‘Design life’: know your contract

‘Design life’ is commonly referred to in design and build contracts. However, ‘design life’ is not usually defined in the contract, nor is there a commonly accepted definition of the term. Employers want the contractor to guarantee that the building’s design enables the building to last for a specified period with minimal or no repairs. Contractors do not want the guarantee to be absolute and argue that other factors, such as the employer’s maintenance of the building, should be considered. The legal position on design life has real-life consequences for parties. For example, in Blackpool BC v Volkerfitzpatrick [2020] (Blackpool) shouldering a tram depot’s remedial works, in excess of £6 million, was at stake. Whilst Blackpool has not created new law, it is important as it clarifies the meaning of design life and its application.

Blackpool BC v Volkerfitzpatrick facts

Blackpool Borough Council engaged Volkerfitzpatrick to design and build a tram depot under an amended NEC3 standard form design and build contract. The project was completed in 2011. The tram depot endures harsh environmental conditions due to its proximity to the Irish Sea. In 2015, Blackpool BC discovered that parts of the structure had corroded and claimed that Volkerfitpatrick had failed to meet the contractual design life requirements which it asserted applied for 50 years. Part of Volkerfitzpatrick’s defence was that the contract contained a ‘reasonable care’ clause which limits the scope of the design life obligation so long as the works were designed with skill, care and diligence.

Despite the existence of a reasonable care clause, the court concluded that the more onerous obligation of ensuring the specified design life applied and awarded the claimant £1.1 million for the lesser design life of 20 or 25 years. However, the judgment helpfully explored the meaning of ‘design life’. The claimant was unsuccessful in this part of its claim.

The meaning of ‘design life’

‘Design life’ was not defined in the contract in Blackpool. The judgment considered a number of relevant standards including the BS ISO 15686-1:2000 and the BS EN 1990:2002. The former considers the interplay between design life, service life, performance and durability. The latter considers the balance between anticipated maintenance and major repair. The judgment concluded that a structure is not intended to be maintenance free for the whole of the design life. However, it equally should not require major repairs during the ‘design life’ period.

Anticipated maintenance v major repair

Blackpool makes clear that an employer or owner cannot expect design life to guarantee the structure for the specified period if they do not carry out anticipated maintenance. However, what constitutes ‘anticipated maintenance’ and ‘major repair’?

The judgment determined that it is a question of fact and degree and turns on the maintenance design obligations in the contract. In Blackpool, the contract limited acceptable maintenance to maintenance which is not ‘non-standard’ and not ‘unusually onerous’ in the context of normal construction operations.

The defendant argued that the claimant should have cleaned the structure more often than would be expected of other tram depots because of its proximity to the sea. The judgment sets out that the answer depends upon the contract wording. In this case, the wording referred simply to a similar building in any location rather than a similar building in a similar location. Therefore, the depot’s location did not impose more onerous cleaning requirements on the claimant.

To what parts of the structure does the ‘design life’ clause apply?

A clause in the Blackpool contract imposed a 50-year design life in relation to the ‘building structure’. The parties disputed what was to be included within ‘building structure’ and whether it was limited to the steel structure or also included the roof components amongst other things. The important point for design life purposes is that the judgment confirmed that the design life obligation imposed upon the structure does not necessarily apply to the whole building.

Comment

The Blackpool case teaches us that inserting a reasonable care clause does not dilute the design life obligation. It also teaches that the design life obligation is rarely absolute and that design life periods do not necessarily apply to all parts of the building. However, most importantly it teaches us that the types of maintenance that fall into ‘anticipated’ maintenance and the parts of the structure covered by the design life obligation hinge on the terms of the contract. The variety of scenarios that can play out depending on the way the design life, maintenance and reasonable care terms are drafted and interpreted and the costs that are at stake to parties and their insurers heightens the importance of thoroughly understanding the contract terms before agreeing to them.

Read other items in Construction and Engineering Brief - February 2021

Related items: