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School collapse: Lessons on PPPs and concealed defects

The recent report into a collapsed school wall raises questions on the oversight of PPP schemes and the risks of latest defects down the line.

Defects are a major cause of legal wrangles and it seems likely that the PPP scheme under which 17 schools were constructed or refurbished with defective brickwork will give rise to a dispute.

In January 2016 nine tonnes of defective brickwork collapsed at a school, resulting in the closure of a further 16 schools and the relocation of 7.600 pupils to allow urgent safety inspections and remedial works. The independent Cole Report, published last week, blamed poor building standards combined with a lack of supervision for the collapse, as well as for other widespread defects.

While the poor standard of building was the responsibility of the design-and-build contractor, Miller Construction (now part of Galliford Try), the report is also critical of all the stakeholders in the PPP scheme, including Edinburgh Council for failing to ensure adequate levels of independent technical supervision.

Indeed, the report suggests the appointment of a clerk of works may have helped to avoid the issues during the construction process.

The Royal Incorporation of Architects in Scotland proceeded to call for urgent safety inspections to be undertaken at hundreds of public buildings built since 2000.

This may be an overreaction to a problem that has, so far, been limited to the 17 schools constructed under the particular PPP scheme in Edinburgh. However, the prospect of defects across hundreds of buildings would be disastrous for the construction industry.

Liability for the defects

In terms of the schools, the usual contractual defects liability period of 12 months, during which a contractor is obliged to return to the site and remedy any defects, will have expired years before the brickwork collapse. Liability for these defects is accordingly likely to depend on the extent to which the defect should have been identified before practical completion was certified.

The collapse was caused by inconsistent depth to the brickwork void and incorrect use of brick ties, both of which would have been concealed once the brickwork was completed. The defects will therefore constitute latent defects, rather than patent defects, because they could not have been objectively detectable prior to practical completion.

“Would the appointment of a clerk for works to inspect the workmanship, quality and safety of the contractor’s works have avoided the defects?”

The concept of a latent defect is not a difficult one: it means a concealed flaw in workmanship or design. A council will ordinarily have the benefit of the statutory limitation period to pursue a design-and-build contractor for losses caused by a latent defect arising from its breach. Indeed, it may be able to found its claim on a breach of a fitness-for-purpose obligation or, at the very least, an obligation to design and build to a standard of reasonable skill and care.

It is equally possible that professional consultant(s) engaged to oversee the contractor’s design and workmanship on behalf of Edinburgh Council may have liability for professional negligence.

To establish liability for professional negligence against a consultant, the council will need to show that the consultant owed it a duty of care, and that in failing to spot the problems with the brickwork during construction – and ahead of practical completion – it breached that duty.

Could the wall collapse have been avoided?

Would the appointment of a clerk for works to inspect the workmanship, quality and safety of the contractor’s works have avoided the defects?

Well, the Cole Report found that the desire of private companies to reduce costs in the construction process is a “major factor” in the lack of inspection of PPP projects and in the reduced quality of construction work that led to the collapse of the wall at the Edinburgh school.

Perhaps the industry should revisit the risk / cost imbalance that has crept into PFIs and PPPs and seek to avoid a repeat of this disastrous scheme through the appointment of traditional clerks of works to report to clients.

Finally, it may be that parties to large construction schemes should investigate the possibility of insuring against latent defects (although such insurance can be difficult to secure in the UK insurance market).

It may be that the costs of such a policy can be shared by the project participants, and such a policy will give employers security in circumstances where a contractor may no longer exist by the time a latent defect is discovered.

Richard Booth is a senior associate in the construction team at Holman Fenwick Willan

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