Occasional odd liability arrangements in Dutch construction
The quality of building projects is to a large extent determined by supervision and coordination. Too often a lack of either leads to delays or accidents, notes Building Law specialist Hugo Strang in his doctoral research. More than a Building Quality Assurance Act is needed to improve this, he believes.
Delays and accidents on large construction projects have often made headlines in recent years. With examples like the construction of the North / South metro line in Amsterdam, the reconstruction of the FC Twente football stadium, and the B-Tower in Rotterdam, the parties involved had insufficiently defined the mutual responsibilities in advance. Construction supervision teams failed to prevent the resulting mistakes, sometimes with disastrous consequences. This is how, in 2010, a wide slab floor – with the construction workers on it – collapsed, because essential elements of the supporting construction were missing. “Defining building coordination in contracts is a legal issue, but impacts the process up to the building site”, says Strang, who works for the Institute for Building Law. “If the responsibilities have not been properly defined in advance of the project, the construction site can literally fall apart.”
The fiasco at the building site of the B-Tower is an extreme example, but clearly shows the importance of supervision and coordination, states Strang. In his doctoral research ‘Supervision and coordination in the building process’ he researched supervision (collecting and assessing information) and coordination (managing mutual dependencies), exploring how to best legally regulate these topics. He examined different perspectives to achieve this: a management perspective for the requirements from practice; a legal perspective for the regulation of liabilities and the legal consequences of inadequate supervision or coordination. An important notion from the legal perspective is how the client is obligated to coordinate, but not necessarily to supervise.
How to organise both in the best possible way? Strang does not have an easy answer, but provides several rules of thumb that could be used for different types of contract terms. Effective coordination demands, among other, independent coordination, a clear consultation structure, and clearly defined liability stimulants. Proper supervision comes from intensive supervision on different levels and is, most importantly, independent.
Independent supervision should be better regulated in the deferred Building Quality Assurance Act, proposes Strang. The new law proposes a transition from public supervision to private supervision. “In contrast to public supervision, all kinds of commercial incentives can play a role when working with private supervisors, as there will be a contractual relation between client and supervisor.” This transition even opens up scenarios where clients can sue hired supervisors when they do not agree with damaging assessments. Even though the Building Quality Assurance Act partially addresses this problem, over-all this transition will not incite strict supervision.
Regarding existing Dutch building practices, Strang primarily judges the cancellation of responsibility after completion of building projects. “If the supervisor, hired by the client, misses a visible defect at completion, the client loses all claims against the contractor, even when the contractor caused the defect,” says Strang. “That is strange and wrong, as it reduces liability incentives.”
Therefor the doctoral candidate agrees with a proposed amendment to the Building Quality Assurance Act, extending the liability of contractors after completion – although there still remains room for improvements in the phrasing of the proposal.
On 27 March, Hugo Strang will defend his PhD thesis 'Toezicht en coördinatie in het bouwproces'.