The Importance of Keeping Good Written Records

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Here at Griffiths and Armour, we are acutely aware that being able to produce clear evidence of the advice given to a client is clearly essential to a good defence when facing allegations of negligence. However, it is also important to have a record of the actions and decisions of other members of the project team, including the client, where they have an impact on your services.

For instance, detailed discussions often take place between designer, contractor and employer during design and site meetings regarding aspects of the design or construction of a project.  Often verbal advice is given at such meetings and decisions are made regarding the development of the design or construction of the project, but the points discussed are not always evidenced in writing and, if they are, are often no more than short-hand bullet points in the meeting minutes.  Without clear written evidence of such discussions, it may prove impossible to rely in Court on an assertion that a particular piece of advice was given, when another party argues strongly that it was not.

It is also worth noting that Courts and arbitrators attach great importance to factual records of meetings, site inspections and telephone conversations, and the accuracy and detail of such records will often be viewed by a Court as reflecting the overall professionalism, experience and integrity of the author.

In this note, we consider very different cases where, on the one hand, the lack of good written records proved detrimental to the defence of a claim and, on the other, an example highlighting how the existence of good written evidence can be of huge benefit to the successful defence of a claim.

Case 1

Ambiguity over the scope of an appointment agreement (and whether it was extended midterm) is created by the absence of written records.

The project in question related to the conversion of a bungalow to make it suitable for habitation by a wheelchair user, left disabled following an accident.  Various problems arose following completion of the conversion. A firm of surveyors were engaged to investigate the defects with a view to assisting the owner, acting via her trustees, to recover from the contractors and/or designers responsible.  Whilst investigating the defects to the property, a further problem was identified with the drains in the bathroom, apparently unconnected to the conversion works. The surveyors offered to arrange for a contractor to visit site and suggest remedial works.  The contractor made his visit and commenced work estimating a cost of £8,000.

The problem arose when he increased his price to £48,000 after encountering unexpected complexities.  Following completion of the drainage work, the trustees alleged that they had no contractual relationship with the contractor and refused to pay for the works. In the event that a Court were to find against them on that argument, they would argue that the surveyors acted either as their agent or as principal in their own right, and therefore should be liable to pay the £40,000 differential.

At the time of writing the contractor is pursuing his fees from the trustees who are threatening to drag the surveyors into any subsequent proceedings.  The surveyors maintain that they did not appoint the contractor, but merely introduced him to the client.  Unfortunately, correspondence between the various parties (when viewed objectively) creates ambiguity
over the actual role of the surveyors. The contractor purports to be under the impression that he was appointed by the surveyors, but this may simply be a tactic adopted by his solicitors in an attempt to drag the firm into the dispute. Legal advice obtained on behalf of the surveyors and their insurers suggests that they were probably acting as agent to the trustees, but may be open to criticism for exceeding their authority.

Case 2

Defence harmed due to an absence of written evidence to substantiate that suitable advice had been given to a claimant.

A firm of architects and contract administrators were appointed in relation to the extension of a cottage.  The owners of the cottage alleged that they had not been provided with a copy of the building contract, nor advised on how to complete the draft form of contract with the result that the contract was never executed. Specifically, they alleged that the architect
had failed to advise them on how to go about completing the contract sections dealing with
liquidated ascertained damages and insurance of the building works.

A fire occurred at the property part way through construction and it was discovered that no insurance had been taken out in respect of the building works destroyed in the fire. The contractor had not insured the works because the draft building contract released to him clearly indicated that insurances were the responsibility of the employer. The architects were
reasonably confident of their position having provided appropriate advice in various areas, but very little of that advice was recorded in writing. The defence therefore relied on the architect’s recollection of oral advice given to the employer at meetings that took place a number of years previously. However, the employers were able to show that they were in fact
out of the country on some of the dates the meetings were alleged to have taken place, causing considerable damage to the credibility of the architect’s defence.  The general lack of documentary evidence meant that this was not a matter which could easily be defended in Court, and this had a consequent effect on subsequent settlement negotiations.

The previous examples make grim reading and highlight how the absence of written evidence to prove or disprove assertions or allegations can seriously damage a consultant’s defence to a professional negligence claim.

Case 3

The final example we wish to highlight in relation to this subject is far more positive and demonstrates how detailed and comprehensive records of a project can be invaluable in fending off a spurious claim.

