How to Avoid Contractual Disputes over ‘Abnormals’
It’s not what you see or know, it’s about the things that lurk below ground, buried deep, hiding from view.
‘Abnormals’. These are what cause the most problems and have the potential for the worst contractual disputes.
‘Abnormals’ can be found on almost every brownfield site, anywhere in the country. They can vary widely from WWII underground shadow factories and vast quantities of car parts buried during the colourful industrial days of the 1970’s; to abstraction wells over 40 metres deep, old mine shafts and vast expanses of redundant foundations that never seem to end. We’ve even dealt with plague burial pits containing dozens of bodies – at first glance these looked like a crime scene and attracted the interest of the local constabulary!
One thing for certain is that the very word ‘Abnormals’ can cause those responsible for development budgets, to run for the hills and try to pin onerous risks and the resulting financial responsibilities onto the contractor. But a successful project is one where both parties make money, rather than one party off- loading responsibility and forcing the other to complete the project at a loss.
Based on the site condition survey the contractor is often contractually obliged to take financial responsible for the known abnormals…but extending the responsibility to ALL unknown abnormals is becoming increasingly common.
It’s easy to see the flaw of asking contractors to commit to certain outcomes at a time of greatest uncertainty within a competitive environment. When the ink has dried on the contract and work starts on site, it will soon be evident that acceptance of a set of Works Information and Z Clauses has defined the commercial fortunes of the project. The first communication with the design team advising of a possible issue that may lead to a change to the programme, and possibly incur additional cost, starts the almost inevitable process of contractual conflict.
When dealing with sites known to contain below ground issues it is important to recognise that risks don’t remain static…they’ll change as more information becomes known, moving from likelihood to severity with consideration needed for possible avoidance, likely impact, manageability and value.
As an enabling contractor, we are used to the buck stopping with us, but getting the right advice early in a project can significantly reduce your risks and ultimately your liability later on – particularly when you haven’t budgeted for it. It’s vital that you consider the future development plan for the site when devising your site investigation strategy, as this will directly influence the method and extent of the work.
Whilst construction contracts will set out the respective rights and obligations of the parties, it’s a collaborative team approach, involving the client, consultants, contractor, legal and regulatory advisors, that will enable the appropriate management and apportionment of risk.
Involving a review of historical data and visual inspection of the site – this will give some initial insight into the below ground legacy issues resulting from the previous use
With test borings taken in key locations to provide soil samples from various depths for visual observation and laboratory testing
To give a full picture of the site investigation of soil by extending the results into soil sampling, ground gas monitoring, in-situ geotechnical testing and chemical analysis
Your aim during the initial planning stages should be for a diminishing risk profile that creates greater cost certainty by the time you’re ready to procure the services of your remediation contractor.
Getting this early contractor involvement alongside your consultant team will improve accuracy of the likely costs, achieve a shared objective, and enable each party to realise their financial objectives within the constraints of the contract. And, the likelihood of costly contractual disputes will be significantly reduced, which is much better for everyone involved..