Frequently Asked Questions

We are a contractor looking at an NEC4 Engineering and Construction Contract (ECC) tender. We will need to install some temporary works and the client and its designer agree that our proposed method is the only way to do the works safely. We are, however, concerned that by using this method, damage may be caused to adjoining properties that are not owned by the client. Clause 81.1 states one of the contractor’s liabilities is, ‘Claims and proceedings from Others and compensation and costs payable to Others which arise from or in connection with the Contractor Providing the Works’. This would indicate that even if we did the works correctly in accordance with the scope, and we were not negligent in any way, then we would still be liable for damage to others’ property. However, under clause 80.1, one of the client’s liabilities is, ‘Claims and proceedings from Others…which are due to…use or occupation of the Site by the works or for the purpose of the works which is the unavoidable result of the works’. If the properties we are concerned about are within the boundaries of the site and damage occurs that is as a result of the works, would this be a client’s liability?

If clause 81.1 applies, it refers to claims from others, therefore this will probably not involve a contractual claim with the client. However, those others will still need to have a basis for a legal claim. You will need to get a legal view on whether and in what circumstances those others may have a basis for a claim against you. However, if 80.1 applies, clause 81.1 will become irrelevant because of its first line. Clause 80.1 it refers to any damage being the ‘unavoidable result’ of the works, so it is damage that is unavoidable and not the risk of the damage. Just because you unavoidably have to do some temporary works, that does not necessarily make any resultant damage to other people’s property unavoidable. As an example of this, if you are required to put a pipeline in an open trench across a farmer’s field, damage to crops will be an unavoidable result of the works. On the other hand, if you are building a new office block on a tight space and you had to crane objects over a neighbour’s building, the risk of damage from a falling object may or may not be an unavoidable result of the works. Therefore, the answer is very fact sensitive, and you will need legal advice to be sure. You clearly think damage could occur because of the temporary works, so you need to take all additional measures you can to avoid that damage happening. If that is impossible, you may be able to show that damage was unavoidable, or you may not. You should get some advice on what damage may occur, and also some legal advice as to whether or not you would be liable for it. You say properties are within in the site, which will make it difficult for the client to provide access to that part of the site. In the crop damage example, the client will have been able to use its powers to get a wayleave from the farmer, and the terms of that wayleave will cover responsibilities. The same would apply if the client had a statutory right to access. Therefore you also need to find out from your client how they are going to get access for you to these properties and on what terms. If there is a risk you ultimately do not want to take, the only option you have is to insist the client adds this as a client’s liability or an additional compensation event in the relevant entry in the contract data. Of course, the wording of that will need to be carefully drafted. Finally, if the buildings are owned by the client, you may still be liable, see the penultimate bullet of 80.1. However, the wording does not use the test of unavoidability, so you may need to take legal advice as to the difference that may make as well.
 

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