FIDIC Red Book 1999 Edition – Design Liability

FIDIC Red Book 1999 Edition – Design Liability

The FIDIC Red Book 1999 Edition is drafted primarily for the intention of use on projects where the design is carried out for the Employer by designers employed directly by the Employer. Thus the general principle would be that as the Employer through the Engineer is responsible for the provision of the design the risks associated with such design would by the Employers. The Fact that the designers has carried out the design is irrelevant as the designer has been commissioned directly by the Employer.

The FIDIC Red Book 1999 Edition has been executed between the Employer and the Contractor and the Contractors primary obligations under the contract are to execute the Works in accordance with the Design and Specifications within the time constraints stated in the contract.

In the event that a defect or in the case of more than one, defects are discovered in the design during the course of implementation of the works the Employer will be responsible for instructing the Contractor through his Engineer on the actions to be taken to overcome the design flaw discovered by the Contractor. Similarly the time and cost implications associated with overcoming the design flaw in the design provided by the Employer would be the liability of the Employer. In such circumstances it would be for the Employer to take up possible recovery of any losses he had incurred as a direct result of the design flaw should he be able to establish losses had indeed been incurred and it was a result of the negligence of the designer as provided for in the engagement agreement between the Employer and Designer.

The FIDIC Red book 1999 Edition does allow for the Employer to include for portions of the Works to be designed by the Contractor providing these are clearly specified in the documents making up the Contract. So adopting the principle that the party responsible for the provision of the design would be liable for any flaws in the design in this instance it would be the Contractor. Similarly if the defect was detected during execution of the works the Contractor would be responsible for the execution of any rectification works as may be instructed by the Engineer.

Where a defect or flaw was discovered after the issuance of the Final Certificate in respect of the works again the party who was responsible for the provision of the design would be responsible for the costs associated with the design flaw, but in the case of the Contractor there would be no obligation to either provide a design solution or carry out the works. Liability would be subject to legal action as a general principle unless design warranties or guarantees had been provided.

The Contractor is generally responsible for the design of his temporary works required to execute the permanent works whether the permanent works were the design responsibility of the Employer or the Contractor under the contract. This has been brought into question where a design flaw is deemed to breach statutory laws or regulations in such circumstances the designer has also been found responsible if his engagement with the Employer places responsibility for on-site checking and supervision with the designer. The courts have ruled the designer had a duty of care to the Employer and if he is negligent in not highlighting flaws in any design or method of working which he clearly had a knowledge he can be held liable for the Employers losses. See MALCONLAW Article in respect of designer’s responsibility for temporary design

Where the contractor has proposed a design change either as an alternative or under the provision of Sub-Clause 13.2 of the standard form in which the contractor is able to benefit from cost saving achieved through value engineering the Contractor would be responsible for the design revision together with its effects on the permanent design which result from the proposal. It is advisable therefore for Contractor to consider carefully any design proposals they put forward for acceptable by the Employer.

To summarise it is fair to say that the party responsible for the provision of design under the contract will carry the liability in respect of that design. In addition designers may find themselves held liable to the Employer for design errors if it is found they have been negligent in the provision of their contracted services.