Duty to Warn: When is a contractor is responsible for design choices made by an owner?

Introduction

A duty to warn is when a party may be held liable for damage or loss caused to another where the party had an opportunity to warn the other of the issues and failed to do so.

We are regularly asked by contractors whether they have any responsibility in situations like the following:

• A contractor is engaged to install timber flooring into a residential property.
• The owner has selected its preferred timber and installation.
• The contractor – a timber flooring expert – installs the flooring despite knowing it is unsuitable for this particular residential property given the climate and it will quickly deteriorate.
• Months later the owner demands the contractor – at its own cost - remove and replace the flooring which has deteriorated.
• Is the contractor liable to do so?

A contractor or subcontractor will often believe that if they have not taken on contractual obligations regarding the design or buildability of works, or they have not recommended the product, they have no responsibility – or liability – for the end product if it does not perform. But this is not always the case.

All contractors engaged to perform work, or to provide services, are required to exercise reasonable skill and care when carrying out construction work. This is what is known at law as a ‘duty of care’ the ‘duty to warn’ is an extension of the duty of care.

A duty of care exists in all walks of life and generally means taking reasonable measures not to cause foreseeable damage or loss to another person or their property. For contractors, this requires them to be aware of the possibility – or probability – that the end product of their work may not be fit for purpose.

So, when is a contractor responsible?

A contractor should ask itself:

Will the construction work or services require remediation or replacement, or not perform as expected to by the owner, if the construction work or services are carried out in accordance with the construction contract?

If the risk is clear - or it should be clear to a responsible contractor - that the work will not be fit for purpose, then a contractor may be under a duty to warn the owner or head contractor.

This could be, for example, because there are physical or environmental conditions which make it impossible for the work to be carried out to the appropriate standard.

Whether or not such a duty exists will be dependent on the circumstances of the job. For example:

• A duty will be far less likely to exist between a subcontractor and head contractor of the same trade where the head contractor can reasonably be expected to be aware of the risks involved.
• Where an owner has received or is getting independent professional advice on the very issue – for example from an architect – it is less likely the contractor has a duty.
• A duty will be far more likely to be imposed where there is a likelihood of significant property damage or harm to an individual.

What to do to avoid liability?

So, what should a responsible contractor do to avoid liability and if it becomes aware of an issue? Julian Bailey recounts the following in his textbook ‘Construction Law’;

Legend has it that the designer of the San Martin bridge in Toledo confided to his wife, just before the bridge was complete, that he had made some major errors in his calculations, and that as soon as the scaffolding was taken away the bridge would almost certainly collapse. His resourceful wife saved her husband’s reputation by stealing out that night and setting fire to the bridge, thus enabling her husband to prepare a new and robust design (which he later did): Jan Morris, Spain (Faber & Faber, 2008) page 56. The Medieval bridge stands to this day…

While the designer was certainly correct to notify someone once he became aware of the issue, the following are some more sensible steps a contractor can take:

• Make clear in your contract terms and in discussions prior to starting a job that you accept no responsibility for the design and have not reviewed the design.
• Clearly, and in writing, advise the other party to seek independent advice regarding the potential design issues as soon as you become aware of an issue or potential issue.
• Advise your employees to make you aware if they consider there could be an issue with the design.
• If you are instructed to proceed anyway; send an email recording that conversation.
• Take photos of your work to show that once the issue arises, it is not a case of defective installation.

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Disclaimer

The information in this article provides you with general information that is true and accurate to the best of Ford Sumner’s knowledge.

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