recent case of Plant Construction plc -v- Clive Adams Associates and Another (20th December 1999). The factual background is complex and somewhat unusual. Plant had been retained by Ford to install two engine mounts in a research and development centre at Laidon in Essex. Plant sub-contracted the substructure works to JMH Construction, and these included the provision of temporary works for the underpinning of a roof. During the course of the works the temporary propping installed by JMH failed and the roof collapsed. Fortunately, no-one was hurt.

At first instance Judge John Hicks QC held that, in the absence of any provision to the contrary, a contractor is responsible to his client for the design of any temporary works which are necessary. However, on the peculiar facts of this case the Judge also held that there had been a variation of the Sub-Contract such that JMH was contractually bound to comply with any instructions given by a representative of Ford.

It transpired that the design of the temporary works which Ford’s representative instructed was inadequate, and negligently so. Since JMH had been instructed to adopt this design by Ford the Judge held that it was not contractually responsible for the design of it.

However, Judge Hicks also found that, on the basis of the decision in Lindenberg, JMH had a duty to use due care and skill in carrying out its works and to advise (or warn) Plant as to the adequacy of the temporary design. JMH had, on various occasions, raised its doubts with Plant, but in the Judge’s view it had still failed to discharge its responsibility. Whilst Plant (and its consulting engineer) bore the bulk of responsibility, the Judge held that JMH was liable for 20% of the recoverable damages.

JMH appealed, contending there was, in law, no duty to warn of a design defect for which another party was responsible or, alternatively, that it had discharged that duty by its conduct. The Court of Appeal noted that the earlier decisions were “not entirely unanimous”. Nevertheless, it concluded that:-

• there will usually be an implied contractual term that a contractor shall perform a contract using the skill and care of an ordinarily competent contractor;
• the particular circumstances of a contract will determine the scope of that obligation; and
• where an experienced contractor is involved, and the design of the works is not only defective but obviously dangerous, there is an “overwhelming case” that the contractor is bound, as part of its obligation to use appropriate skill and care, to warn a client of dangers it perceives.

The Court of Appeal’s decision is grounded in the somewhat unusual facts of the case. It also expressly reserved “for future consideration” circumstances where a contractor is not aware of a dangerous design defect or, alternatively, circumstances where the design defect is not dangerous. Nevertheless, it would now seem certain that contractors are best advised to warn clients of design defects of which they are aware, and to ensure that any warning is loud and clear.

For further information on this topic, please contact Andrew Rawstron at [email protected] or on +44 171 367 2519.

Key Points

• Contractors are obliged to warn clients of potentially dangerous design defects, even where they are not responsible for the design itself.
• An obligation to warn may extend to defects which are not dangerous but of which the contractor should have been aware.
• Warnings should be clear, and always in writing.