Building For Life: The Court Approach To "Design Life" In Construction Contracts

• Published date: 09 December 2020
• Subject Matter: Corporate/Commercial Law, Real Estate and Construction, Contracts and Commercial Law, Construction & Planning
• Law Firm: Haynes and Boone
• Author: Fiona Cain and Danielli Pugliese

An important consideration for structures being built for use offshore and in challenging environments is their expected operational life. As it is difficult to carry out maintenance and repairs offshore, design and build contracts will commonly specify a design life. In the decision of Blackpool Borough Council v Volkerfitzpatrick Ltd and others¹, the High Court revisited how English courts will construe a 'design life' requirement in a construction contract.

Facts

In 2009, Blackpool Borough Council ("the Council"), contracted Volkerfitzpatrick ("the Contractor") to design and build a new landmark tram depot on Blackpool promenade, next to the Irish Sea. The depot was brought into operation in Spring 2012.

In early 2015, high winds detached a large section of the roof, and, from the resulting inspections, the Council learned of various issues including early corrosion in the roof space, and signs of failure to the cladding panels. The Contractor presented remedial proposals to address the issues that were not accepted by the Council.

The Council started proceedings against the Contractor contending that the Contractor had to perform substantial remedial works costing in excess of '6 million. The Council alleged that the design and construction of significant parts of the tram depot did not meet the intended design life of 50 years and were not suitable for its exposed coastal location. The Contractor disputed the alleged design life requirement, as the contract specified different 'design lives', and that the parts of the works did not meet their specified life or were otherwise unsuitable.

In the judgment from the Technology and Construction Court, the Council was successful in their claim but were only awarded '1.11 million, a small percentage of the amount claimed.

Design Life Requirement

The court found that the intended design life was 25 years and not 50 years as claimed by the Council. In reaching this conclusion, the judge discussed the meaning and extent of the 'design life' requirement under the contract including the applicable standard of care and maintenance obligations on the Contractor. This involved the analysis of key contractual obligations on minimum design life, suitability and maintenance, all of which were related to the design obligation.

Reasonable Care Standard and Hojgaard Case

The Council argued that strict contractual obligations were imposed on the Contractor and this included a minimum design life obligation. The Contractor...