Managing design risks and liabilities in an integrated world

Designers need to be willing and able to innovate, but significant pressure can be felt when there is also a drive towards greater regulation aimed at safety and protection from risk. Regulation has a tendency to encourage designers to follow more tried and tested routes rather than developing bold new innovations.

Pinsent Masons explored these issues at a recent event.

Legal principles applying to designers

The duties of a designer are defined by the scope of work and their express, implied, tortious, statutory, professional and ethical obligations. All of these can overlap, and all are changing rapidly.

The two most common duties for a designer relate to reasonable skill and care and fitness for purpose.

The former duty requires a designer to show that they acted in accordance with the usual practice and professional standards at the time that the design was carried out in order to discharge their duty.

The obligation to exercise reasonable skill and care has become more challenging in modern building or construction projects, with designs which are more technologically advanced and complex. It is increasingly common for designers to engage in multi-disciplinary services, where they are judged against the standard of competence in the particular discipline they are providing the services in.

It is important for a designer to specifically disclaim specialist expertise if they do not have it, and to tell a client to seek specialist advice elsewhere. This is especially important because the law will not accept the argument that designers failed to meet the required standard because of tight timelines or a low bid.

‘Fitness for purpose’, meanwhile, is a duty that has been more common in civil law countries, where an architect is required to make a feasible design in accordance with the client’s wishes. However, it has become increasingly common for professional engagements governed by common law to have fitness for purpose obligations as well.

This means that a designer takes on an absolute obligation to achieve a specified result, and imposes a tougher standard than the reasonable skill and care obligation.

Although the strict imposition of this obligation can impose a requirement to do the impossible, courts in common law jurisdictions are generally inclined to give full effect to it.

Challenges for the design sector

Within this context, a tension between regulation and innovation in design arises from the need to balance the economic, social and environmental advantages that come from innovation against protecting consumers from the risks that may arise from innovative developments.

Regulators and other stakeholders can impose highly prescriptive requirements that curtail this progress. For example, standards groups within agencies can stipulate overly restrictive, capital-intensive, and often obsolete standards, specifications and review processes. Design and construction certification processes can prevent innovation because the risks to project participants to make changes are not worth pursuing, particularly during delivery.

If the correct balance between innovation and safety considerations is not achieved, regulation of design has the potential to be a barrier to innovation and to the rapid progress required to make environmentally sustainable design and construction pervasive.

Striking the right balance requires more dialogue and discussion and a willingness for further regulatory reform underpinned by the desire to promote innovation with due consideration for safety and liability issues. More collaborative contracting models may assist in support this kind of progressive approach.

Future changes

Design risks have been thrown into sharp relief in recent years following the façade cladding fires at the Grenfell Tower in London and Lacrosse Tower in Melbourne, and also following major and very public structural defects at the Opal and Mascot Towers in Sydney.

Addressing these risks, the current proposal in the UK is to introduce a 30-year retrospective limitation period for claims under the Defective Premises Act (DPA) 1972 against the original constructors of a building if that building is found to be non-habitable for safety or indeed other reasons, and a 15-year prospective limitation period.

This would extend the current limitation period from six years under the DPA, while contractual limitation under a deed is usually 12 years.

There is already a substantial volume of litigation in the UK in relation to fire safety defects which is proving difficult to resolve. The reasons for this often go back to design and not having a clear picture of whether what was actually built was what was designed, and whether and to what extent any remedial works are now required.

This, and the safety implications which flow from the situation, is the underlying rationale for adopting a ‘golden thread’ approach, to ensure that the design and as-built condition is clear and documented for the building owner, asset managers and forward purchasers.

The UK’s Building Safety Bill is intended to drive significant cultural change at all levels. The lead architect of in-scope projects will now have to sign off jointly with the building contractor that the building complies with building regulations, meaning designers will have to be much more integrally involved in the construction phases of a development.

In addition, there are extensive obligations in relation to notifying changes to the design to the regulator and, for certain more significant changes, approval needs to be sought before works can proceed. These issues all have the potential to cause significant delays to the works and drive up construction cost.

Technology: risks and opportunities

Building information modelling (BIM) is being used far more across a building’s life cycle to enable data gathering on carbon and operational performance of an asset, and a further increase in its use is expected.

Use of BIM means much more detailed design is being done up-front, and it is becoming harder to change fundamental design elements later in the process. This contrasts to traditional design and build models, where detailed design is typically completed throughout the construction phase.

BIM results in a more heavily specified approach to design, making it more difficult to pass responsibility for that design to the supply chain. Parties are now also looking to use BIM through to the operational stage, as that is when you get the most benefit out of a so-called digital twin. This means updating the information model with the as-built information, driving a much more intensive approach to defects identification at completion.

More collaborative contracting approaches during the design period, such as early contractor involvement, will support more design being carried out earlier but we also expect to see an increase in approaches like construction management which allow clients to maintain better control over design and quality.

The transparency and accuracy of digital information is likely to provide project parties with a far greater understanding of the root cause of issues, so liability may be much clearer and therefore disputes may be able to be resolved more rapidly. Data and digital information certainly has the potential to help parties to avoid disputes.

The use of BIM is likely to lead to a more collaborative approach to data sharing, and one option could be the development of a client-led ‘federated’ approach where suppliers are asked to opt in and share data in exchange for receiving benefits from data-related insights which will help them manage their own risks.

Construction disputes experts Mohammed Talib, Adam Perl and Zoe de Courcy Arbiser of Pinsent Masons contributed to this article.