By Dr. Haris Deen | March 8, 2011
Everyone in the construction industry talks of “decennial liability” but most of them have not got a clue as to what it means. Decennial liability is liability for stipulated occurrences over ten year periods of time. This is particularly applicable as a strict liability under French Civil Law for construction works. Even Common Law countries like the United Kingdom, the United States and Canada have a system of decennial liability underwritten by insurance. The extent and exposure of the parties liable may differ from country to country but the principle is the same.
What is Decennial Liability?
As described in the foregoing paragraph, this is liability that is imposed by law on construction activities for a period of ten years. Any damage or collapse to a constructed structure will require to be reinstated to its original position by the persons responsible. The liability in respect of the part so reinstated will continue to remain for another ten years while the rest of the structure will be subject to the period of liability remaining. As an example, if one part of a building collapses due to a failure in one pile after five years of its completion and the parties concerned repair and reinstate this portion by underpinning the pile and restoring the damaged part. The liability for this part will continue for another ten years while the unaffected parts will be subject to the remaining five years of the period of liability.
Who is held liable?
Article 1792 -1 of the French Civil Code gives a broad brush definition of “builders” as (1) architects, contractors, technicians or other persons bound to the building by a contract of hire or work, (2) any person who sells, after completion, a work which he built or had built (3) any person, who, although acting in the capacity of agent for the building owner, performs duties similar to those of a hirer out of work. The consultants (the one responsible for design and also the one responsible for supervision) and the contractor are jointly and severally liable for any collapse. Therefore, it would mean that the designer (architect or engineer), the supervisor and the contractor are equally exposed to the issues of liability insofar as their respective involvements are concerned. The French law extends the liability to developers and leasing agents as well, who in turn will extend the liability to the first category of people. In Abu Dhabi it is mandatory that supervision of building works should be carried out by a licensed engineering office. Thereby the Abu Dhabi Law on “Organising Building Works” makes designers and/or supervisors liable both for safety during construction and for a period of ten years thereafter. Articles 880 to 883 of the UAE Civil Code attaches, mandatory ten years liability on the contractor, designer and supervisor. Similarly Articles 602 to 697 of the Kuwaiti imposes decennial liability on the contractor and a division of design liability in unclear terms. Saudi Arabian Rules for Implementation of the Tender Regulations – Article 30 and the Oman BCEW Conditions for public works makes the contractor liable for ten years with a requirement for the contractor to review the design of the works. Does this mean that the designer and supervisor is not held liable? According reliable sources not so, they are equally liable according to their interpretation of the law. In the State of Qatar main contractors, design consultants and supervisors are liable under Article 711 of Law No. 22 of 2004 of the Civil Code. Therefore, generally it is the designer (who designs the building), the main contractor (who constructs according to the design provided) and the supervision consultant (who is expected to ensure construction according to the design) are all liable under the Laws cited in this paragraph.
It seems unreasonable to hold the supervision consultant, where he has no involvement or say in the design but supervises the operations to ensure construction according to designs and specifications supplied to him. It would seem that the original intention would have been that the design consultant himself supervises the construction works. However, this is not so in the Middle East. Therefore, it will be up to consultants undertaking supervision work to challenge this concept by proving that they had acted with absolute skill and care and it is not their negligence, lack of care or diligence that caused any damage. The burden of proof will be on them (reverse burden), because the owner does not need to prove fault.
What is the law?
The French Civil Law could be described as the trigger for decennial liability, aimed at protecting the interests of building owners. The Spinetta Statute enacted in France in the year 1978 guarantees the protection relied upon. Articles 1792 and 1792-4-1 of the French Civil Code make it a strict liability on builders for construction works up to ten years from acceptance of the works. There is no need upon the owner to prove fault when any damage of a defined nature occurs in order to claim usually repairs. The Articles of the Laws of the different countries cited in the last paragraph to a great extent states the law, except in Bahrain where the liability is for five years. The UAE’s Civil Code, Federal Law No. 5 of 1985 contains extensive clauses to cover construction work and Articles 880 to 883 impose upon the contractor and the designer strict joint liability for ten years covering any defect in the building designed by the architect and constructed by the builder. It is important to note that Article 880 (1) also makes the supervision consultant liable.
The decennial liability period starts when the works are taken over at the end of the contractual defects liability period on the issue of the defects liability (in some contracts maintenance) certificate. Any defects of whatsoever nature that would appear during the contractual defects liability period do not come within the ambit of decennial liability. Decennial liability starts only after all contractual liabilities are extinguished.
Does that mean that there is no contract in place and the contractor and the consultants are absolved from any further liability?
Not so – decennial liability is a legal requirement and has to be honoured whether included in the contract or otherwise.
What is the extent of liability?
The extent of liability extends to all buildings or any other structures against total or partial collapse and/or a defect threatening stability or safety of the structure.
There is no specific definition of a building or structure in the Laws attributed to Decennial Liability in the Middle East. The NHBC Insurance in the UK though covers specific events so described therein.
Michael Grose and Laura Warren point out in respect of Decennial Liability under the Qatari Code, that liability attaches notwithstanding that the collapse or defect is caused by sub-surface conditions or that the building owner approved the defective work and that buildings or structures, the life cycle of which is less than ten years, attract liability for the duration of that life cycle.
The question often arises in respect of infrastructure projects which has a combination of buildings, structures (like bridges, underpasses, overpasses, culverts etc). Where does one draw the line? I believe that in applying the law one must give it’s simple meaning as perceived from the wording in the Law. A building is simple as defined but the problem of interpretation arises when dealing with a structure. Is road a structure? Probably someone will come up with an answer or seek the courts intervention. In this context it is relevant to refer to Article 880 (2) of the UAE Civil code which translated into English states that “the obligation to make compensation shall remain regardless of whether any defect or collapse arises out of a fault in the land itself or that the employer consented to the construction of the defective buildings or installations. Under Article 1792 of the French Civil Code the damages on a work must, either endanger the strength of the building or affecting it in one of its constituent parts or one of its elements of equipment, render it unsuitable for its purpose.
Is it insurable?
In Europe and the Americas there are insurance companies providing decennial liability insurance. In the United Kingdom for instance all contractors take out the NHBC insurance to cover this risk. I also found an insistence on some owners in Saudi Arabia for contractors to provide such insurance. Under French Law Article L 241-1 a builder must be covered by compulsory liability insurance (assurance de responsabilite obligatoire) and must be covered by compulsory insurance against damage under Article L 242-1. The French law is very strict on these insurances and imposes a punishment of a six months prison sentence and/or a fine of €75,000.
It will be a prudent action on the part of investors in the Middle East dependant on foreign contracting firms for almost all their major construction needs, to insist on providing such insurance. The problem really will arise in the administration after the works is complete and the contractors have left the country. The logistics of the administrative arrangement will have to be meticulously worked out.
Time for bringing a claim
In common law countries the Statute of Limitations will provide the time limit with which a claim should be brought. In the UK for contractual claims it is six years from the first occurrence of the event. In the USA it depends on each States laws.
According to Article 714 of the Qatari Civil Code, claims for compensation must be commenced within three years of the collapse or discovery of the defect. Similarly Article 883 of the UAE Civil Code makes it mandatory for a claim to be brought within three years from the collapse of the building or discovery of the defect.
Bundschuh, G – Risk Brief – Design and Construction (February 2009) – Ames & Gough (downloaded 07.03.2011)
Dimitracopoulus A – Architects Liability Under UAE Law (September 2004) (downloaded 07.03.2011)
Grose, M and Warren, L – Decennial Liability under the Qatari civil code – (October 2007) – Clyde & Co (downloaded 07.03.2011)