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A basic guide on what design liability is and why it is an important piece of law for the construction industry

Before your building or structure undergoes construction or engineering work, you can rest assured there will be legally binding policies and specialist insurance in place. And if there isn’t – well, that’s when you know the contractor or sub-contractor working on your project is not up to scratch. In this basic guide, we detail what design liability is and why this piece of law is an integral part of your project contract. If you’ve any further questions about what design liability is and how we, at CCUK, organise it as a specialist contractor – please call 01482 425250 and we’ll be happy to discuss!

What is design liability?

Design liability falls under Section 13 of the Goods and Services Act 1982, along with an amended act called the Sale and Supply of Goods Act 1994[1]. It is encompassed by a type of English law that applies to many industries, including construction and engineering. Design liability ensures that responsibility is taken in the unlikely event of a project failing due to part of, or all of, its design process.

Design liability is a very specific and important piece of law to the construction industry because if there are any damages – monetary, materialistic, or even a person/people suffering an injury – a type of insurance will be in place to help pick up the pieces. Although the term design liability implies the piece of law is all about aesthetics and how the building or structure will look, it is also largely about safety and recovering damages of any kind.

Who needs design liability?

Design liability in construction contracts involves a lot of people! During the execution of a construction or engineering project, there are many roles – contractors, sub-contractors, engineers, architects, and special consultants – all of which play an important part in the building or structure’s design process. This might be because they are designing directly, or because they are in charge of somebody who designs.

At the beginning of the project’s planning, it will be decided who is responsible for which part of the process; for example, the architect might be in charge of choosing where a new staircase is positioned in accordance with a door. Because anything can go wrong in any part of the process, each of the individuals or teams within these roles are assigned to their own parts of the design process and given `design liability`, or responsibility for their area design.

The intricacies of the design liability agreement are often placed in the procurement document created before any work goes ahead, so everybody knows who is in charge of what and whom to speak to about the design liability. There are not many roles that do not involve design, so it’s safe to assume that the majority of your project team will be under design liability. In addition, the majority of specialist construction companies worth their salt will have design indemnity insurance or professional indemnity insurance through a credible commercial insurance provider, so always check this too.

Design liability in the construction industry: why is it important?

Human error happens, even at the hands of the most skilled workers. It only takes an incorrect measurement from an architect or a misjudgment in the technique a contractor uses – and core elements of the project can quickly become compromised. Not only can these errors affect the aesthetics and how things are expected to look, but they can pose big problems when it comes to the health and safety of the public, employees, and anybody else entering the structure or building receiving the construction or engineering work. Without design liability, it would be difficult to hold anybody responsible for mistakes, and, for example – damages cannot be awarded to fix or redo those mistakes.

What happens if design liability is breached?

Design liability is occasionally breached, and of course – it’s not usually an intentional move from the architect, contractor, or whoever is responsible for the breaching. Firstly, it’s worth noting that design liability comes in two forms: “reasonable skill and care” and “the obligation of fitness for purpose”, otherwise known as FFP. In the event of a design liability breach, the level of liability will almost certainly be referenced. If the breach goes to court before judges, which they can do, then they will decide upon damages owed to the owner of the structure or building. This is called a `Tort of Negligence`[2], though it covers human error and any other reasoning for the breach as well.

Examples of design liability breaches in the construction industry

Read about a real case where a contractor’s design was carried out using “due care and requisite skill” and adhered to good industry practice but a serious error occurred. Fortunately, the contractor was covered by design liability.

Read about the case whereby several contractors had design liability and were challenged after a wall suffered damages.

Design liability and CCUK

Our specialist contracting teams are obliged to abide by design liability laws and ensure they follow the correct practices while planning out any new project. For more information, please get in touch on 01482 425250 or visit our website and fill out a form. We look forward to hearing from you!