Here's the story of an engineer being chased by a contractor after cracks appeared in a block of flats - and how it tried to lose its pursuer
An unfortunate parallel might be drawn between a typical construction dispute and a bad incident in a school playground. The main protagonists might be as guilty as sin, but if they possibly can they'll always pin the blame on somebody else.
Owing to the nature of construction work, disputes are often multiparty affairs. Contribution proceedings are therefore of particular relevance, not least because defendants to the main action tend to spray them in every possible direction in an effort to lay off as much blame as possible.
Under the Limitation Act, contribution proceedings must be brought within two years of the settlement of the main action. In my previous article (18 November 2005, www.building.co.uk/archive)
I mentioned the plight of Aer Lingus and complained that it was unjust that the clock started ticking on those two years before damages had been assessed in the main action. The Court of Appeal was of the same view. On 17 January it overturned the original ruling.
Now there has been another recent case on the question of contribution proceedings, which raises further interesting points. It is Baker and Davies plc vs Leslie Wilks Associates 2005.
Here the employer brought a claim against the building contractor in respect of cracks in a block of flats. The cracks were caused by the negligent work of the engineer, which was employed by the contractor. The contractor carried out remedial underpinning works and also paid damages to the employer. Not surprisingly, the contractor brought contribution proceedings against the engineer under the Civil Liability (Contribution) Act 1978.
The hearing in question was not about whether the engineer had been negligent. That was to come. Instead, it dealt with a couple of preliminary issues the engineer had raised in the hope of knocking the claim on the head before it started looking ugly.
The protagonists might be as guilty as sin but if they possibly can they’ll always pin the blame on somebody else
The engineer, rather cannily, claimed that, as the contractor had carried out remedial work as well as shelling out hard cash, the remedial works element was not caught by the combined effect of the Contribution Act and the Limitation Act, both of which specifically refer to "payment". It was even able to cite some supporting cases.
Once news of that particular line of argument broke, certain choice words would probably have been audible at a considerable distance from the contractor's office. After all, the contractor had toiled to rectify what was, in its view, the engineer's mistake. Fortunately for the contractor, judge Havery seemed to think it was a bit of a cheek too and ruled that "payment", in the parlance of the average man on the street, must be understood to include payment in kind, at least where it could be valued in monetary terms.
The engineer's first card had therefore lost the trick. However, it had another up its sleeve. It said the claim between the employer and the contractor had been settled by February 2001, when the employer approved the remedial works. It therefore declared that the two-year time limit for contribution proceedings had expired in February 2003, whereas the contractor had not issued them until April 2004.
The engineer deserved full marks for inventive defences, but on legal viability the judge marked it down, finding that the employer had only accepted the work as final when it executing the settlement deed on 11 March 2005. That was after contribution proceedings had been commenced.
If the engineer's argument had been upheld, a non-binding arrangement in the main action could be reached and then the two years within which to bring contribution proceedings could expire. If, then, the arrangement were to fall through, it would be too late for contribution proceedings to be brought. Such an injustice could not possibly have been the intention of parliament in drawing up the Limitation Act. The decision in the case makes perfect sense.
Melinda Parisotti is an in-house barrister at Wren Managers, which manages a professional indemnity mutual for architects