This particular case relates to the refurbishment and extension of a large hotel. Completion of the project was delayed by about 50 weeks and the cost increased from under £40m to just over £60m.

Following completion, the hotel owner commenced Court proceedings against the construction management company, who it alleged was primarily responsible for the delay and cost overruns.  Our concern lies with the role of the structural engineer appointed for the project.  Although the structural engineer was not directly implicated in the Court case, the construction manager consistently sought to avoid responsibility for the delay by placing blame at the structural engineer’s door.  Various allegations were made, including that delays had arisen as a result of late production of design information and late changes to design drawings.  The structural engineer was given an opportunity to provide the Court with evidence and witness statements explaining the true position.  There was a significant risk that subsequent action would be taken directly against the engineer by either of the parties to the case, should the Court fail to rule out culpability on the engineer’s part.

The project was dogged by problems from the very beginning, most of which stemmed from the failings by the construction manager in the procurement and management strategy for a key phase of the works – the erection of a complex temporary roof structure to protect the exposed building whilst allowing access for the construction of a new, higher, mansard roof.
This element was eventually completed seven months later than planned and had a direct effect on the rest of the project. Later phases of the project were further delayed, again largely as a result of the construction manager’s failure to manage the construction
process properly.

The employees appointed by the construction manager for the project came from a traditional contracting background and were described as having a ‘builder’s mentality’ when it came to managing the project.  This no doubt contributed to problems, and throughout the project the construction manager adopted a highly adversarial stance when dealing with the design team. Progress reports issued by the construction manager consistently claimed that the causes of delay lay with other parties, usually members of the design team. The structural engineer, in particular, was often accused by the construction manager of poor performance and placed under significant pressure to produce design information in accordance to revised deadlines that were totally unachievable.  This tactic was part of a wider strategy to disguise the real source of the delays and the construction manager went to great lengths in order to do so,
providing misleading information to the hotel owner regarding the actual delay occurring and in one case even claimed that certain demolition activities had been completed months before they actually were. It also became clear that ‘logic links’ in the electronic programming software used on the project were tampered with, which had the effect of disguising where the programme’s critical path lay.

Faced with a concerted effort on the part of the construction manager to confuse the programme and the causes of delay, the structural engineer needed to provide a strong case in order to convince the Court of the true position. Key to this was a raft of documentation from the firm’s project files, which provided a detailed and accurate description of the project’s progress and the problems it succumbed to.

Evidence which proved invaluable to the structural engineer’s arguments included the following:

• detailed site progress reports with dated photographs depicting the actual progress of demolition and construction. This documentation helped the Court to determine when work took place on site and where the construction programme’s critical path really lay.

• detailed meeting minutes and records of conversations with the construction manager and other parties to the project. The structural engineer had a policy that requires all such records to be copied to every employee and senior manager within the firm who was connected with the project, so in this way the entire team was kept fully aware of developments.

• dated records of drawings made available to the construction manager including records of times when drawings were reviewed by the construction manager at the structural engineer’s offices.

• letters and other written records providing evidence that the structural engineer continually sought to highlight areas of concern to the construction manager in relation to the sequencing and programming of the works and procurement of specialist trade packages, yet his comments were often ignored.

• evidence in the form of file-notes and letters to the employer and other members of the project team highlighting concerns regarding the construction manager’s poor performance and lack of understanding regarding the critical path. The employer was also warned that the programme revisions issued by the construction manager did not mirror what was taking place on site.

The quality and detail of the structural engineer’s records had great influence on the Judge, who placed significant reliance on them throughout the case. He found the construction manager liable for the damages claimed by the hotel owner and made it clear in his judgement that the structural engineer played no part in causing or contributing to the delays to the project.

There is no doubt that the structural engineer’s records were heavily relied on by the Court and the claimant’s programming expert to determine where the cause of the project’s  problems lay. No other party to the project was able to provide the Court with records as detailed as those of the structural engineer, and there is little doubt that the Court would have struggled to accurately determine the true progress of the project or seen through the construction manager’s attempts to disguise the true picture had those records been incomplete. The resulting ambiguity would certainly have been exploited by the construction manager in order to persuade the Court to place some of the blame with the structural engineer and other parties.