Article Business Practice Executive

Engineering, Geology, Geotechnics

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Tags: Engineering geology geotechnics students

University of Portsmouth’s Industrial Alliance in Engineering Geology & Geotechnics starts to show results

The University of Portsmouth is the only institution in the UK to offer an undergraduate degree in Engineering, Geology and Geotechnics. It has been running for over 40 years since its launch in 1967.

The overarching ethos of the degree is to prepare graduates with a good science background for a career in the ground engineering industry. Our students are focussed individuals who have identified this unique degree as a gateway to a satisfying professional career in the civil, mining or offshore sectors.

Up until 2008 the degree was a standard three year full time degree. However, in order to boost numbers and the calibre of students we decided a re-think was in order. In close collaboration with a number of major ground engineering companies we developed a sandwich version of our undergraduate degree with an associated Industrial Bursary Scheme. The scheme offers selected students a bursary of £1,750 per year plus a paid 8 week placement at the end of Level 1 and a paid 44 week placement at the end of Level 2.

The main objectives of this course restructuring are:

  1. To increase the pool of talented employable Engineering Geologists and Geotechnical Engineers in the UK
  2. To attract high quality students with good Science A-levels, Diploma or IB qualifications into the Profession of Engineering Geology and Geotechnical Engineering
  3. To secure a sustainable cohort of high quality students joining the B.Eng in Engineering Geology and Geotechnics (Sandwich) Degree pathway at the University of Portsmouth
  4. To forge strong links between the ground engineering industry and the University of Portsmouth

The sandwich degree and bursary scheme has had the desired effect – our second intake (2010-11) is up by 30% to 30 students, the majority with at least 2 science subjects or equivalent at A-level. The first intake of students onto the sandwich is at present seeking industrial placements for 2011-12.

We currently have seven companies actively involved in providing the bursary which is the main driver for recruitment. Therefore the key to the degree’s continued success and growth is support from Industry by either offering placements or bursaries. Our aim is to increase the number of bursaries on offer so we expand the course with high quality science based students who will feed into the UK ground engineering industry.

The foundation of our degree lies in the geological sciences which are built upon in Level 2 with Units taken in Soil Mechanics, Rock Mechanics, Hydrogeology, Ground Investigation, and Engineering Geology of the UK. In Level 3 these subjects are developed into Units in Rock Engineering, Geotechnical Engineering, Contaminated Land, and Landslides and Slope Stability. Underpinning the degree is an integrated field work program where key skills such as geological & geomorphological mapping, soil & rock description, and rock mass characterisation are developed. Transferable skills such as geotechnical report writing, air photo interpretation, use of geotechnical software packages, and GIS are also embedded into the curriculum.

If you would like to find out more about the degree course or the Industrial Bursary scheme, please contact the Programme Manager Nick Koor: e.nick.koor@port.ac.uk, t. (023) 9284 8484. Details can also be found about the course and Bursary on our web site www.port.ac.uk/sees

Article Safety

The Contractor ’s Problem

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Tags: Avoidance investigation responsibilities

You arrive on site with detailed plans of the buried services.  The electricity and telecommunications can be readily confirmed with your Cable Avoidance Tool (CAT); the route of the gas main, sewer and water main are visually located through pavement scarring and covers. The services are all found to be exactly at the location and depth expected and your drilling is completed without incident.
Oh that it were so simple. On how many sites is the information provided in respect of buried services woefully inadequate? Most often the electricity, water and sewerage plans show the detail in the roads surrounding your site but precious little as to the routing within the site boundary. The power loops to on-site street lighting and the installations for telecommunications are seldom shown on such drawings and remain to be discovered.
In the site investigation industry the biggest risk to the safety of operatives is arguably that of striking buried services and unlike many theoretical or perceived risks this is real. A JCB rarely loses an argument with a buried pipe or cable and the implications of ripping through a gas main and electricity supply together are only too obvious.
Clause 11 of the CDM regulations 2007 sets out clearly the duties of designers, particularly in taking “all reasonable steps to provide with his design sufficient information…”. This begs the question as to whether sufficient attention is being given to acquiring detailed and accurate services information prior to breaking ground. In most developments it would appear that gathering this information is of low priority and reliance is placed on the site crew to dig a 1.2 m deep inspection pit.

Detailed information concerning buried services is obviously going to be required at some stage in the project. The key point, therefore, becomes when rather than if the information is to be obtained. A number of commercial providers will obtain all of the services information relatively rapidly and relatively economically. Going back to responsibilities under CDM; is gathering this information in advance of breaking ground a ‘reasonable step’?

Well yes, responsible designers should be advising their clients that detailed current services information should be acquired at the very earliest opportunity. It must be seen as an equally important and “routine” activity as a topographic survey of a site and will be of benefit to all parties as the design progresses. Crucially, however it contributes significantly to reducing the risk of injury to the ground investigation contractor.

