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Liability cap fits


With reference to discussions on unlimited liability in recent editions of NCE, I regularly act on behalf of developers, funders, local authorities, contractors, consultants and other members of the supply chain.

If a designer seeks to cap its liability, whether I act for the client or the designer, my approach is to ensure that: the liability cap is commensurate with the value of the project; it is matched by an appropriate level of PI insurance (plus legal costs); and the premium payable for the cover is commercially realistic. The cap on liability and the level of PI insurance offered does not need to be the designer's maximum cover.

Designers often choose only to make sure that the terms of their appointment are covered by their PI insurance. Some may go further than that and ask for a cap on their liability and/or seek the inclusion of a net contribution clause by returning some form of standard wording. The standard wording is usually easily rebutted unless the designer is prepared to walk away.

If designers take the time, subtle amendments can be incorporated into various clauses of the appointment which can restrict or limit the designers' liability in certain situations.

The cumulative effect of such amendments can yield significant comfort. My first port of call is usually the standard of care, but there are others.

Designers should bear in mind that a mistake can be fairly obvious - it is more difficult to prove that the mistake was negligent.

Wayne Lord CEng MICE MIStructE, uk

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