Bias
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Substitute clause 2.13 of the JCT DBSub/C 2016 with the following:
“2.13.1 The Sub-Contractor shall be fully responsible and liable in all respects for the design of the SCD Works (including, without limitation, all and any design contained in the Contractor’s Requirements and any Variation) and shall verify the adequacy of such design, correct such design where necessary and complete and supply such design (including any necessary procurement of design from others and the timely preparation and submission of all design documents and information for comment by the Contractor).
2.13.2 The Sub-Contractor shall ensure that the design of the SCD Works (including but not limited to any specifications for the kinds or standards of materials, goods or workmanship) does not contain any inadequacies or errors and complies in all respects with the requirements of the Main Contract, with the Statutory Requirements and with the requirements of the Contractor (including but not limited to the Contractor’s requirements for the integration of such design with the design for the rest of the Main Contract Works). No advice, approval or comment or lack thereof by the Contractor or any other person on any matter connected with or arising from examination of any such design shall relieve the Sub-Contractor of his responsibility for such design or of any liability in relation to such design.
2.13.3 The Sub-Contractor shall ensure that at all times the design of the SCD Works is adequate, accurate and suitable in all respects and shall be fully and solely responsible for any inadequacy or error in or resulting from such design.
2.13.4 Without prejudice to the preceding provisions of clause 2.13, if an inadequacy, error, discrepancy or divergence is found in the design, if any, of the SCD Works contained within the Contractor’s Requirements then the Sub-Contractor shall notify the Contractor in accordance with clause 2.10 and the Contractor’s Requirements shall be corrected to the satisfaction of the Contractor so as to remove the inadequacy, error, discrepancy or divergence but such correction shall not be treated as a Variation or otherwise give rise to any addition to the Sub-Contract Sum or any extension of time under clauses 2.16 to 2.19.”
The clause requires the Sub-Contractor to assume full responsibility for the design of the SCD Works, including design originating in the Contractor's Requirements. It goes beyond a normal design-and-build obligation by requiring the Sub-Contractor to:
The key difficulty is that the Sub-Contractor is being asked to warrant the adequacy of information that it did not necessarily prepare and may not have been engaged to develop during tender.
The clause blurs the distinction between:
Many subcontractors price on the basis that Contractor's Requirements, Employer's Requirements and consultant designs are substantially reliable. Under this drafting, however, the Sub-Contractor becomes responsible for checking and correcting those documents.
Disputes frequently arise when the Contractor argues:
"You accepted responsibility for the design."
while the Sub-Contractor argues:
"The error was already contained in the Contractor's Requirements before we became involved."
Clause 2.13.2 is particularly onerous because it states that no approval, review, comment or lack of comment by the Contractor relieves the Sub-Contractor from liability.
This means that even if:
the Sub-Contractor remains solely responsible.
Clause 2.13.4 then compounds the position by stating that correction of defects in the Contractor's Requirements is not treated as a Variation and gives rise to no entitlement to additional money or time.
A landscaping subcontractor receives tender drawings showing a retaining wall designed by others.
After commencement, the Sub-Contractor discovers that:
Under a more balanced allocation of risk, the redesign may be treated as a variation or compensation event.
Under Clause 2.13:
The clause can expose the Sub-Contractor to substantial unrecoverable expenditure, including:
Because Clause 2.13.4 excludes variation entitlement, these costs may become entirely unrecoverable.
The clause can also create:
Yet the wording seeks to prevent the Sub-Contractor obtaining an extension of time.
The greater commercial risk is that the Sub-Contractor assumes responsibility for defects that may previously have rested with:
The Sub-Contractor may therefore inherit substantial latent liabilities associated with pre-existing design defects.
In a package valued at approximately £200,000.00, a design deficiency requiring:
could generate around £30,000 of unrecoverable expenditure, representing approximately 15% of the subcontract value.
If completion is delayed, additional exposure could arise from prolongation costs and any applicable liquidated damages provisions.
MT Højgaard A/S v E.ON Climate & Renewables UK Robin Rigg East Ltd [2017] UKSC 59 demonstrates that clear contractual performance or fitness-for-purpose requirements may impose liability on a design-and-build contractor notwithstanding that it exercised due skill and care and complied with a design standard prescribed in the contractual documents. Where a contract requires both compliance with a prescribed design or standard and satisfaction of specified performance criteria, the contractor may be required to improve upon the prescribed design or standard and may bear the risk that compliance with it alone will not achieve the contractual result: [27], [36]-[37], [44]-[47], [48]-[54].
Obrascon Huarte Lain SA v Her Majesty’s Attorney General for Gibraltar [2014] EWHC 1028 (TCC) illustrates the effect of express provisions allocating responsibility for employer-supplied requirements and site information. Clause 5.1 required the contractor to take responsibility for the Employer’s Requirements as if they were Contractor’s Documents, deemed the contractor to have checked them for errors, omissions and inaccuracies, and provided that it would have no claim in respect of anything contained in them: [14]. Clauses 4.10 and 4.11 further made the contractor responsible for interpreting site data; deemed it, to the extent practicable and taking account of cost and time, to have obtained the information necessary to assess relevant risks, contingencies and conditions; and deemed the contract price to have been based upon that information and assessment: [13]. Applying the contractual definition of “Unforeseeable”, the Court held that the contaminated soil and groundwater conditions relied upon by OHL were not beyond what an experienced contractor should reasonably have foreseen at tender stage: [213]-[227], [229]-[235].
Taken together, these authorities demonstrate that clear contractual wording can allocate substantial design, information and investigation risk to a contractor. A contractor may therefore be liable where compliance with a prescribed design or standard is insufficient to achieve an agreed contractual outcome, or may be unable to recover additional time or money where responsibility for reviewing, checking, interpreting or assessing employer-supplied information has been expressly assumed. The outcome in each case remains dependent upon the precise contractual wording and the factual matrix against which it falls to be construed.
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1. Bias (B-Score)
How is risk structurally allocated?
Higher numbers indicate increasing allocation of risk to one party.
2. Exposure (E-Score)
What happens if the clause operates?
Higher numbers indicate greater real-world cost, delay, or dispute risk.
3. Enforceability (Enf.)
Is the clause likely to be upheld and applied as written?
Higher numbers indicate greater likelihood of legal effect.