Surely it would be better for all parties if the ideal set out in the first paragraph applied to all sites.

Martin Cooper
Principal Geotechnical Engineer
Geotechnical and Environmental Associates Limited

Article Safety

The Consultant’s Problem

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Tags: investigation Pre-Construction risk

There is still a perception within the industry, and sadly, this includes some CDM-Co-ordinators (CDM-C), that it is not necessary to appoint a CDM-C or provide Pre-Construction Information (PCI) for the site investigation stage of a project.  Therefore, when we as Consultants/ Designers are appointed we are already on the back foot.  Experience tells of precious time on a project often lost while Designers/ Consultants try to persuade stakeholders, including CDM-C’s, that (intrusive) ground investigation works are considered “Construction works” and therefore the relevant CDM regulations apply.  Unfortunately, this is not being helped by the current aggressive nature of the market where it seems that some Consultants and Consultant/ Contractors will take on projects at the site/ ground investigation stage without the required CDM-C appointment and Pre-Construction Information to give them the edge on the competition.
The time taken to obtain full service records for a site (a key part of the PCI), before the design of ground investigation work can take place, can affect the progress of a project in both increased fees and programme.  Yes, there are “one-stop-shop” companies who will obtain the buried services information for a site, and yes they offer accelerated turn-around times for such services.  However, in the majority of cases the full service returns will not be received within 4 weeks.  Once received, the plans vary in scale, content, style and are rarely drawn accurately to scale.   Due to this the Designer is left with information which cannot be totally relied upon when designing the intrusive phase of ground investigation works (i.e. selecting that all important exploratory hole position).
Therefore, since “Every designer shall in preparing or modifying a design which may be used in construction work in Great Britain avoid foreseeable risks to the health and safety of any person…”, we advise the Stakeholders that either in advance of, or during the intrusive ground investigation site operations, further hazard elimination and management procedures be implemented.  Clearly, within the congested underground of the United Kingdom, buried services are a “foreseeable risk…”.   “Reasonably practicable” measures in order that we, as Designers, can either design out (manage) or eliminate such a risk, can include, but not be limited to:

  • Positive identification by utility companies.
  • Utility and service mapping services.
  • Vacuum excavation.

However, such measures have programme implications and additional costs which can often make them hard to incorporate in the project budget, despite the potential savings to the project that these hazard elimination and management measures can provide in reducing “risks to the health and safety of any person”, as well as the risk of significant cost and programme delays which can be incurred when buried services are struck.
Therefore, the biggest hurdle, facing the “competent” consultant/ designer is to convince the stakeholders that the consequence of encountering a buried service, either at intrusive ground investigation stage or main construction work stage, is worth the additional early cost.  As discussed earlier, this is currently against a backdrop of an increasingly competitive market place where consultants/ designers can be found who are willing to work with a higher risk and perhaps be less open with the Client as to the levels of risk the project is being exposed to.
Highlighting the consequence of the unexpected or accidental conflict/ encounter of buried services in any stage of a project should not only be within the health and safety risk assessments for activities on a project but also the Project Risk Register.  Once the consequences are clearly outlined to Stakeholders they should be more than aware of the importance of managing or mitigating the possibility of such an encounter.  There should be greater cross stakeholder collaboration, which should include the Principal Contractor, Contractor and Designer in addition to the Clients or Consultants, in the compilation of a comprehensive Project Risk Register.
There, must be joint agreement between both consultants and contractors as to the “reasonably practicable” means for eliminating or managing the risks associated with buried services.  As a result both consultants and contractors should agree not to proceed with projects until such “reasonably practicable” measures are implemented.  After all, within the CDM 2007 regulations all persons with a duty under the Regulations (including the Client) are to ensure that “the construction work can be carried out so far as is reasonably practicable without risk to the health and safety of any person;”

Article Loss Prevention

Insurance Claim Refusals

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Tags: Adjusters Assessors insurance

Tim White of Marquis & Lord, reports on the findings of recent consultations with insurance claims professionals.

A recent straw poll of Loss Adjusters (who work for insurance companies) and Loss Assessors (who work for claimants) has shown that there is an increase in claims being refused because of policy non-conformance.

Key examples, pertinent to the AGS businesses, relate to site and plant security where vandalism or thefts result from poor security.  In addition, lock types that do not conform to insurance policy requirements are also causing claims to be refused.

This has implications for the industry in many areas but particularly if vandalism results in loss of material giving rise to pollution, where the clean up costs can have far reaching consequences.  Refusal of a claim which would have been covered as a legitimate sudden and un-intended escape may be refused if the causal step involved non compliance with policy demands relative to site or plant security.

