BIM is supposed to help eliminate design risk but the different parties on a project must make sure that their responsibilities and liabilities are clearly defined
The aim of BIM is the identification and elimination of design risk. Claims for defective design do not only arise as a consequence of the design itself being defective, but also due to clashes between various design components. The argument is that these can be reduced or avoided by a proper process of integration. BIM envisages that a computer generated model is produced in the first instance, thus effectively identifying design deficiencies prior to the work being undertaken on site.
At a basic level it will involve a degree of cooperation between the various designers. A more advanced level envisages a fully open and collaborative process with all designers contributing to and taking responsibility for one model from the outset.
Whatever the level of interaction, it is essential that the different parties’ responsibilities and, thus, liabilities are defined. Clear contract drafting is essential. Whilst the aim of BIM is the reduction of design risks it cannot blur the existing clear lines of legal liability. There is the added factor of ensuring that any liability assumed does not extend beyond the insurance cover provided by a typical professional indemnity or design and construct policy wording.
Where BIM has moved to the fully open and collaborative process one can easily envisage an argument that the parties each have assumed a degree of collective responsibility for the design as a whole. Clear drafting is essential to identify what is the extent of the parties’ responsibilities. Does assuming a collective responsibility for the design equate with collective liability and how would this liability be apportioned?
Two areas in particular could add complication. Firstly, whether there is a duty to warn of design risks. Secondly, how could liability be affected by net contribution clauses within consultants’ terms of appointment and within collateral warranties or any third party rights schedules.
The courts have had to consider contractors’ duties to warn of design risks of which they are aware and whether any terms may be implied into a contract which could impose any such a liability. The courts seem to favour a stricter test where the defect gives rise to a real danger to persons or damage to property, other than that which was the subject matter of the design defect. But, as always, the starting point for the considering of any implied terms is the express terms of the contract itself. Any BIM process of itself must create a greater level of awareness which requires identification of what may be the legal liabilities which follow.
A net contribution clause is designed to limit a party’s liability to that which is just and equitable having regard to others’ responsibility for that same loss. Thus there is a degree of apportionment between the parties in default in respect of the claimant’s primary claim.
Ordinarily a claimant may sue any one defaulting party who has caused the loss leaving that same party to seek contributions from any others. The introduction of a net contribution clause means that a claimant must sue all of the defaulting parties,or those which it considers may be in default, if it is to recover 100% of its allowable losses. Consultants are encouraged by their insurers to include such terms within the terms of their appointment.
Similarly in Schedule 5 to the JCT standard form of building contract with contractor’s design dealing with third party rights, a contractor’s liability is limited to the portion which is considered to be “just and equitable” for him to pay. These net contribution clauses are intended to reduce the amount of designers’ liabilities. A fully collaborative BIM process coupled with the use of net contribution clauses could mean all of the parties involved in the design would have to be sued if the claimant is to recover for the whole of its loss. Thus an intention to reduce liability can paradoxically lead to multi-party litigation.
The requirement for clear drafting extends to a designer’s professional indemnity or a contractor’s design and construct insurance policy. Most policies will offer indemnity for professional duties and duties undertaken which would certainly include the policyholder’s own design but not include designs of others. One envisages that insurers will have to specifically agree to extend the policy wording to cover the risks of a fully collaborative BIM process. Without this a party may have to bear its own losses. This especially would be an unattractive outcome.
Jeffrey Brown is a partner in the London office of Veale Wasbrough Vizards