It is becoming increasingly common to find that householders are taking out home insurance policies that include legal cover that enables them to have use of solicitors and representation in the event of a situation arising from any complaint against a contractor, as part of that cover. Many such complaints concern potential claims involving allegations of poor workmanship on the part of a contractor or their sub-contractors – or poor-quality materials supplied on a project. Because of the nature of landscape construction projects – by definition multifaceted, with a wide range of different products used in the build – even the most professional of contractors may become subject of a claim for compensation. A claim that costs the householder nothing to pursue……
Looking at an example of a common complaint – say, an allegation of loose paving, the existence of which must be the fault of the contractor, no matter who supplied the products, specified the laying techniques or which grout to use, what levels or cross falls were stipulated by the designer – all responsibility must be with the landscaper who is held to be the professional on site.
Fair or unfair, the Law always regards the contractor as the being in charge of all operations, and therefore is the primary target for any claims for neglect or compensation no matter who else may have been involved. Failures by the customer to ensure that nobody walks across newly laid paving, or allowing their children to use the area as a cycle track – or keep window cleaners and their ladders at bay, will count as nothing when compared with the contractor’s liability. Indeed, any counterclaims by the contractor, may be treated as mitigation only in extremis.
Once a customer has decided to pursue a claim, they will contact their insurance company, stating their case. Depending on the value of the claim, the insurance company will seek a report from an independent expert witness, usually titled a ‘Report on the Condition of Works Carried out at ???’ House’, which will be an Extant Report detailing conditions found at the site at the time of inspection. A snap-shot in time in fact, with photographic evidence included as an Appendix.
This report is paid for and commissioned by the insurance company, who will instruct a chosen firm of solicitors, who will produce a set of questions for the independent witness. An invasive inspection may be called for, whereby the expert will lift and examine the laying methods used by the contractor, including bed depths, sub-base, laying bed, membranes and selected grouting choice, preparing a detailed analysis of the site as inspected. (In the case of a paving project)
(It is common practice, and welcomed by the Courts, to offer the contractor the opportunity to co-commission the expert’s inspection, when the report is prepared as a Joint Single Expert’s Report. Joint, as in two Parties paying 50/50, and Single, as in a single expert)
If the report indicates neglect or poor-quality workmanship, the solicitor reports back to the insurance company for instructions. If it is a Single Expert commission, only the instructing solicitor and the insurance company see the report. On a Single Joint commission, all Parties are copied in to all correspondence.
Assessing the Claim
Having received the report, and assessed the likely outcome of the claim, after taking many factors into consideration, the solicitors make their recommendation to their clients (the insurance company). This assessment is predominantly based on The Likelihood of Recoverability, which means they will look at the potential of recovering monies from the contractor. This assessment will include a number of factors. Does the contractor have current indemnity insurance in place? Does the contractor have premises/property that may be sold to pay any debts? Is the contractor a Limited Company, and if so, what is the value of the company?
If the consensus is that the contractor passes a threshold of 51% – that is to say that there is a more than even chance of succeeding in recovering money from the contractor, the insurance company will proceed with the claim and instruct their solicitors to continue with the process. If less than a 51% chance of winning, they report back to the insurance company informing them of their assessment. They, in turn, report back to the claimant/customer.
Meanwhile, the contractor retains the right to return to site and make good any deficiencies in the original work, and retains all other legal rights under various Laws and other legal recourses including Alternative Dispute Resolution (ADR), Arbitration and Mediation. This article is intended only to outline the likely course of action that may be taken by a customer who holds Legal cover insurance, and may use it at as a first resort instead of seeking other means of resolving any issues of quality and workmanship.
The contractor, if operating in a professional manner, will have other potential resolutions in place, which will influence and reduce the likelihood of legal action by the customer. Full use of Contract (Design Management) Regulations 2015 (CDM Regs) should prevent any such complaint from forming in the first place, with fully detailed and specified Terms & Conditions in place. Using CDM in the manner it is intended, with all Parties being subject to a regulated regime and code of practice greatly reduces any site problems. This protection should also include Indemnity Insurance cover where contracts are of a Design & Build nature.
The stronger the foundation of the works contract in written form, the less chance of any such complaint being unresolved without recourse to litigious action.
Alan Sargent