196 Construction contracts

engineer. A claim can be made if the engineer decides that the conditions or obstructions found fall into this category.

Under the NEC3 form, where a contractor encounters unexpected ground conditions there are limited circumstances in which the additional cost and time incurred in dealing with those conditions will qualify as a compensation event. Under clause 60.1(12) the conditions found must be within the site, not a result of weather conditions and such that an experienced contractor would have judged at the contract date to have such a small chance of occurring that it would have been unreasonable to have allowed for them. Emphasizing this point, NEC3 adds that it is only the difference between the physical conditions encountered and those for which it would have been reasonable to have allowed is taken into account in assessing a compensation event.

The FIDIC 1999 Red Book sets out detailed provisions at clause 4.12 with respect to site conditions and discovery of adverse conditions. These conditions, however, should be read against the employer’s obligation to make available to the contractor all relevant data in the Employer’s possession on sub-surface and hydrological conditions at the site, and that the contractor is deemed to have inspected and examined the site and data provided and to have been satisfied with the related site conditions, access arrangements, laws and procedures (clause 4.10). If the contractor encounters adverse physical conditions, notice is to be given to the engineer. Before agreeing to reimburse additional costs the engineer may also review whether other physical conditions on the site were more favourable and to agree reductions in cost due to those conditions, provided there is no overall net reduction in price.

12.5HEALTH AND SAFETY

The employer’s obligations under the Construction (Design and Management) Regulations 2015 are extensive. Most importantly, the employer of almost any contractor has criminal liability to ensure that a Principal Designer is appointed early in the process and to ensure that no construction work commences until a health and safety file is in place. The obligations on the employer (the regulations refer to the ‘client’) include ensuring that any person appointed to the role specified by the regulations is ‘skills, knowledge and experience’ to carry out that role, before they are appointed. Furthermore, the client has an obligation to ensure that the work can be carried out without risk to the health or safety of any person. The obligation extends to ensuring that all relevant pre-construction information is provided promptly to designers and contractors. Civil proceedings are specifically ruled out for most of the obligations under these regulations, which means that there is little point including reference to them in contracts, since breaching the regulations would incur criminal liability only.

The provisions in the CDM regulations are reinforced by obligations in JCT SBC 11. Under clause 3.23.1 the employer must ensure that both the Principal Designer and the Principal Contractor carry out all of their respective duties under the regulations.