Negligence Project Manager In Construction Industry

CHAPTER 2

LITERATURE REVIEW

2.1 Negligence of project manager in construction industry

Construction industry is one of the contributors to economic development of the country. It is consists of many parties involved having different background and expertise in projects. Project manager as a leader of the project plays important role in managing project. However, as a human being, people could not run away from make a mistake or negligence in performing a task or responsible. Negligence of project manager would be discussed in giving the best performance of project manager by learning the past mistake.

2.2 Definition of negligence

Negligence done by project manager is where project manager does not carry out duty of care to other parties and as a result, the other parties suffer losses, damages and others because of that negligence. Negligence also can be determined as misconduct (or malpractice) of professionals fail in carrying out their tasks efficiently.

As referred to MC Nair Judges in Bolam v. Friern Hospital Management Committee, negligence in law means a failure to do some act which a reasonable man in the circumstances would do, or the doing of some act which a reasonable man in the circumstances would not do; and if that failure or the doing of that act results in injury, then there is a cause of action.

Willick (1986) stated that “Malpractice” is an application of negligence law by which liability is usually imposed, not when professionals fail to achieve certain results, but when they fail to exercise “due diligence” and “reasonable care” in their practices.

Hingun M. and Wan Azlan Ahmad (1998) stated that the word negligence can be used in three principal senses which are:

1. First, it could refer to a person’s mental element, his negligence as to the possible effects of his conduct

2. Secondly, it may refer to the quality of a person’s conduct that he is negligent in doing something such as crossing the road or driving his car, or in failing to do something such as to accompany his small child in a place that may turn out to have objects that could cause injury to that child. In this sense the word negligence indicates the standard or quality of the conduct.

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3. Thirdly, the word refers to a branch of tort law which imposes a certain standard of care on people in certain circumstances: this means that they are under an obligation not to conduct themselves below the standard, and if they do, they are liable in law to compensate the person who has suffered as a consequence of their careless act.

As what been stated in the case Donoghue v Stevenson [1932], ‘Not every careless act or fault on the part of a professional gives rise to liability in negligence, even where damage is sustained by another as a result.’

Negligence also can be defined as the failure to use reasonable care. It also could be the doing of something which a reasonably prudent person would not do, or the failure to do something which a reasonably prudent person would do under like circumstances1.

Negligence is a ‘legal cause’ of damage if it directly and in natural and continuous sequence produces or contributes substantially to producing such damage, so it can reasonably be said that if not for the negligence, the loss, injury or damage would not have occurred. Negligence is also might be a legal cause of damage even though it operates in combination with the act of another, a natural cause, or some other cause if the other cause occurs at the same time as the negligence and if the negligence contributes substantially to producing such damage.2

Furthermore, generally a party who has caused an injury or loss to another in consequence of his negligence is responsible for all the consequences. An example of this may be found in the case of a person who drives a car during a dark night on the wrong side of the road and injures another.3

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1 http://www.lectlaw.com

Aaron Larson (2003) stated that in general terms, negligence is “the failure to use ordinary care” through either an act or omission. That is, negligence occurs when:

• Somebody does not exercise the amount of care that a reasonably careful person would use under the circumstances; or
• Somebody does something that a reasonably careful person would not do under the circumstances.4

Negligence is often defined as consisting of a breach of duty. That is wrong. The duty in such a case can be defined only as a duty to use care, i.e., not to act negligently; and to define the duty so, and then to define negligence as consisting of a breach of the duty, is to define in a circle. The misconception has arisen from a failure to distinguish between a negligent wrong, which, like all wrongs, involves a breach of duty, and the negligence itself, which is one element in the wrong.5

4 http://www.expertlaw.com/library/personal_injury/negligence.html

5 29 Harv. L. Rev. 40 (1915-1916) Negligence; Terry, Henry T.

2.3 Element of Liability

As a project manager, he or she responsible in managing project successfully and have liability towards the project. Liability of project manager such as planning, leading, controlling, organizing, co-coordinating available resources (i.e. people or material) and others in order to make the project completed efficiently.

Project manager can not be easily being judge in doing negligent in the construction project. There are some requirement that had been stated in some books on element of liability where in order one party to be judge as breach of contract or negligent in the project, plaintiff must show or prove that the defendant (project manager) done something wrong or make mistake in conducting their duties.

Hussin A.A. (2006) stated that there are four elements of negligence. The plaintiff in an action for negligence must show:

1. That the defendant owed him a duty of care

2. Considering the first of these elements, it is necessary to decide whether in the particular circumstances one person (the defendant) owed a duty of care to the other (plaintiff).

