Construction and design professionals should check their insurance to see if they are protected against claims for economic loss following a recent court ruling that allowed client Mirant-Asia to pursue Ove Arup for a claim of US$62.5m arising out of the failure of foundations of a boiler house at a power Station in the Philippines.

The decision, delivered in London at the Technology and Construction Court recently could “open the floodgates” for similar cases, says Stephen Homer, a construction lawyer from firm Ashfords. This is because it appears to end the courts’ resolve to restrict liability for negligence by a designer to physical damage to people or property.

“They are now liable to third parties for financial losses suffered by them as a result of their negligence,” Homer warned. He said architects, engineers and quantity surveyors should make sure their professional indemnity policies cover them for claims of pure economic loss.

Source

Construction Manager