14/07/2010
Do you employ construction contractors? Are you facing claims for more money from construction contractors on your building projects? Are your professional advisers responsible for your losses?
The economic climate and increased claims
In the current economic climate, contractors may seek to maximise their recovery of costs from their employer, over and above the agreed contract price.
Your retained professional advisers, such as architects, engineers, surveyors, valuers and project managers, may have failed to provide their services at the necessary quality, or on time, perhaps due to a lack of available resources. This could result in, or may already have resulted in, significantly increased financial claims against you by the contractor and increased costs of your organisation in dealing with those issues.
Your professional advisers may not let you know if their own breaches of contract (under direct contracts, novations or collateral warranties) or breaches of duty have been the cause of these increased claims and costs, and sometimes they will not appreciate the impact of their breach of duty.
Possible consequences of this are that you may continue to face increased claims from the contractor, be unaware of your rights to recover damages in respect of your increased costs and losses from the professionals (who will invariably have professional indemnity insurance for precisely this type of event), and be unable to rectify underlying problems and restore the project to running smoothly again.
What types of errors by professionals cause employers loss?
There are many types of breaches of duty which can cause an employer loss. The most common are:
- defective design
- late provision of drawings or information
- defective site inspections and reports
- incorrect budgets or estimates
- failure to properly organise a building project
- negligent valuation, assessment or certification
How can we help?
We can help you identify breaches of duty by professionals, and advise on appropriate strategies for recovering your losses, addressing the underlying problems and preserving partnering arrangements where appropriate.
As well as advising on the validity of contractual claims for loss and expense, we have significant experience in giving practical, clear and cost effective advice to clients on recovering money and negotiating solutions in connection with claims against architects, engineers, quantity surveyors, surveyors, valuers and project managers. Once the strength of the employer's legal position is established claims are usually resolved by negotiation or mediation, without recourse to litigation.
