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A design for life13 January 2021

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In Blackpool Borough Council v Volkerfitzpatrick Limited¹, the English Technology and Construction Court (TCC) recently provided useful guidance on the meaning of “design life” as that term appears in construction contracts. In construction disputes, the extent to which components of a given structure have met their design life is often a thorny issue. The TCC’s decision will be a useful frame of reference in this regard, as it provides helpful insight on the difference between anticipated maintenance and major repairs.

"It is clear from this case that the courts do expect a degree of maintenance, and that claimants cannot point to the mere fact that maintenance is required as evidence of a defendant’s breach."

BACKGROUND

In 2007, Blackpool Borough Council (“Blackpool BC) engaged Volkerfitzpatrick Limited (VFL) to design and construct a new depot for housing Blackpool’s fleet of trams (the Depot). The Depot was situated on the coastline, adjacent to the Blackpool Promenade and on a site exposed to high winds, salt spray and wind-driven sand.

The Depot was completed in 2011 and brought into operation in 2012. By early 2015, however, when a section of the Depot’s roof detached in high winds, Blackpool BC became concerned that several components of the Depot were showing premature signs of failure, including steel components that had corroded to a greater extent than was to be expected after four years’ operation. It brought proceedings against VFL claiming that significant parts of the Depot did not meet their intended design life of 50 years.

THE CONTRACTUAL DESIGN LIFE OF THE DEPOT

As a preliminary issue, there was considerable debate as to whether the contractual documents did, in fact, stipulate a design life of 50 years for the relevant components. The contractual “starting point” was that the design life for any given component would only be 20 years, save where specified to the contrary. As it was specified that the “building structure” should achieve a 50-year design life, Blackpool BC attempted to argue that a number of components (including cladding panels) were encapsulated within this term.

The difficulty was that “building structure” was not a defined term in the contractual documents, nor was there any prior judicial authority on what it was intended to mean. This was not a case, in the TCC’s view, where the natural and ordinary meaning of the words was of much assistance; while the term is easy enough to apply to traditional structures, in modern structures like the Depot (which used a portal frame upon which cladding panels and a complex, overhanging roof structure were fixed) it can be harder to delineate between components which do, and do not, form part of the building structure.

Interestingly, the TCC did not consider that evidence from structural engineers setting out what role each component played (i.e. in transmitting loadings) was determinative, as such a detailed understanding would not have been in the parties’ contemplation when drafting the contractual documents (and determining the requisite design life of each element). Nor did the fact that the components at issue were priced within a lump sum labelled “building structure” answer the question, as this would have led to inconsistencies (e.g. the foundations were obviously structural, but were priced separately).

"The fact that there was such scope to argue over these issues demonstrates the importance of specifying clearly in the contractual documents which items are to be subject to what design life."

Ultimately, the question was resolved on a component-by-component basis, although most of the items, including the cladding panels, were held to most appropriately fall into the category of “external shell” which specified a 25-year design life requirement. The fact that there was such scope to argue over these issues, including by putting expert evidence forward, demonstrates the importance of specifying clearly in the contractual documents which items are to be subject to what design life, as broad or “catch-all” terms can lead to ambiguities, additional arguments and increased costs.

“DESIGN LIFE” AND THE DISTINCTION BETWEEN “ANTICIPATED MAINTENANCE” AND “MAJOR REPAIR”

Having determined the contractual design life of each component, the TCC turned to the question of what “design life” actually meant, as this term was not defined in the contract either. In doing so, the TCC made reference to a number of relevant British and European Standards, including BS EN 1990:2002 which referred to a period during which a structure may require “anticipated maintenance”, but not “major repair”. 

Key to the definition of “design life”, in the TCC’s view, was the distinction between these two concepts, the TCC noting that while “it cannot realistically be thought that a structure should be intended to be maintenance free for the whole of its design life”, it can nonetheless be reasonably assumed that “it ought not to need major repairs over that period”.

While noting that the degree of maintenance a particular structure will require is always a question of fact, as a general rule the TCC found that “anticipated maintenance” could be described as “maintenance which is not ‘non-standard’ or not ‘unusually onerous’ having regard to normal construction operations and maintenance requirements which are applicable for works of a similar character.”

"The question is whether the maintenance of a particular building is “unusually onerous” compared with a similar building in any location, rather than a similar building in a similar location."

Interestingly, the comparison between routine and “non-standard” maintenance could not take the specific location of the works into account. In other words, the question is whether the maintenance of a particular building is “unusually onerous” compared with a similar building in any location, rather than a similar building in a similar location. This is because the TCC considered that the party carrying out the designs is responsible for adapting its designs to the particular conditions on the ground and, having this responsibility, it could not later blame environmental conditions for greater-than-anticipated maintenance. If environmental conditions are likely to necessitate more maintenance than would usually be needed, the party carrying out the designs is obliged to obtain the employer’s consent, in which case the degree of anticipated maintenance would be largely informed by the terms of that consent. In any event, the contract in this case clearly stipulated that the designs must be suitable for an environment with a “high saline atmosphere and high wind loadings”.

APPLICATION TO THE FACTS

In monetary terms, Blackpool BC’s most substantial claims concerned galvanised steel cold-formed components; that is, the purlins, cladding rails and connecting brackets that connected the wall and roof sections of the Depot to its portal frame. Blackpool BC argued that these components were exhibiting signs of premature corrosion and did not meet their contractual design life, whether that was held to be 50, 25 or 20 years.

However, the TCC held that while the evidence did indicate that the Depot exhibited localised areas of rust and loss of galvanised coating, there was no evidence that the cold-formed components would not nonetheless be able to perform their 25-year design life. For these localised areas (for instance, under the overhanging roof, where chlorides deposited from sea spray were not washed away by the rain and accumulated as a result), the TCC held that a “prudent operator” of the Depot, with knowledge of the localised corrosion, “might reasonably be expected to undertake limited and localised works, not going beyond reasonable maintenance”. Such maintenance included removing the worst of the deposits on the affected areas and touching up those areas with zinc paint. The TCC did not consider that such steps, which the evidence suggested should be carried out annually, amounted to “non-standard” or “unduly onerous” maintenance on Blackpool BC’s part; rather, this was the “obvious and rational” solution, rather than full-scale repairs which were not yet necessary in any event, and could be deferred for at least 25 years if such annual maintenance was undertaken.

"While the question of what maintenance may be necessary for a given structure, and whether such maintenance is “non-standard” or “unduly onerous”, will always be dependent on the facts and evidence, this case is illustrative of the kind of approach the English courts will adopt."

Conversely, the TCC found that there was a widespread problem of blistering (i.e. delamination of the external coating from the substrate) along the cladding panels of the Depot which, if left unchecked, would cause corrosion of the steel substrate. VFL argued that a design life of 25 years could nonetheless be achieved if Blackpool BC cleaned the panels regularly, which it alleged Blackpool BC was failing to do. While Blackpool BC had been cleaning the exterior of the Depot annually, on the evidence the TCC found that the cladding would need to be cleaned at least four times a year to avoid the blistering it was experiencing. While such cleaning may, at first glance, seem like “routine maintenance”, the TCC held that arguments to that effect were “actually deceptive when one considers what would be involved in terms of frequency and cost”. Consequently, such maintenance was unduly onerous such that VFL was in breach of its design life obligation.

CONCLUSION

While the question of what maintenance may be necessary for a given structure, and whether such maintenance is “non-standard” or “unduly onerous”, will always be dependent on the facts and evidence, this case is illustrative of the kind of approach the English courts will adopt.

Where a particular component needs to be replaced before the end of its design life, there will usually be little doubt that the constructing/designing party is in breach of their design life obligation. In the meantime, the degree of upkeep a component may require to ultimately meet that design life is a much less straightforward question. It is clear from this case that the courts do expect a degree of maintenance, and that claimants cannot point to the mere fact that maintenance is required as evidence of a defendant’s breach. Rather, in the context of the structure at issue, claimants will need to show such maintenance is unduly onerous, by reference to factors such as frequency and cost.

[1] [2020] EWHC 1523 (TCC).

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