ICE Legal Notes Series

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1 ICE Legal Notes Series Legal Notes Reviewing the work of another Engineer and replacing another Engineer Institution of Civil Engineers

2 Published by the Institution of Civil Engineers (ICE). One Great George Street, Westminster, London SW1P 3AA Date of publication: 16 January 2015 Institution of Civil Engineers (2015) All rights including translation, reserved. Except as permitted by the Copyright, Designs and Patents Act 1988, no part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying or otherwise, without the prior written permission of the publisher, Institution of Civil Engineers, One Great George Street, Westminster, London SW1P 3AA. Acknowledgments Author: Ann Metherall Commissioned by: ICE Advisory Panel on Legal Affairs Also in this series BIM and the Law Liability for Latent Defects (formally Liability for Latent Damage) now Liability of Professionals for Defects Guidance for users of Adjudication Collateral Warranties The Contracts (Rights of Third Parties) Act 1999 Responsibilities under Public Procurement Law

3 Reviewing the work of another Engineer and replacing another Engineer 1 Introduction 1.1 This Note is concerned with questions which may arise when an engineer is engaged to review the work (usually design) of another engineer or to replace another engineer whose appointment has been terminated during the course of a project. Such appointments often take place under contentious circumstances which could result in a dispute or legal proceedings. 1.2 The purpose of this Note is to make an engineer contemplating such an appointment aware of the implications so that he can decide whether or not to accept the appointment and if so, what steps he should take to protect his own position. 1.3 This Note does not provide advice on how such a review should be carried out, is not a Code of Conduct (although reference is made to Codes of Conduct which are published by professional bodies), is not about those design checks that are a normal part of the design process, and does not cover the situation when an engineer is appointed as an expert witness (there is a separate note on expert witnesses). 2 Situations in which a review may arise There are many situations in which an engineer may be required to review the work of another engineer. The nature of the review will differ according to the particular situation and the points made in this Note are not equally applicable in all cases. The following are examples of situations where a review may be required: 2.1 Statutory Design Checks such as are required by the Building Regulations and for bridge design. These are done with the full co-operation of the designer. 2.2 Review of another engineer's design, or critical aspects of a design, as part of a Client's risk management. Such reviews will be a routine part of the project and will be done with full co-operation of the designer. 2.3 Review, for the Employer, of the design carried out under a Design and Construct form of contract. The design will have been prepared by the Contractor or by a consultant employed by the Contractor. Normally in this situation, full design details will be provided and the co-operation of the designer can be expected. It

4 should be noted that the contract may incorporate a fitness for purpose warranty, which involves a higher level of liability than is normally carried by consultant designers and for which special insurance may be required. Refer to paragraph 7.2 for advice on the reviewer's liability in such cases. 2.4 Review of a design when the Client suspects there may be a design problem but before there is any conclusive evidence of it. This may be a confidential situation in which a Client requires advice on whether it should act on its suspicions. The review would be commissioned in contemplation of a complaint and it is probable that the Client would not at that stage, want the engineer whose work is being reviewed to be notified of the review. Such a review is unlikely to be complete or conclusive. Advice on this particular situation is given in Section 4 of this Note. 2.5 Review of a design when there is definite evidence of a potential design defect, often in contemplation of seeking recovery of losses from the designer. In this situation it is likely that the designer will not co-operate with the reviewing engineer. Frequently the professional indemnity insurers of the designer become involved. The designer or its insurers may have received legal advice not to provide information or to enter into any discussion with the reviewing engineer. 2.6 Review of the design (or of other work) for an engineer (or for his professional indemnity insurers) when a Client or third party is seeking recovery of losses for alleged negligence. Co-operation of the engineer would normally be expected in such a case. 2.7 Review of design/specification/methods of construction for Non-Negligence Public Liability Insurers. Such insurance may be taken out by the Employer on projects where the Conditions of Contract require the Contractor to arrange Public Liability Insurance to cover negligence only. Non-Negligence Insurers generally employ an engineer to review the project and advise whether any additional precautions should be taken, either in the method of construction or in the design. The cost of any changes required by the Non Negligence Insurers is generally borne by the Employer. Co-operation of the designer and Contractor would normally be expected in such a review. 2.8 Review of an Engineer's administration and supervision or monitoring of a construction contract. This could arise in a number of situations. For example, when there are contractual disputes between the Employer and the Contractor and the Employer is concerned about the role played by the Engineer. The Employer may

5 also have been obliged to bear extra costs (in paying the Contractor for variations and claims), or the completion of the contract may have been delayed and the Employer may believe the Engineer to be liable. Depending upon the circumstances and upon the relationships between the parties, there could be a lack of co-operation from the engineer concerned. 2.9 Review for a Client of the level of care exercised by an engineer in the preparation of a technical report. This may arise when a Client believes such a report to be defective or insufficient Following an accident or failure. The review may form part of an investigation following a mishap or failure, often involving health and safety issues. This may be conducted on behalf of any of the parties involved; it would involve an investigation and may involve a criminal prosecution of one or more of the parties Review following service of notices under the Party Wall etc. Act. The engineer is instructed by a Surveyor who has been appointed by an adjoining owner to review the work of another engineer or engineers. 3 Reviews - codes of conduct and ethical issues 3.1 Many professional bodies, such as the Institution of Civil Engineers, The Association of Consulting Engineers and the Institution of Structural Engineers, publish Codes or Rules of Conduct that their members are expected to follow. 3.2 It is commonly required that, when asked to review the work of another engineer, the reviewing engineer should not do so unless the engineer in question has first been notified of the review. This is discussed further in Section 4 below. 3.3 When asked to review the work of another engineer, bearing in mind that legal proceedings against the other engineer could follow, the potential reviewer should first establish that he has no links with any of the parties involved with the project that might compromise any opinions he may give. If there are such links, the potential reviewer should discuss them with the Client, take legal advice and, if the circumstances demand it, should not accept the appointment. If legal proceedings are anticipated, the reviewing engineer should consult the Client to determine whether any steps should be taken to ensure that the report is privileged (see paragraph 8 below).

6 3.4 The reviewing engineer should act with impartiality and integrity and avoid causing unnecessary damage to the reputation of the engineer whose work is being reviewed. The review should be factual and avoid derogatory and unnecessary critical comments. The reviewing engineer could be held liable for defamation to the engineer whose work is being reviewed. 3.5 A reviewing engineer should not attempt to supplant another engineer. If an engineer who has carried out a review of the work of another engineer subsequently replaces that engineer, there is a risk that it could be alleged or established in later proceedings against the first engineer, that the reviewing engineer benefited from the review. It could be argued that the reviewing engineer had an interest in having the first engineer dismissed and this could seriously diminish the credibility of the reviewing engineer's evidence. It is therefore suggested that the reviewing engineer and his Client should very carefully consider this possible situation before it is decided to appoint the reviewing engineer to take over the work. It may be desirable to establish at the outset that, irrespective of the outcome of the review, the reviewing engineer would not at a later stage be required to replace the engineer whose work is being reviewed. 4 Confidential reviews 4.1 Situations arise where an engineer may be asked to undertake a confidential review, as outlined in paragraph 2.4 above. When the Client requires strict confidentiality, the reviewing engineer may be unable to comply with his professional body's Code of Conduct as it would not be possible to inform the engineer in question of the review. It is suggested that Codes or Rules of Conduct should not prevent confidential reviews being carried out and that to be so restricted would not be in the best interests of the general public, the profession and the construction industry as a whole. However, such confidential reviews should be the exception and their scope is likely to be restricted by their confidentiality, which should be reflected in the defined scope of the review (see Section 5 below). 5 Scope of the review 5.1 It is most important that the scope of the review should be properly defined and agreed with the Client at the outset. Subsequent responsibility and possible liability will depend upon the defined and agreed scope of the review and upon any undertakings given in it. The extent of reviews will vary and depend upon the circumstances in which they arise. The extent of the contractual liability that could

