UK: Certifiers’ High Wire Balancing Act

Last Updated: 9 January 2006
Article by David Arnott

It was an architect who was at the centre of the House of Lords case that, over 30 years ago, laid down the fine line that must be walked by anyone who certifies building work.

In the words of one of the judges, Lord Reid, the certifier "must act independently and [is] in quite a different position from one acting as an agent or employee. At an earlier stage an architect’s primary duty is to the employer but, being a professional man, he must act fairly towards the contractor. If one employed two different people, one to supervise and the other to certify, it would be at once apparent that the latter would be in the position of a true arbitrator."

Since then, the reality has been that the certifier will often have to balance the two roles. Indeed, among certain matters the employer and the contractor are deemed to be aware of when entering into a building contract is the fact that the certifier is paid by the employer, must heed the employer’s instructions and interests when acting as a member of the professional team, and is liable to the employer for breach of contract.

However, while subsequent case law has established that the certifier does not have to attain the level of impartiality that is required of, say, a judge or arbitrator in complying with natural justice, he or she must still act fairly, honestly and independently. Any failure to do so could result in the same situation as that of the engineer in Nash Dredging (UK) Limited v. Kestrel Marine Limited, where his final certificate was found to be tainted by the instructions and pressure placed on him by the employer.

This sort of pressure and potentially compromising behaviour is not uncommon, even though it is in no party’s interest. Both employer and contractor can expect to suffer if the certifier’s position is compromised – all the certificates issued from the point where he or she is believed to have lost independence will be invalid, opening the door to potentially long disputes. However, it is the certifier who may bear the brunt in terms of being disqualified and other consequences for his or her actions.

Of course, he or she runs a real risk of being liable in damages to the employer for breach of contract. The certifier could also be found liable to the contractor where he or she has conspired or otherwise helped the employer to breach its contract with that party.

This can be the case even when the certifier has no contract with that party. In a Scottish case last year, McLaughlan v. Edwards, the pursuers had a contract with a developer to buy a piece of land on which it was also to build a house. The developer hired an architect to design the house and to certify the work. The pursuers were to pay the developer following the issue of such certificates.

After the house was finished various defects came to light. The pursuers obtained a decree against the developer for £145,000. However, no payment could be obtained from the developer so they sued the architect. The Sheriff Principal determined that it was clear that the pursuers were relying on the architect to exercise reasonable skill and care in designing the house. In addition, it was clear that the architect’s certificates would be shown to the pursuers prior to them paying the developer, so he held the architect owed them a duty of care to ensure that the statements he made in the certificates were accurate.

It can be seen, therefore, that a certifier may owe duties to a wider class than his own client. All the more reason why, like good tightrope walkers, architects who take on that role should look neither left nor right, but focus unwaveringly ahead on following their own independent line.

Q&A
Question:

As the architect on a project, I find myself caught in the middle of a growing row between the employer and the contactor on whether it is now "practically complete". Is there a clear legal definition of what this means?

Answer:

The short answer to this question is "no". The situation envisaged in the question is in practice an incredibly common one. A contractor will be keen to obtain practical completion as soon as possible in order to restrict its potential liability for liquidate and ascertained damages. At the same time, the employer will wish to ensure that it gets all that it contracted for, before the works are certified as being practically complete.

The date of practical completion is important because it normally has a number of consequences, including: -

- Occupation of the building by the employer
- The start of the defects liability period
- The release of retention monies
- The end of the period for which the employer is entitled to deduct liquidate and ascertained damages

Invariably the contract between the employer and contractor will provide that practical completion is achieved "when in the opinion of the Architect practical completion of the works is achieved." However, this provides little assistance for the architect faced with the present dispute between the employer and contractor. It has been said that it is easier to recognise practical completion than it is to define it.

Nevertheless, the courts have given some general guidance:

- The works can only be practically complete if ALL of the contracted work is complete;
- The works can be practically complete even if there are latent defects - If there are patent defects then the work cannot be practically complete
- The architect does have a discretion to certify practical completion where there are very minor items of work left incomplete on the basis that these elements of work are de minimis.

Clearly, works should only be certified as practically complete once fully completed, subject to trifling items. However, a practice has developed where a certificate of Practical Completion is issued with a list of items appended that require completion/rectification. The contract does not normally allow this and accordingly if this practice is to be adopted then the employer should be made fully aware of the consequences of practical completion being certified in the circumstances, and both parties should formally agree to that course of action. Other issues that need to be considered are ensuring that the outstanding works will be completed and the disruption that this may have on the employer’s business.

David Arnott is a partner with MacRoberts, Solicitors, specialising in Construction and Engineering dispute resolution.

Disclaimer

The material contained in this article is of the nature of general comment only and does not give advice on any particular matter. Readers should not act on the basis of the information in this article without taking appropriate professional advice upon their own particular circumstances.

© MacRoberts 2006

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.