If a supplier makes a Horlicks of your building, you may find yourself asking a court for the money to put it right yourself. But will the court believe you’ll really do the work?
Some years ago the fire brigade were called to extinguish a fire in south-east London. It is likely the scene was familiar to some of the officers present, since it was the London Fire & Emergency Planning Authority’s new fire-training facility.
The firehouse was subsequently shut down. Litigation ensued. The fire authority sued the designers for negligence and claimed damages for the expected costs of correcting the facility and bringing it back into full operation. Ultimately the judge found that the designers had not been negligent in the original design because it was such a unique and innovative project and, therefore, no damages were awarded. However, an interesting part of the judgment concerned whether the authority had any intention of carrying out remedial works.
The issue is an important one because it is not in the least uncommon for claimants in construction cases to seek damages for the cost of rectifying deficient buildings or facilities in circumstances where the rectification works, at the time of trial, have not been carried out.
The judge found there was none of the documentary evidence that he would expect to see and that this indicated a ‘lack of frankness with the court’
Readers may recall the case of Ruxley Electronics Limited vs Forsyth. It concerned a swimming pool, which was built to a depth that still allowed the claimant to enjoy it fully, but which was less than the depth that the builder had contracted to provide. The claimant sought damages for digging out the pool to get it to the contractual depth but the court found that the intention to carry out such work was an issue to be taken into account when considering whether it was reasonable to award damages for the cost of remedial work. In this particular case the court did not believe that any remedial works would be carried out. As a result only nominal damages were awarded.
In the firehouse case, the judge considered whether the fire authority had any intention of carrying out remedial works. The authority insisted that it did but that the full scope had not yet been determined because until it knew exactly how much damages it would be awarded in the litigation a remedial scheme could not be settled upon. Although in court the fire authority put forward a project manager to say that it was its intention to carry out the works nobody in a position of authority gave evidence on this point. The judge found that there was none of the documentary evidence that he would expect to see and that this indicated a “lack of frankness with the court”.
Indeed, so concerned was the judge with this apparent hole in the authority’s evidence that, shortly into trial, he suggested that if it were really waiting for a decision on liability in the litigation before deciding how to proceed he would consider dealing with issues of liability first, and then adjourning the case so that the authority could make a decision as to how it would proceed in relation to the remedial works.
If there is any doubt as to a claimant’s intention to carry out remedial work this will be a factor that may weigh heavily on a court’s mind before it awards damages
However, the authority declined to take this offer. Indeed, there was internal documentation that indicated it might not be done as the firehouse did not replicate conditions that fire-fighters would encounter in real life. The judge concluded that there was no evidence that any remedial scheme would be carried out.
This case illustrates that if there is any doubt as to a claimant’s intention to carry out remedial works then this will be a factor that may well weigh heavily on a court’s mind before it awards damages for rectification works. While any claimant that receives damages based on the future costs of carrying out remedial works is not obliged to use them for that purpose the level of damages awarded may take into account how the court believes the money will be used.
In order to persuade a court rectification works will ensue it will usually be necessary for claimants to call witnesses in positions of authority, have contemporaneous internal documentation that indicates firm decisions to carry out the rectification works, and to produce properly thought-through remedial schemes and, if appropriate, to have already started the process of tendering for the work. This ought to demonstrate to the court an intention to carry out remedial works.
Nick Henchie is a partner in Mayer Brown International’s construction and engineering group
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