7 attach to the reviewing engineers can be limited by the terms of their appointment and the extent of general liability by careful definition of the scope of the review. 5.2 When any information that was necessary or would have assisted the review has not been made available to the reviewing engineer, it is essential that this fact, together with any consequent necessary qualifications because of it, be clearly stated in the review report. Where the engineer whose work is being reviewed has not been cooperative and has refused to provide information or calculations, this fact and any limitations it has imposed on the review should be recorded in the report. 5.3 If a review is being carried out in confidence (where the engineer whose work is being reviewed has not been informed about the review), it is recommended that it should be agreed with the Client that the review is of a preliminary nature and must not be regarded as conclusive. It should be expressly agreed at the outset that the report of such a review is to be strictly confidential to the Client only. It is recommended that a full and conclusive review should not be carried out without the engineer whose work is being reviewed being informed and given the opportunity to assist and provide information to the reviewing engineer. It should also be made clear that the reviewing engineer may change his views when he has received additional information from the engineer whose work is being reviewed or from the Client and I or other participants in the project. 6 Contact with the engineer whose work is being reviewed 6.1 Subject to first obtaining permission from the Client, the reviewing engineer should make contact with the engineer whose work is being reviewed and invite him to assist and provide information for the purpose of the review. Note that the original engineer will not be under any obligation to provide any assistance or information, unless the terms of his contract oblige him to do so. All contacts with the original engineer should be recorded. If possible, the reviewing engineer and the original engineer should agree and record all matters disclosed and discussed between them. 7 Liability associated with reviewing the work of another engineer 7.1 Contractual and tortious liability. The reviewing engineer will have a liability under his contract with the Client who has appointed him (the extent being dependent on the terms of engagement). The reviewing engineer may also become liable in tort to the

8 engineer whose work is being reviewed and to other third parties (see paragraph 7.3 below). 7.2 Level of contractual liability. The terms of engagement of the reviewing engineer should define the duty of care to be exercised. This would normally comprise the exercise of reasonable skill, care and diligence in carrying out the review. Where the review is of a design which is required to provide fitness for purpose, particular care is necessary to define the level of liability being accepted by the reviewer. In addition, the responsibility and liability of the reviewer will depend largely on the agreed scope of the review, which should be defined at the outset. The terms of engagement should also state where relevant, any limitations to the scope and to the reliance that may be placed on the review report. The reviewing engineer should consider including an appropriate cap on his liability in the terms of engagement. 7.3 Risk of liability to the engineer whose work is being reviewed. The reviewing engineer could also become liable to third parties in tort. In particular, reviewing engineers should be aware of potential liability to the engineer whose work is being reviewed. The reviewing engineer should take great care to ensure that his reports do not contain comments of a defamatory nature and should also ensure that he has not omitted to consider all relevant aspects of the subject. 7.4 Risk of engineer giving legal opinion. Where a reviewing engineer is asked to give an opinion on a contractual issue or on a matter of law, he should state that it is an engineer's opinion and recommend that the Client obtain a legal opinion on the matter. 7.5 Limitations must be stated. If there is a shortage of information which has prevented or limited the reviewing engineer's investigation of a particular aspect of the review, this should be clearly stated in the report. 7.6 Health and safety liability. The reviewing engineer should be aware of his duties and responsibilities in respect of health and safety. Where it is reasonable to do so, the reviewing engineer has a duty to warn those at risk, in addition to the Client, if he becomes aware of unsafe practices or methods of construction or of an unsafe design or of safety problems in relation to maintenance. Failure to do so could expose him to tortious and possibly criminal liability. 7.7 Confidentiality and limiting potential liability. Unless otherwise expressly agreed, the reviewing engineer should make it clear that the review report is confidential to and

