Council CONNECT May 2018 3 Commercial Disputes Issue Designs were submitted by the successful consultant and a preferred design agreed on. The consultant prepared ‘For Construction’ drawings which were then issued by Council to the successful construction contractor. Some months into construction, work was suspended when it became apparent that the design created a step hazard which presented a safety risk for anyone using, maintaining or servicing the facility. Following an on-site inspection, review of the consultant’s design and a reconciliation of the design scope against the design, Council determined that: >  the consultant’s design failed to address safe management, maintenance, use and operation of the completed facility >  the consultant had failed to produce a design that minimised the risk to the health and welfare of construction, operation, maintenance and service workers and all other users of the facility >  the consultant had failed to exercise due skill and care in the preparation of the design. Council further determined that the step hazard was a reasonably foreseeable risk to the health and safety of users of the facility. Action taken Working closely with Council’s project manager, Bartier Perry prepared a detailed letter of demand which: >  clearly set out the basis of Council’s claim, relying on the terms of the contract and the common law >  referred to the numerous ‘For Construction’ drawings prepared by the consultant >  set out the loss suffered by Council, which included additional costs incurred in the redesign of the asset, delay costs paid to the construction contractor, modification of materials already delivered to site and additional costs in retrospectively overcoming the step hazard. Council demanded payment of loss and damage suffered, which included redesign of the facility, additional design costs to overcome the trip hazard, construction contractor’s delay, and modification of materials already ordered and delivered to site. Result Council received a settlement of 74% of its claimed amount without the need for formal legal proceedings. Why does council need to know this? When entering into an agreement for design or any other services, Council relies on the expertise of the consultant. It is vital that the contract clearly and precisely defines not only the design scope stated or inferred from the project requirements, but also any responsibilities, obligations or warranties in relation to the design services which Council wishes the consultant to assume. These may include that the consultant provide a design which is not only fit for purpose but that meets other requirements such as: >  health and safety requirements contained in WHS legislation >  all other legislative requirements >  Council’s policies (if so they should be annexed to the contract) >  all environmental requirements. Furthermore, the consultant must carry out the design so that the related construction work will also comply with these requirements. The importance of this cannot be overstated. It is vital that the contract clearly and precisely defines not only the design scope stated or inferred from the project requirements, but also any responsibilities, obligations or warranties in relation to the design services which Council wishes the consultant to assume.