The solution is simple:

  • check policy wording to determine if lock types or minimum security measures are specified;
  • if minimum requirements are specified, check to see if the company complies with them; and
  • if possible, go a step further than the minimum requirements.

The moral of the story is, do not get caught out because of a low cost lock.

Article Business Practice Data Management

Environmental Permitting (England and Wales) Regulations 2010

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Tags: environmental Permitting regulatory

DEFRA announced that the Environmental Permitting (England and Wales) Regulations 2010 came into force on April 6th 2010. Water discharge consenting, groundwater authorisation and radioactive substances regulation are now part of the single environmental permitting system which helps to deliver cuts in unnecessary red tape whilst continuing to protect the environment and human health.

The Environment Agency’s Environmental Permitting web pages (www.environment-agency.gov.uk)  and Netregs website (www.netregs.gov.uk) provides detailed advice on the new procedures and offers links to new application forms, regulatory guidance and standard permit rules.

Government guidance is also available from the DEFRA website. The guidance includes additional Environmental Permitting guidance on Statutory Nuisance and several other updated documents.

Article Business Practice Data Management

CSCS Cards – Explained!

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Tags: Accreditation CSCS professional qualification

There are four types of red cards which are new or recent entrants to the construction industry  for  experienced workers whose occupation has been closed for industry Accreditation and are working towards a NVQ (National Vocational Qualification) or SVQ (Scottish Vocational Qualification).

RED CARD- TRAINEE (craft and operative)
You will qualify for this card if you are a trainee, and registered for an NVQ or SVQ (or Construction Award) but have not yet achieved level 2 or 3 and have met current CSCS Health and Safety requirements.

Trainees must have passed the health and safety test and the card is valid for three years. The card can be renewed for a further three years on application.

RED CARD-GRADUATE (Technical, Supervisory and Management)
You will qualify for this card if your have completed a nationally recognised construction related qualification with a further/higher education college or university. You will be required to complete the Managerial and Professional (known as MAP) Health and Safety Test.

The Graduate card is valid for three years and can be renewed for three years on application.

RED CARD- EXPERIENCED TECHNICAN, SUPERVISOR OR MANAGER (Technical, Supervisory and Management)
This card is available to Supervisors and Managers with on the job experience (normally at least one year within the last three), but missed the industry accreditation opportunity and do not hold and NVQ or SVQ level 3,4 or 5 or a Member of an approved Professional Body. To qualify for this card you need to-

  • Check to see if your role is covered by CSCS
  • Pass the health and safety test
  • Register for an NVQ or SVQ
  • Complete and NVQ or SVQ profiling session

The card is valid for three years and is non renewable. The card is only issued on a temporary basis, while an NVQ/SVQ is being achieved. It is expected to be replaced by a skilled five year card on achievement of NQV/SVQ level 3 or higher.

RED CARD-EXPERIENCED WORKER
This card is available to everyone with on the job experience (normally at least one year within the last three), but missed the industry accreditation opportunity.
To qualify for this card you need to-

  • Check to see if your trade is covered by CSCS
  • Pass the health and safety test

This card is valid for one year and is non renewable.
This card is issued on a temporary basis, while an NVQ/SVQ is being achieved. It is expected to be replaced by a skilled five year card on achievement of NVQ/SVQ level 2 or higher.

An Experienced Worker Card can not be replaced by a Construction Site Operative (CRO) or a basic skills green card.

WHITE/YELLOW- PROFESSIONALLY QUALIFIED PERSON (PQP) CARD
The white/yellow PQP card is for competent assessed members of CSCS approved professional bodies such as (ICE, CIOB, RICS). The scope of the PQP card has recently been redefined after a lengthy consultation with the professional bodies and no longer has a time spent on site restriction placed on it. To apply for the PQP card you must-

  • Be a competent assessed Member of an approved institution
  • Pass the Managerial and Professional (MAP) Construction Skills health and safety test

These cards are valid for five years and can be renewed on re-verification of the PQP criteria.

WHITE/GREY- CONSTRUCTION RELATED OCCUPATION (CRO) CARD
This card covers construction related occupations not covered by the other categories of card and shows the holder’s occupation.

A CRO card is valid for five years and to renew it applicants must retake and pass the Construction Skills health and safety test.

Article Business Practice Data Management

The Importance of Keeping Good Written Records

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Tags: documentary integrity record

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.

Article Business Practice Data Management Loss Prevention

Retention of documents – how long is long enough?

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Tags: documentation insurance liability storage

Introduction

How long is a piece of string?  Tricky.  Twice the length from one end to the middle, you say?  Well, yes, but still not very helpful in determining how long the string actually is, is it?  We can do slightly better with the question as to how long a business should retain its professional appointment documents; but a definitive answer is almost as elusive.