9 only for the use of the instructing Client. Third party rights should be specifically excluded. If legal proceedings are anticipated, the reviewing engineer should consult the Client to determine whether any steps should be taken to ensure that the report is privileged (see paragraph 8 below). 7.8 Need for Professional Indemnity Insurance. An engineer undertaking to review the work of another engineer should be aware of the need to have professional indemnity insurance cover. If such cover is not in place, the reviewing engineer should consider seeking indemnities from the Client in relation to possible claims against him in contract or in tort. Where the terms of engagement require the exercise of a more onerous duty than the exercise of reasonable care, skill and diligence (such as a fitness for purpose requirement), the reviewing engineer should consult his insurer to ensure that this will be covered under his existing policy. 8 Privilege 8.1 In the event of any legal proceedings, the Client may be obliged to disclose all relevant documents to the other side, even if they are unhelpful to his case. An exception is documents covered by privilege. 8.2 Documents which are covered by privilege and which do not need to be disclosed will fall into these categories: (a) Legal Advice Privilege - confidential correspondence between a client and his lawyers which is created for the dominant purpose of giving or receiving legal advice. It is important to note that client is defined narrowly in the context of privilege, and will not necessarily cover correspondence between the reviewing engineer and his Client s lawyers. (b) Litigation Privilege correspondence between the Client or his lawyers, and third parties which are prepared for the dominant purpose of preparing for actual or anticipated litigation. This is the category most likely to apply to the work of the reviewing engineer. (c) Without Prejudice documents which are prepared as part of without prejudice negotiations (i.e. communications with the other side (not third parties) which are made in an attempt to settle the dispute). 8.3 Whether a document is covered by privilege is a question of fact and the rules can be complex. The key point to note is that it is possible to waive or lose privilege in a

10 document by circulating it to third parties. The reviewing engineer should only send his report and any communications to his Client (and, where appropriate, his Client s lawyers) and avoid CCing third parties, even if they are closely involved in the project. 8.4 Where litigation is contemplated, the reviewing engineer should mark all documents (including s) to his client or lawyers Confidential and Privileged In contemplation of litigation." 9 Replacing another engineer 9.1 This is likely to arise when a Client is so dissatisfied with the work of an engineer that it decides to exercise its contractual right to terminate that engineer's appointment. An engineer who is invited to replace an engineer in these circumstances should be satisfied that he is in a position to complete the work. 9.2 An engineer who has been invited to replace another engineer should follow the relevant Codes or Rules of Conduct of his professional body. In particular he should verify that the first engineer's appointment has actually been terminated before he accepts the appointment. 9.3 The possibility of a conflict of interest, or of an allegation that the prospect of benefiting from a replacement appointment would cause the reviewing engineer not to be impartial, should be investigated and, if it arises, or is likely to arise, the appointment should be declined. 9.4 It should be established which drawings and other information would be subject to copyright and which of those that have been prepared by the engineer who is to be replaced would be available for use. This will depend on the terms of the contract between the Client and the original engineer. It is possible that the replaced engineer may be unwilling to co-operate or provide any assistance to the replacing engineer. Attention should, therefore, be given to the practicality of using drawings and other documents prepared by the previous engineer, even where it is established that the Client is legally entitled to do so. 9.5 An engineer who replaces another engineer should realise that he may become liable for design or other work carried out by the previous engineer or his subcontractor before the replacement. If this is not acceptable, the terms of appointment of the replacing engineer should expressly exclude such liability. In practice,

11 however, it may be difficult or impossible to separate such liability and therefore the benefit of expressly excluding it may be limited. First published in 1991 with updates published in 2002, 2005 and The information, suggestions and/or advice contained in this publication are intended for use as a general statement and guide only. Neither the Institution nor any committee of the Institution can accept any liability for any loss or damage which may be suffered by any person as a result of the use in any way of the information contained herein and any person using such information or drafting contracts, specifications or other documents based thereon must in all cases take appropriate professional advice on the matters referred to in this publication and are themselves solely responsible for ensuring that any wording taken from this document is consistent with and appropriate to the remainder of their material.

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