Humber Oil Terminals Trustees Ltd v Harbour and General Works

(Stein) Ltd (1991) CA

© Daniel Atkinson 2000         August 2000

Clause 8(2) of ICE 6^th Edition states that the Contractor is not responsible for the design or specification of the Permanent Works or any part thereof (except as may be expressly provided in the Contract). Clause 8(2) envisages that the Contract may expressly make the Contractor responsible for design or specification of part of the Permanent Works.

The Contractor is not responsible for the design of any part of the Temporary Works which has been designed by the Engineer. This suggests that the Contractor is responsible for the design of all Temporary Works, subject to the exception above. The conditions do not mention the standard for the design of temporary works. However Clause 8(3) states that the Contractor shall take full responsibility for the adequacy stability and safety of all site operations and methods of construction. This would appear to suggest that the contractor carries the risk of the Temporary Works proving inadequate or unsuitable. The courts have experienced some difficulty in establishing the exact ambit of the equivalent of Clause 8(3), particularly when examined in relation to Clause 14 and 12.

In Humber Oil Terminals Trustees Ltd -v- Harbour And General Works (Stein) Ltd (1991) CA the Court of Appeal had to consider the relationship between Clause 8(2) of ICE 5^th Edition (Clause 8(3) under the ICE 6th) and Clause 12. The Contractor had chosen to use jack-up barges to construct the mooring dolphins. Despite successful previous lifts, the jack-up barge became unstable and collapsed during a lift. The Contractor claimed that this was due to unforeseen ground conditions, and claimed under Clause 12. The Employer argued that Clause 8(2) was unqualified, there were no words such as `subject to the provisions of the contract`. There was no room for the operation of Clause 12. The Contractor`s method of working was inadequate unsafe and unstable and the consequences were wholly a matter for the Contractor and nothing to do with the Employer. The Court found that there was inadequacy or instability of site operations or methods of construction within Clause 8(2) of the ICE 5<sup>th</sup> Conditions. The Court would not however construe Clause 8(2) as applying to a case where the inadequacy or instability is brought about by the contractor`s having encountered physical conditions within clause 12(1).

The effect of the decision is that Clause 12 situations cut down the extent of the contractor`s risk for the method of working. It is important for an Employer to take into account this aspect when examining methods of construction proposed at tender stage. If one particular method increases the likelihood of Clause 12 claims, by for instance being more susceptible to variable characteristics of the site, then sensitivity analysis may be necessary to establish the most acceptable bid. It may be necessary to state that the contractor takes on the extra risk due to a particular method of working. It is possible of course to amend ICE 6th so that the Clause 12 risk does not cut down the obligation under Clause 8(3).