Lessons for contractors: Navigating design responsibility in JCT 2016 Design and Build Contracts

A recent legal dispute between contractor ADI Building & Refurbishment Ltd (ADI) and client Workman Properties Ltd (WPL) sheds light on the interpretation of design responsibility under Joint Contracts Tribunal (JCT) 2016 Design and Build contracts. The case, which centred around a dairy facility expansion, highlights critical contractual considerations under design and build contracts.

Background of the Dispute

The dispute originated from a contract signed in January 2022, where ADI undertook to expand facilities at Cotteswold Dairy. The key issue was whether WPL, the client, had warranted completion of the design to RIBA Stage 4 (detailed technical design – the final stage before physical construction work starts) before ADI took over. ADI argued that WPL had provided a completed design, so that ADI would be responsible only for construction rather than additional design work. Conversely, WPL contended that ADI was contractually obliged to take full responsibility for both design and construction, even if some initial designs were provided.

The adjudication and court rulings

Initially, an adjudicator ruled partially in ADI’s favour, agreeing that WPL’s Employer’s Requirements implied that some design elements had reached RIBA Stage 4. However, when the dispute proceeded to court, Technology and Construction Court Judge Stephen Davies ruled in favour of WPL, interpreting the JCT contract as placing the full design responsibility on ADI.

The judge underscored that ADI was responsible for ensuring the adequacy of existing designs and taking on the complete design requirements of the project, as stipulated in the contract. He concluded that ADI assumed the risk if they chose not to verify the completeness of the design already prepared by the consultants to WPL.

Lessons for those using JCT 2016 Design and Build Contracts

This case offers valuable insights for parties working under JCT 2016 Design and Build contracts, particularly around design responsibility and risk management:

• Understand full design responsibility: JCT Design and Build contracts often place complete design responsibility on the contractor, regardless of any initial design provided by the client. Contractors should assume that they are accountable for verifying and completing all design work unless clearly and explicitly stated otherwise in the contract.
• Verify initial design stages thoroughly: In this case, ADI claimed they believed the design was completed to a specified technical stage. However, Judge Davies emphasised that it was ADI’s responsibility to ensure that WPL’s existing designs met all requirements. Contractors should independently verify the adequacy of any provided designs and seek clarification if they are incomplete.
• Clearly define design scope and warranties: The parties must ensure that the contract language around design responsibilities and the stage to which the design has already been completed is completely clear and unambiguous. If the client is expected to provide completed designs to a specific stage, this should be explicitly stated in the contract to avoid any confusion.
• Use novated consultants effectively: Contractors should maximise the protection offered by novated design consultant appointments. In this case, ADI could have pursued the novated consultants responsible for the initial designs if these fell short. Contractors should confirm that novated consultants’ responsibilities align with the project’s final requirements and use these agreements as a safeguard if designs turn out to be incomplete.
• Account for design completion costs in tenders: Contractors must anticipate potential design-related responsibilities when preparing tenders, including additional time or costs required to complete or modify initial designs. Without provisions or contingencies in place, these responsibilities can become a source of unexpected expenses and delays.
• Document assumptions and seek clarifications early: Any assumptions regarding the scope or completeness of design stages should be clearly documented, and ambiguities should be addressed before entering the contract. ADI’s experience highlights the importance of clarifying design obligations early, particularly if there is any uncertainty around design stage completion.

Conclusion

The ADI v WPL decision underscores the importance of precise contractual wording in design and build agreements. It highlights the need for diligence in verifying design responsibility, clear scope definition, and risk management. Understanding and addressing these factors proactively can help avoid costly disputes and maintain a strong foundation for project delivery.

Should you have any concerns about an existing construction contract that your business is party to or require support in the creation of a new agreement, please do not hesitate to contact our in-house specialists at Newmanor Law.