UK: The New British Library Case - The Difference between Insuring and Ensuring

Last Updated: 5 January 1999
The New British Library Case - The Difference between Insuring and Ensuring

By
Patrick Holmes

As construction projects go, few can have greater notoriety than the new British Library at St. Pancras. We shall probably never know who are the real villains in this sorry tale - it is likely that there were many. However, from the privileged position of knowing virtually nothing about the project at first hand, I should like to nominate the project insurers as candidates for the hall of shame.

I have nothing against insurers generally. As their involvement in the industry grows, I would make few friends by saying that I have. Rather, my complaint arises having read the judgement of the Official Referees Court in the so-called British Library case.[1]

One of the problems which emerged during the course of the project was severe damage to electric cables. There was a claim under the project insurance policy for the cost of putting right the damage and the delay associated with it leading to a total payout by the insurers of £8.4million.

The insured parties under the project policy included the government client, the construction manager and the M&E contractor. The M&E designers (Steensen Varming Mulcahy) were not insured under the policy (although they presumably carry their own professional indemnity insurance). No doubt bruised by having to pay out so much money, the project insurers were anxious to recover something wherever they could. It was they who instigated the action in the British Library case, using their rights of subrogation under the insurance policy to sue in the name of the government client.

SVM were alleged to have breached their obligations to the government client in several respects. They had failed in their design (because it lacked "buildability" and the execution of it could not easily be supervised), they had failed to review their design when problems arose and they had failed in their duties to supervise the execution of the works. The Court found for SVM on all counts and the action failed. Somewhat unusually, SVM were apparently awarded their costs on an indemnity basis for certain aspects of the case, which may indicate an overall lack of sympathy on the part of the judge for the case of the plaintiff insurers.

In the midst of all this there is some interesting law. One aspect revolves around this much used word "supervise". Most design consultants will tell you that they are not responsible for supervising the works. The RIBA architect's appointment does not go any further than saying that the architect will "at intervals appropriate to the stage of construction visit the Works to inspect the progress and quality of the Works and to determine that they are being executed generally in accordance with the Contract Documents". For engineers, the ACE appointment requires the engineer to make "periodic visits to the site as appropriate to the stage of construction to monitor that the Works are being executed generally in accordance with the contract documents and with good engineering practice". Such woolly wording was no doubt prepared with previous case law in mind. Time after time architects have been held liable for failing to identify deficient workmanship and materials during the course of building works.

SVM were not so lucky as to have the ACE wording. The obligation in their appointment was to "make site visits of inspection to ensure that the works are being properly supervised and executed in accordance with the design and specifications and otherwise to safeguard good engineering practice".

As a starting point, this is not too encouraging for the consultant. The obligation is "to ensure that" and that naughty word "supervised" appears. However, SVM were found not to have breached their obligation and this is how:

  • The judge found that making site visits to ensure that the works were executed in accordance with the specification did not amount to SVM being required to guarantee the workmanship of the M&E contractor.
  • As a matter of fact, SVM had warned about the workmanship problems (and at the time, the government client had sided entirely with SVM against the M&E contractor).
  • The workmanship problem arose right at the workface where, it was found, SVM could not be expected to supervise in the way that a site foreman engaged by the M&E contractor probably should.
  • The construction manager itself had obligations to supervise and co-ordinate and SVM's obligations were read in the context of this.
  • SVM's appointment provided that the government client could require SVM to appoint "site supervision staff". The client never exercised this power.

None of this means that architects and other designers are off the hook. They should still consider very carefully the wording of their obligation to inspect, monitor or supervise works. However, it seems that generally they will not be required to guarantee workmanship and materials, which must as a matter of common sense remain the primary responsibility of the contractor.

In the British Library case, the M&E contractor was joined as a third party and no doubt SVM would have sought contribution from it in the event that SVM had been found liable. In the circumstances, it seems that the level of contribution would have been high (could it even be 100%?). Bearing in mind that the contractor was one of the insured parties doesn't this suggest that in bringing the action at all the insurers were wasting everybody's time and money?

The practical lesson for design consultants - do whatever you can to get yourself named as an insured under the project policy. It seems that in the British Library case this would have put SVM in the same (protected) position as the M&E contractor.

[1] Department of National Heritage v. Steensen Varming Mulcahy (1998)

This article was first published in Marcfarlanes' Construction Press March 1999 issue.

Macfarlanes' Construction Press is intended to provide general information about developments which may be of interest. It is not intended to be comprehensive nor to provide any specific legal advice and should not be acted or relied upon as doing so. Professional advice appropriate to the specific situation should always be obtained.

If you would like further information or specific advice, please contact Tony Blackler.

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.

 
In association with
Related Topics
 
Related Articles
 
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
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions