BIRMINGHAM CITY UNIVERSITY
Course Title: Master of Science Quantity Surveying
Module Title: Construction Law and Contract
Module Code: BNV7127
Construction Law and Contract Administration - Contract Administration
and Dispute Resolution
Submitted by: Abdul Kareem Mohamed Saheel
BCU Student ID: 22163557
Academic Year: 2021/2
Contents
1.0 Contractor’s design responsibility and selection criteria of suitable form of contract..........3
2.0 The contractor’s liability with regards to Simon’s injury due to slipped of iron bar.............4
3.0 Possible ADR mechanisms which would best address the given situation.............................5
4.0 Identifying types of delays and choosing the most suitable delay analysis method................7
5.0 References..................................................................................................................................8
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1.0 Contractor’s design responsibility and selection criteria of suitable form of contract
The proposed six storied building project which is intended to be constructed at Derby in
Derbyshire to expand the commercial activities of Heavy Duty Generators (Private) Limited is
considered to be a commercial purpose building. Hence, project design needs not to be done by
the client since the client’s only concern is “fit for the purpose”. If it is a five-star hotel project,
the design should be done by the client in order to ensure that the design is made as per the hotel
standards and specifications while the client has the control over the contractor in selecting the
materials as specified. Accordingly, this project can be awarded to a design and build contractor
so that he will design and construct the building as it fits for the purpose. Here, the design and
build contractor must acquire a professional indemnity insurance to cover up any legal issues
which may arise later in case if he made any errors in the design work (Elliott & Quinn, 2019).
At the same time, it is also the liability of the contractor to rectify any works if found to be
defective. As a result, the contractor is considered to be the sole party who is legally liable to
deliver the project as it fits for the purpose. Therefore, it is advisable to leave it to the contractor
to select the materials or to specify the materials as required to complete the project successfully.
Selection criteria of suitable form of contract for a building construction project heavily depends
on the key project requirements such as procurement strategy for engaging the project’s principal
stakeholders, complexity of the project, design responsibility, know how knowledge of the
contractor, time certainty, cost certainty, pricing and payment mechanism including lump sum,
fixed price, or cost plus fee arrangements (Powell, 2016).
In order to select one of the forms of contracts from JCT standard forms of contract and NEC
suite of contract as appropriate to the above-mentioned project, firstly, it is important to
understand the main differences of both the forms of contracts when it comes to address the key
issue of the project. To cater a project with design and build procurement strategy, JCT forms of
contract has its version of JCT Design & Build 2015 whereas, NEC Option C would do the same
from NEC suites. NEC forms of contract are widely used for large infrastructure projects due to
its higher management risk involved in collaborative working environment (Wright and
Fergusson, 2009). On the other hand, JCT forms of contract are considered as traditional
contracts and widely used for commercial building development projects since the clients want
more control over the delivery of the project with the comprehensive risk allocations between the
parties (Pain and Bennett, 1988). Therefore, it is recommended to choose JCT Design & Build
2015 form of contract to the subject project.
2.0 The contractor’s liability with regards to Simon’s injury due to slipped of iron bar
It was argued in the case of Nettleship v Weston (1971) that an innocent defendant who is not
experienced will also be held accountable with the same standard and level of culpability as of a
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highly experienced defendant is liable keeping in mind that any person who found guilty of error
regardless of his nature will be held liable.
To ascertain causation in law, the plaintiff must prove that he was in loss due to any actions
which the defendant was responsible. At the same time, the "but for" assessment must be utilized
to determine causation in tort law. In line with this assessment, there will be a question of “if the
plaintiff has had experienced the loss but for the actions of defendants”. If it is yes then the
defendant is not held liable, and if the answer is no, the defendant is held responsible. This
method was already proven from Barnett v Chelsea & Kensington Hospital (1969) case.
In accordance with Health and Safety Regulations, the contractor must observe all safety
procedures during the execution of the work. Safety officer(s) must be in place to make sure the
people passing by the nearby road are in safe instead of only pacing the warning signage boards.
Even though the necessary signs boards are kept in place at several locations as a safety measure,
people movement would any way be permitted in those areas, as the scenario that Simon found
himself passing by the road and got injured which cannot be totally attributed to Simon as it was
his negligence to care of himself. Firms must provide good-quality and diligent service, as well
as conduct in the public interest by accepting responsibility for their activities, according to Rule-
3&5 of RICS's Rules of Conduct, which were announced in October 2021. The contractor must
always provide a duty of care when they execute any site works, anticipating the public
negligence. Therefore, the contractor is always advised to acquire an insurance cover for his site
works against third party liabilities such as bodily injury, death of a person, any loss or damage
to public or third-party properties that may occur during the course of performing the Contract
prior to releasing of the Performance Certificate, according to Fidic Red Book Sub clause 18.3.
As a result, contractor's insurance plan, Third Party Liability and CAR Insurance should cover
the damage and its costs.
3.0 Possible ADR mechanisms which would best address the given situation
According to RICS guidance notes under conflict avoidance and dispute resolution, ADR is
described a consensual alternative approach, which helps to maintain business relationships.
More broad definition could include adjudication, negotiation or mediation, or indeed some other
form of contractual dispute resolution technique.
Mediation and conciliation
The parties agree on an independent, third-party neutral system to facilitate discussions between
them, with the goal of reaching a settlement. The power to settle remains with the parties, but the
process is led by the mediator (Brooker & Wilkinson, 2010).
Mediation & conciliation are basically unstructured ADR methods where a competent theird
party will assist the parties to the contract in reaching to an agreement over any disputes found in
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the contract. It's important to understand the major difference between two-sided negotiation
which is carried out between the disputed parties against mediation or conciliation, where there is
no provision of a neutral third party to assist the parties to have better communication and
understanding of the disputed issue. To conduct mediation or conciliation in a proper way with
the third-party intervention, he third party must be a neutral person. There will be no attempts of
a negotiation with the other parties by a delegate from or of one of the parties.
Advantages of mediation & conciliation
• Outcome of the process will be entirely taken up by the disputed parties themselves.
• It is more convenient than proceeding with litigation or arbitration.
• It does not impair the parties' relationship.
• Parties can keep the process in a confidential context. • It is more successful in resolving
disputes due to lack of understanding.
Disadvantages of mediation & conciliation
• There's a chance the parties won't be able to reach an agreement because their decision is
up to them, and there's no legal power to back up their actions.
• Lack of formality- Because mediation proceedings are not based on any legal criteria,
they lack procedural formality. As a result, the true nature of a problem may remain
hidden.
Adjudication
Reference to the RICS Guidance Note for Conflict avoidance and dispute resolution,
Adjudication under section 108 of the Housing Grants, Construction and Regeneration Act 1996
(HGRCA) was introduced in May 1998. The Local Democracy, Economic Development and
Construction Act 2009 and the updated Scheme will revise some aspects of the adjudication
process. It has been widely used in the construction industry and applies not only to building
contracts but also to professional appointments (Royce, 2021). If the Act applies to a contract,
then either party may request the appointment of an adjudicator to be made within seven days of
serving a Notice of Dispute, and the adjudicator has 28 days from issue of the Referral within
which to issue a decision. That decision will bind the parties and in most cases be readily
enforceable in the Technology and Construction Court (TCC). The TCC is the part of the High
Court that deals with construction related litigation.
Advantages of adjudication:
• Adjudication awards are final and binding where the parties are to abide by the
adjudicator’s decision until escalating the issue with arbitration or litigation.
• Appointment of an adjudicator and his attributes can be mutually agreed by the parties.
• The adjudicator will act as an investigator, and it is not necessary to have formal records
of cross-examinations.
• Legal representations or verbal arguments are not often extensive.
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Disadvantages of adjudication:
• Since the adjudicator’s expenses are frequently non-recoverable, and mistakes can be
expensive, there is little tolerance for error.
• Because each party maintains the possibility of having the same matter handled in court
again, adjudication will not always conclude in a definitive resolution of a conflict.
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4.0 Identifying types of delays and choosing the most suitable delay analysis method
Step - 01 - Determine the acceptable delay events
Delay event - Corona Virus “Covid-19” Pandemic
It is important to conduct a comprehensive investigation and identification of delay events, as
well as to choose the best course of action to resolve these delays while staying within budget
and maintaining quality (Meena and Babu, 2015). In the case of “Unforeseeable shortages in the
availability of personnel or goods caused by epidemics or governmental actions”, the extension
of time is warranted, according to GCOC Sub-Clause 8.4. Due to a global pandemic, the
contractor was unable to avoid the delay.
Step -02 - Recognise the appropriate delay analysis method
In the construction sector, there is no one standard, or "accepted" delay analysis method for
estimating the impact of approved delay events on timeline. Depending on the actual site
characteristics, the delay analysis methodology can be used (Kim et al., 2005). The delay
analysis methodology can with available record and the delay factors (Dinakar, 2014).
There are five typical delay analysis approaches, according to Dinakar (2014),
1. Method of “Impacted as-planned”
2. Method of “Time impact analysis” 3. Method of “Collapsed as-
built analysis”
4. “Window analysis” method.
5. “As-planned versus as-built windows analysis” method.
“Time Impact Analysis” (TIA) method is widely followed according to the recommended
practice number 52R-06 of American Association of Cost Engineers (AACE) International, if
the conditions of the contract has not prescribed any of delay analysis methods. TIA is a
simplified analytical procedure typically specified on construction projects to facilitate the
award of excusable days to project completion, due to delays that were not the responsibility of
the Contractor. It is a recognized analytical technique intended to facilitate a reasonable
estimation of the time impact to the project caused by a single delay event or series of events.
Since the TIA method is uncomplicated and straightforward, it is suggested and chosen as the
best solution in this case. A realistic outcome is most often produced from this method since it
reflects the status of the project at the time of causation of the delay occurrence. This approach
is especially widespread due to its easiness to be applied for concurrent delay analysis as well
and as the fact that it is commonly employed in situations of litigation and arbitration.
As a result, while it's still crucial to consider the limits of TIA in contrast to other
methodologies, the end result will almost always offer a more accurate portrayal of the project's
delays.
5.0 References
AACE International (2007). AACE International recommended practices. Morgantown,Wv:
AACE International.
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Brooker,P. and Wilkinson,S. (2010). Mediation In The Construction Industry: An International
Review. Oxon: Spon Press.
Elliott, C. and Quinn, F. (2019). Contract law. 12th ed. Harlow ; Munich: Pearson.
Kim, Y., Kim, K. and Shin, D. (2005). Delay Analysis Method Using Delay Section.Journal of
Construction Engineering and Management, 131(11), pp. 1155–1164.
Law case: Nettleship v Weston (1971)
Law case: Barnett v Chelsea & Kensington Hospital (1969)
Meena. V and Ar. K. Suresh Babu (2015). Study on Time Delay Analysis forConstruction
Project Delay Analysis. International Journal of Engineering Research and,V4 (03).
Pain, J. and Bennett, J. (1988). JCT With Contractor’s Design form of contract: a study in use.
Construction Management and Economics, 6(4), pp.307–337.
Powell, G. (2016), Construction Contract Groundwork and Management: After Concept to
nd
Completion, (2 Edn.), Basingstoke, Hampshire: Palgrave Macmillan, UK
Royce, D. (2021). Adjudication in construction law. Abingdon, Oxon ; New York, Ny:
Routledge.
Wright, J.N. and Fergusson, W. (2009). Benefits of the NEC ECC form of contract: A New
Zealand case study. International Journal of Project Management, 27(3), pp.243–249.