Firstly, it should be emphasised that this note deals with general considerations relating to professional appointment documents only.  For the myriad of other documentation and regulatory intervention that today’s firms need to be aware of, for example, in the fields of financial and accounting information, personal information and when dealing with public bodies, specialist advice should be sought.

With the increasing sophistication of computer storage systems, it is now possible to store many hundreds of thousands of documents relatively cheaply.  With the drop in price of file servers and the associated backup hardware, digitising newly produced documentation is a real possibility for many.  Many practices may never need consider purging documents; they simply digitise newly produced documentation as it is created.  Nevertheless, for those of us with many years of old paper files to consider, the cost and time implications of digitising these can be a drain on resources.

As arrangers of Professional Indemnity (PI) insurance to various professions, the document retention question is one which we are often asked.  If it is one you have already grappled with, then hopefully, this paper will do nothing more than reinforce the advice already given.  Alternatively, if it’s something you have never considered, now might be the time to do so.  With many practices struggling with burgeoning documentation, deciding when it is finally safe to destroy files is of increasing importance.

Document retention

Be it schematics for the construction of a building, advice issued to clients on a negligence claim, or papers supporting the valuation of a house, documents are produced which are vital to the service that is provided.  Indeed, the documents produced might be the very service itself.  Storage space is finite for all businesses – everything cannot be stored indefinitely.  The danger with destroying document early, however, is readily apparent.

Document retention

Although general guidance can never address the specifics of individual situations, and we always recommend that you take specific advice, the following areas should definitely frame the debate:

  1. PI policy requirements
  2. Contractual requirements and liability periods
  3. Other factors

Professional Indemnity policy requirements

We suggest the first port of call in trying to answer this question is to look at the terms of your PI policy.  Different insurers have different requirements ranging from remaining silent on the issue, to imposing quite onerous terms as to both how long you must store your documents and in what state they must be retained.  The reasons for insurers taking an interest in how you keep your documents are obvious; in the event of an allegation of negligence, the notes you have taken, the minutes of meetings held and the written advice given, will all be crucial to mounting a defence.

Griffiths & Armour’s PI insurance schemes for construction professionals have no particular requirements relating to the retention or storage of documents and you are at liberty to make whatever arrangements you consider commercially prudent.  It would be extremely foolish, however, to ignore the issue.  As previously mentioned, project documents can be crucial in mounting a defence and as our latest risk management book ’Reinforcing the Simple Messages’ shows, a claim can fail or succeed on the accuracy and/or sufficiency of project records.

Other PI policies, however, can contain fairly demanding requirements, such as:

 

‘The Insured, as a condition precedent to their right to be indemnified under the Policy, must keep all documents in a suitable secure location outside of normal business hours and shall maintain duplicates of all computer related records off site for a period of not less than 12 years following completion of the commission to which the documents relate.’
‘The Insured shall make available to Insurers at all reasonable times and Insurers shall have a right to inspect and copy during the period of insurance and thereafter, all books, papers and other records of the Insured and its agents or brokers in connection with this policy or the subject matter hereof.’

 

 

 

 

 

 

It is important that you check with your broker exactly what conditions apply to your particular policy, so as to ensure that you can comply.  Often, retaining the documents for the period and in the manner specified in the policy will be a ’condition precedent of cover’ (i.e. if you don’t comply, the policy will not respond to the claim).  Even conditions at the less onerous end of the spectrum can allow insurers to reject claims, should they consider your actions ‘prejudice their position’.

Contractual requirements and liability periods

Quite aside from the conditions within your PI policy, your client may well require that you retain documents on a particular project for a specified number of years.  Although it is unusual for clients to specify the manner in which the documents are kept, the requirement to store project documentation for ‘x years’ will often be combined with a right for the client to inspect the documents too.

The document retention period imposed by clients in contract often matches the relevant limitation period applicable to the project in question (i.e. the period after which claims become ‘time barred’).  Knowing when your liability expires is essential when considering how long to retain your documents, even if the contract is silent on the matter.  Usually, the liability period will expire a number of years following completion of the services you are providing or completion of the project to which they relate.  The limitation period is usually six or twelve years depending on the form of contract and what you have agreed with your client.

In certain circumstances, where so-called latent defects are present, the law can impose liability up to 15 years following completion of your services and this, for most categories of claim you are likely to face, should be considered the ‘long-stop’ of liability.  It follows that, generally, speaking this can also be used as the ’long-stop’ for retaining documents

Other factors

Many more issues may well impact upon your decision as to whether or not to retain documents and, if so, for how long.

Some clients view historical records as a potential revenue stream. They view them as a useful tool in securing work in the future from, for example, clients refurbishing a building an engineer had previously worked on.

Special consideration should be given to certain categories of documents, for example, the certain financial documents (for example, balance sheets etc) as there may well be specific legislation (e.g. the Companies Act) which deals with how long these should be kept and specialist advice should be sought in this regard.

Article Business Practice Data Management

Builders Profile

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Tags: Builders database NSCC specialist

Is Builders Profile the answer to Pre-Qualification Questionnaires?

When Members of the National Specialist Contractors Council (NSCC) complained about the number and length of pre-qualification questionnaires, the NSCC Director, Susannah Nichol, set off on a quest to find a solution.

CDM requires the employment of competent contractors.  Good management and robust risk management requires the employment of competent professionals and contractors. Clearly, therefore, abandoning prequalification is not an option and the only viable way forward is to find a way of making the system work.

The solution that Suzannah came up with was ‘Builders Profile’.  The name is unfortunate – but civil engineering professionals and contractors should try to overcome their antipathy and consider whether this is a system that could work.

What is Builders Profile?

An online system of providing pre-qualification information.  Builders Profile have compiled a questionnaire that covers all common PQQ information.  This is stored in a secure online database.  Fill it in once, and the data is there for release to potential clients.  Furthermore, there are checks in place to ensure that the data remains up to date and automatic prompts are sent out when critical information such as insurance details are due for renewal.

How does it work and what does it cost?

Once the information is stored, the Member can send their pre-qualification information simply by creating a Profile for each client and ‘submitting’ it.  This can be done without cost.

For an annual payment of £275 a specialist can become a Premium Member of Builders Profile.  This enables them to create and store a single Profile so that it can be sent to several enquirers at once, via an email link, with no setup requirements or additional costs.  If the main contractor or client in question is already a user of Builders Profile, the details are already available to him without needing to take any action at all.

Why should a client/main contractor accept information from Builders Profile?

Prequalification is also a problem for clients/main contractors.  Once a client creates a Builders Profile Main Contractor Account they can immediately see the ‘headline details’ of every subcontractor using the service, and can use the online search to refine what they want to see.  Once confirmed as a bona fide ‘main contractor’, they can access the full service functionality and request new profiles, or updated profiles. At the click of a mouse they can see the full Profiles of all Premium Members who have authorised them to see their details, along with all Basic Members who have specifically submitted their Profile to the contractor, plus the headline information about every other company who is using the Builder’s Profile service.  Membership is free.

What should a specialist contractor do when a paper PQQ is received?

If a paper PQQ arrives on a specialist contractor’s desk from a company that is not using the Builder’s Profile, the specialist should resist filling it out.  Instead, log onto the Builder’s profile and send an automated email to the contractor containing a link to your Profile.

Will it work?

The NSCC has over 30,000 Members who are all being encouraged to sign up.  Additionally, NSCC and Builder’s Profile are actively pursing main contractors, in particular, to convince them of the advantages.

It won’t solve all the problems today.  Some contracts are just too valuable  – if you are asking ‘how high?’ when the enquirer says ‘jump!’ this is probably not the right time to mention Builder’s Profile.  But for the rest – give it a go!   The £275 annual fee won’t break the bank. It will save several hours of form filling today and it could save you a full-time salary tomorrow.

It’s chicken and egg – clients won’t use it until there are sufficient specialist contractors signed up.  Specialist contractors won’t sign up unless they think there will be potential employers wanting to use it.  But once the band wagon starts to roll – the momentum could drive away the waste of time, effort and money that current PQQ represents and usher in a greener, cheaper, more timely, online equivalent to replace it.

www.buildersprofile.co.uk

Article Contaminated Land Loss Prevention

The Big Question

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Tags: Environment waste

Q&A:  Liabilities of The Qualified Person Arising from Definition of Waste:

Development Industry Code of Practice

Introduction
The Definition of Waste: Development Industry Code of Practice was published by CL:aire in 2008 (www.Claire.co.uk).  It was prepared by the development and remediation industry in consultation with the Environment Agency.  The Code of Practice (CoP) was designed to allow the development industry to demonstrate that wastes (derived from/ during remediation etc) have been “fully recovered” and therefore are no longer “waste”.  This self regulation relies upon the professional integrity of all of the parties involved, but particularly upon the “Qualified Person” – a term which the CoP introduces.  The CoP requires the Qualified Person to sign off a Declaration that all of the appropriate lines of evidence are in place to demonstrate compliance with / adherence to the Code.
Concerns have been raised by some in the industry that the Qualified Person could face potential liabilities in signing off the Declaration which are not compensated by the level of fee – for example, in the event of subsequent activities by third parties.

The response from the Loss Prevention Group’s legal advisor (Zita Mansi) to two of the most commonly raised concerns is set out below.

The Qualified Person’s Declaration

The CoP sets out an auditable system to demonstrate that the CoP has been adhered to on a site by site basis.  This system includes a Declaration by a Qualified Person (“QP”).  The Environment Agency (“EA”) will audit a certain number of Declarations at random, to check that the CoP is not being abused.

The QP’s Declaration (which is set out in full at Appendix 6 of the CoP) includes confirmation:

  1. That he/she has reviewed the relevant documents set out in the checklist (these include the Materials Management Plan (“MMP”), the Risk Assessment and the Remediation Strategy/Design Statement);
  2. The MMP contains all the information required by Appendix 4 of the CoP;
  3. The Risk Assessment concludes that the objectives of preventing harm to human health and pollution of the environment will be met if materials are used in the proposed manner; and
  4. the relevant regulatory bodies have not objected to the proposed development on the basis that the use of any material is likely to cause harm.

The Declaration is addressed to the person commissioning the works (likely to be the person employing the QP) but must be sent to the EA.

Q&A

Questions have been raised by an AGS member regarding the potential liabilities of the QP to his/her client and/or to the EA in the following scenarios:

  1. The QP provides a Declaration and subsequently the MMP is not followed by those carrying out the works.
    Paragraph 3.17 provides that the responsibility of the QP is limited to review of the documentation detailed in the Declaration.  Responsibility for carrying out the development in an appropriate manner, and the duties pursuant to waste legislation, remain with the person commissioning the excavation works and those executing the works.

    After providing his/her Declaration, the QP has no further involvement in the project and has no inspection, monitoring or auditing duties.  Hence he/she has no control over whether or not the MMP is adhered to and cannot be held responsible for any adverse consequences of the works deviating from it.

    Paragraph 3.12 of the CoP allows deviations from the original MMP provided they are recorded and subsequently detailed in the Verification Report.  The QP has no involvement in or responsibility for the Verification Report.

  2. The QP provides a Declaration and subsequently the EA audits the project and decides that the MMP and Risk Assessment are inadequate or inappropriate because, for example, the materials were not suitable for re-use, were used or planned to be used in excessive quantities, or were likely to cause harm.
    Paragraphs 3.17 and 3.18 of the CoP suggest that the QP’s role is limited to “review” of the documentation detailed in the Declaration.  Paragraph 3.18 of the CoP states that the QP is not required to re-work or check the Risk Assessment or Remediation Strategy/Design Statement.  The precise nature of the QP’s obligations when “reviewing” the documentation is not entirely clear.  The wording of the Declaration (as set out above) is key.  The QP confirms that the MMP contains all the information required by Appendix 4 of the CoP but this is not the same as confirming that the information is correct.  In addition, the Declaration includes a statement that the QP has advised the person commissioning the works that if materials are not used in accordance with the MMP or Risk Assessment or if it is discovered that materials were not suitable for use, were used in excessive quantity or in such a manner as to harm human health or pollute the environment, the EA may conclude that those materials were discarded and were waste.  This appears to place responsibility for these matters upon the person commissioning the works, which is consistent with the wording of the CoP.

    In any event, the question of whether a particular material is waste is ultimately a decision for the Courts and the fact that the EA do not agree with the conclusions of the Risk Assessment and MMP does not necessarily mean that those documents have been negligently prepared or that the QP was negligent for providing the Declaration.  (Paragraph 3.17 of the CoP provides that a QP who “recklessly” or “falsely” completes a Declaration may be subject to prosecution under waste legislation, but this requires more than mere negligence on the part of the QP.)

    If, for any reason, the QP is held to have been negligent, he may be liable to his client for any losses that result from the client’s reliance on the Declaration.  The extent of the QP’s liability to the client will ultimately be governed by the terms of his/her appointment.  The QP should therefore ensure that none of the terms of the appointment place him/her under any higher obligation than to use reasonable skill and care in carrying out his/her duties under the CoP (he/she should not, for example, warrant that the Declaration will satisfy the EA) and it should be made clear in the appointment that he/she is not responsible for the information provided to him/her or liable for defects in it.

Article Business Practice Data Management Loss Prevention

Markets for Professional Indemnity insurance – the not so ‘super market’

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Tags: insurance

The aim of this paper is to summarise the workings of the UK Professional Indemnity insurance market and the hard/soft cycle that has such an influential effect on premium levels. We will also attempt to predict what the future might hold as the market moves inexorably out of its soft phase and into harder times.

Insurance Markets
Most specialist insurance classes – including Professional Indemnity (PI) – are placed either with Lloyd’s syndicates or with insurance companies operating outside the Lloyd’s environment.

The UK general insurance market as a whole wrote in excess of £40 billion in premium during 2008 covering a wide range of risks, both domestically and internationally. However, the PI market is very much niche in its nature – but just how niche? UK liability premiums for 2007 totalled £3.8 billion, but this included a number of classes of insurance wide of PI, such as Public and Employers’ liability. We estimate that, of the £3.8 billion total, less than £1 billion relates solely to PI insurance. Of this, the largest element is the PI market for solicitors which accounts for around a third of this.

The construction PI sector is thought to represent a smaller proportion of the total premium although exact figures are not available. However, what is clear is that construction PI represents a very small proportion, less than 0.5%, of the UK’s overall premium spend.

Consequently, as specialist PI brokers, the sector of the insurance market with which we work is, necessarily, very narrow.

The Claims Background

Our statistics show that the number of claims and potential claims are increasing year on year – and this trend is also borne out by figures from the Technology and Construction Court. 2008 saw nearly 400 new cases reaching the court, on top of year on year increases previously.  Nearly half of the Court’s work now relates to construction and professional negligence claims. We should also remember that the vast majority of claims involving professionals are settled out of court – court cases are really just the tip of the iceberg.

Of equal concern to the increasing claims numbers are their increasing complexity, profile and cost.  The longest trial at the TCC last year ran for 109 days and claims have been made for damages of £100m plus against consultants.

Against the back-drop of increasing claim numbers, severity and cost, writing PI business is once again becoming a triumph of hope over expectation.

Premiums Received and Claims Paid
For long-tail classes of insurance such as PI, it is often the case that premiums received are not, of themselves, sufficient to pay claims. Investment income becomes a critical part of the equation particularly when, even now, construction PI claims take an average of five years to reach settlement.

Data from the ABI illustrates just how infrequently insurers make a technical or ‘pure’ underwriting profit on their accounts – only in 4 out of the last 10 years have they been in the black.  It is also notable that very often it is the liability insurance market that suffers so significantly from poor levels of profitability

The PI Cycle
The insurance cycle – which affects all sectors to varying degrees at differing times – is the name given to the periodic rise and fall of relative premium levels. As with all markets, the insurance cycle is driven as much by the effects of supply and demand as by the underlying cost of risk.

Catastrophic insurance claims are relatively rare events, but given their size they can make accurate pricing models difficult – too frequent to ignore, too infrequent to model. As large claims are also likely to be complex and involve the vagaries of the legal system, their outcomes are often difficult to interpret.

As a consequence, the forces of supply and demand are often the dominant factors in setting premium levels. Insurers may be prepared to set premium levels below the price of risk in the soft phase against an expectation of generating sufficient income in the hard market to have created an overall profit across the cycle.

However, where individual insurers price risk too low and for too long the consequences can be catastrophic – as we will see later.

In summary, the PI cycle is best seen as something like this:-

If we start in “hard market conditions” with high premiums and the real prospect of good rates of return on the capital invested”, capital enters the insurance market.  New entrants to the market look to build up books of business and do so by competing on price. In order to sustain growth (or for more established players to limit lost business) insurers are pressurised to further reduce premiums and/or provide a wider basis of cover.

However, none of this, of course, necessarily reflects any improvement in the underlying risk profile. It is market forces that are driving down premium levels and not necessarily a reduced exposure to claims. Claims still tend to be at the same levels as when premiums were high. As a consequence, claims exceed premiums and insurers start to lose money. Poor economic conditions and reduced investment returns can exacerbate the position.

At this stage we see the mirror image of the cycle. The PI market is now perceived as a poor home for capital and it withdraws relatively quickly to find better investments elsewhere. Reduced capacity (normally provided at this stage by long-term, experienced PI insurers) results in higher prices and reduced policy terms – and so the cycle begins again.

And the Consequences…
Insurers who fail to adequately manage pricing over the insurance cycle – by charging too little for too long – can face catastrophic consequences, as the following two examples indicate.

[a] Case Study – The Independent Collapse
The Independent Insurance Company was founded in 1986 and traded successfully for several years and quickly became the darling of the City. However, all was not well and a failure to adequately reserve for claims led to the Independent’s collapse in 2001 triggering £350m of compensation claims by some half a million policyholders. A subsequent investigation by the Financial Services Authority concluded that the company’s asset base was insufficient to support its business plans.

[b] Case Study – HIH Collapse
The collapse of HIH during 2001 saw the demise of Australia’s second largest insurer. The fundamental problem for HIH was that over a wide range of classes of insurance it failed to charge premiums which could adequately cater for future claims. HIH’s liquidators estimate that it collapsed with debts of £2.1 billion. Company executives have been sentenced to prison terms and thousands of insureds worldwide were affected.

Where are we now – and the future?
The PI market is coming off the back of a prolonged soft market period, which saw many insurers put volume ahead of profit.

And what of the future? It is certain that at some stage the market will enter harder conditions. There is uncertainty as to when the market might harden and by how much. Invariably the deeper and more prolonged the soft market the more pronounced the adjustment will be when it comes.

If the solicitors market is anything to go by, then we could be in for a rough time ahead.  With every solicitors practice in the country sharing a common renewal date, the scramble to the 31st October (is it??) is always fraught.  This year has been particularly so.  Rating increases of between 50 – 100% have not been uncommon, with all practices suffering to some degree.  Even those practices as the “less risky” end of the spectrum have seen their rate increase substantially.  Where insurers have perceived particular risk factors, even more so, with certain firms being effectively blackballed because of certain practice traits.

Events in insurance, as in life, are powerful and unpredictable. What future events might conspire, individually or collectively, to prompt a return to harder market conditions? The following is a list, by no means exhaustive, of the likely culprits:-

The Credit Crunch
The credit crunch had had (and will continue to have) three adverse effects on the insurance market. First, the cost of capital has increased as its availability becomes scarce. Second, a reduction in the asset base of major insurers as investment losses erode balance sheets – further reducing the capital available to underwrite risks. Third, an increase in credit crunch liability claims as those who have suffered losses (home owners, shareholders etc.) seek to recover from professional advisors, company directors etc.

Investment Income
A combination of increased stock market volatility and reduced interest rates is severely curtailing insurer’s ability to generate investment income.

Environmental Factors
After two relatively benign years of (insured) natural catastrophes, 2008 saw the second worst year on record for catastrophe claims with in excess of $50bn (£35bn) paid out.

Economic Factors
A downturn in the economy hits the insurance industry in two ways: (1) recessions invariably lead to an increase in claims; (2) the contraction in economic activity leads to a reduction in premium income leaving insurers with a reducing pool of money to pay claims.

Our Approach
Our approach will continue by:

a) placing cover with first class markets who are long term players in the construction PI market;
b) looking to charge premiums which reflect the long term cost of risk without prejudicing the position of our clients in the soft market; and
c) offering the guarantee that, absent fraud, all valid claims made will be paid.

And our commitment to proactive risk management will also continue unabated.

And Finally
There is no doubt that some sectors of the liability insurance market have seen severe corrections.  How long consultants in the engineering professions can continue to escape such corrections and how severe they will be when they come is always difficult to predict.  There is no doubt that we have hit the bottom of the current soft market and that next year will see rates on the way up.  As ever, forewarned is, or should be, forearmed.

Article Laboratories

Geophysics and the Search for Homer’s Ithaca

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Tags: geologist geophysical

An extract from the paper presented at SAGEEP 2009
Greg Hodges, Fugro Airborne Surveys, Mississauga, CA
David Kilcoyne, Fugro-Aperio, Wallingford, U.K.
Rod Eddies, Fugro-Aperio, Wallingford, U.K.
John R. Underhill, University of Edinburgh, Scotland, UK”

Ithaki, Cephalonia and PalikiIdentifying the location of the island of Ithaca, legendary home of Odysseus, has been a problem for historians for centuries.  The modern island of Ithaki, in the Ionian Sea, does not match the description in Homer’s epic poem.  It is the hypothesis of Robert Bittlestone, working with geologist John Underhill and classicist James Diggle, that the westernmost part of Cephalonia, the Paliki peninsula, was ancient Ithaca.  Their book, Odysseus Unbound: The Search for Homer’s Ithaca, gives a detailed description of the evidence supporting the hypothesis, and the story of its development.  There is one major sticking point:  Paliki is joined to the larger part of the island of Cephalonia, by an isthmus as much as 180m above sea-level.    Figure 1 shows a Landsat 7 image of the islands today, and the Thinia valley fills the isthmus between Paliki and the rest of Cephalonia.  The new hypothesis requires a channel through the isthmus, perhaps in the location shown in Figure 2.

 

Thinia valley with possible channel route.Ground, airborne and marine geophysical surveys are being used to study the potential for a channel under an area now largely covered by colluvium from the adjacent mountains.  Fugro’s airborne EM and magnetic data provide a regional overview of ground conductivity (Figure 3).  Ground EM, resistivity, gravity and refraction seismic surveys obtained by Fugro Aperio are being used to study the proposed channel zone in detail to determine the depth of fill and contours of the buried bedrock surface.  Marine seismic has been employed offshore by Fugro Oceansismica to analyze the drainage patterns at the low water levels of 3000 years ago.  High resolution airborne LIDAR mapping from Fugro’s Fli-Map provides detailed surficial information. All of these data sets are brought together to build a comprehensive geological model of the proposed channel area and to provide the ultimate test of the classical enigma.

 

Airborne Apparent Resistivity map (40kHz) on topography

 

(The full paper was presented at the EAGE Near Surface meeting in Dublin – 26th to28th September 2009, for further information contact Steve Poulter, Fugro Engineering Services Ltd 0870 4021423).