High stakes

When there is a fatal accident on a building site it is a tragedy for the families of the people who are killed or seriously injured, but the ripples spread much wider. The tower crane accident at Canary Wharf in London in May 2000 caused three fatalities, serious injury to two other people, extensive property damage and substantial delay and disruption to the construction works on the site.

So it is disappointing that more than five years later the Health and Safety Executive report into the accident has found no conclusive explanation for why it happened. This is not for lack of trying; the HSE has engaged experts from around the world. None of them has come up with an explanation which is both theoretically possible and also fits the facts as reported by eye witnesses. The HSE has decided, therefore, not to prosecute. The standard of proof in a criminal prosecution is very high in any event – “beyond reasonable doubt”. This is much higher than the “on the balance of probabilities” standard used in civil cases. Therefore fault needs to be clear for a successful prosecution.

That is by no means the end of the matter, though. Even if the cause of the accident cannot be definitely established, the mechanism of failure is sufficiently understood to make changes which should avoid any similar accidents in the future. For instance the British standard BS 7121: part 5 Tower Cranes is being revised. CIRIA is also preparing guidance on tower crane stability.

There is another aspect to this accident: it led to significant delay and disruption to the construction work itself. Arguments about who should pay for the extra costs reached court when Yarm Road, which had hired the crane for the site, sued Hewden Tower Cranes, which had supplied the crane to them. The cost of the delay and disruption was stated in the High Court to be just under £8m; by the time the case was heard in the Court of Appeal, the sum claimed had risen to £16.6m.

Whatever the actual cost of the delays as a result of the accident, it brings home the potential savings to be made from getting it right first time. Most expert witnesses say that, as a rule of thumb, the cost of putting right a defective piece of work or equipment is usually about 10 times the cost that would have been incurred had the work been done correctly the first time. In this case, if there had been no accident it is possible that the whole of the delay and disruption costs could have been avoided.

The case also raises another important issue: the contract between Hewden and Yarm Road was made on the basis of an order that incorporated the Construction Products Association’s model conditions for the hire of plant. The interpretation of those conditions, and their relationship with the standard terms and conditions on the order, was the subject of the litigation. In the High Court and the Court of Appeal, the judges endeavoured to find consistency between the terms on the back of the order and the standard Construction Products Association terms.

The model conditions were drafted for plant that was erected on site once at the start of the contract, then dismantled and taken away at the end. This crane was unusual in that modifications were made to it by the supplier during the period it was on site in order to raise its height. The judges managed to establish consistency between the terms, after some difficulty, and held that Hewden had been in control of the “climbing” operation when the accident happened. The Construction Products Association’s wording was wide enough to cover that process.

So there is a practical lesson to be learned here: it took a trip to the High Court and the Court of Appeal to establish the correct interpretation of the combined terms. Construction contracts can be complex and often involve several documents. In some forms, such as the JCT contracts, there is a provision for resolving discrepancies between the documents. In this case, the court managed to find consistency between the two sets of terms.

It may have been possible to avoid these legal costs if contractual “what if?” scenarios had been considered before the contract was actually entered into.

Gillian Birkby is a partner at Fladgate Fielder, gbirkby@fladgate.com