3. That there was a breach of that duty

4. That recoverable damage was thereby caused.

Sweet J. (2000) had stated the elements of negligence by saying that to justify a conclusion that the defendant was negligent, the plaintiff must establish the following:

1. The defendant owed a duty to the plaintiff to conform o a certain standard of conduct in order to protect the plaintiff against unreasonable risk of harm.

2. The defendant did not conform to the standard required

3. A reasonably close causal connection existed between the conduct of the defendant and the injury to the plaintiff.

4. The defendant invaded a legally protected interest of the plaintiff.

Finola O’Farrell Q.C. stated that in order to establish a claim in negligence, it is necessary for a claimant to satisfy the following requirements:

1. The existence in law of a duty of care

2. Behaviour that falls below the standard of care imposed by law

3. A causal connection between the defendant’s conduct and the damage

4. Damage falling within the scope of the duty

Aaron Larson (2003) listed four elements of a negligence action. A typical formula for evaluating negligence requires that a plaintiff prove the following four factors by a “preponderance of the evidence”:

1. The defendant owed a duty to the plaintiff (or a duty to the general public, including the plaintiff);

2. The defendant violated that duty;

3. As a result of the defendant’s violation of that duty, the plaintiff suffered injury; and

4. The injury was a reasonably foreseeable consequence of the defendant’s action or inaction.

2.4 Types of negligence

Hussin A. A. (2006) stated Negligence of professional can be divided into two which are negligence in giving statement (misstatement) or Negligence caused erroneous statement and Negligence in the performance of duties (in addition to advice).

As referred to the statement above, there are two types of negligence. Negligence caused erroneous statement can be determined as negligence made by project manager regarding their wrong statement given to the any other parties in construction project.

Negligence in the performance of duties (in addition to advice) including check the site, design, prepare budgets, prepare bills of quantity, selecting contractors, using the terms of the contract, comply with the law and practice, administer contracts, oversee the work, provide work instructions, and review work to make recommendations (work and progress payments). Project manager can be said negligent in the performance of duties because they not they are not comply their duties and carrying out the task properly such as not selecting the best contractors, not administer the contracts efficiently and others.

There are several examples of negligence that can be categorized under Negligence caused erroneous statement and Negligence in the performance of duties.

2.4.1 Negligence in giving advice

There is one case where project managers may be found negligent in performing their task such as failed to advise their clients about inappropriate construction materials. In that case, project manager is not really failed to advice their client because they do advice their client verbally but not record it in writing. However, project manager has obliged his obligation or duties to give advice and warn his client but it is also client’s obligation to take into consideration advice given by project manager. There is the case:

Pride Valley Foods v Hall and Partners

In case Pride Valley Foods v Hall and Partners which had been occurred in June 2001 is about Pride Valley who intended to expand their small company specializing in baking pitta and nan breads. Pride Valley decided to build a factory for expanding their business in County Durham which is located in the North East of England. Pride Valley had been advised by their financial backers to approach Hall & Partners as Pride Valley had no experience in design and build contract and also in construction. Hall & Partners had been engaged by Pride Valley as their project managers for the construction of a factory in Country Durham. Hall & Partners is a well-known local firm of quantity surveyors and estate agents.

The issue is Pride Valley wanted keep costs down and Hall & Partners proposed to Pride Valley to use expanded polystyrene panels as partitioning. Hall & Partners had informed to Pride Valley the risk of using expanded polystyrene verbally and not in writing.

As a result, expanded polystyrene panels were used as partitioning was destroying the factory. As stated by Molloy J.B. (YEAR) ‘expert evidence agreed that the fire had developed at the bottom of a flue serving the pitta bread line due to a build up of cooking deposits in the flue, and spread to the expanded polystyrene wall panels which rapidly spread the fire through the entire building with such force that it was too dangerous for fire-fighters to even enter the building in order to put the fire out.’

Pride Valley decided to sue Hall & Partners for the consequences. Hall & Partners had been blamed by Pride Valley because of failing to discharge project manager’s duty of care and also to warn them.

Hall & Partners maintained that they had given advice verbally with Pride Valley. But, the court held that Hall & Partners had failed to give appropriate advice to Pride Valley as project managers. Although Hall & Partners had given advice verbally, the judge did not consider it because they failed to record it in writing.

However, the judge rejected Pride Valley’s claim because the court further held that Pride Valley would not have taken Hall & Partner’s advice if it had been given whereas merely focused on the cheapest cost of the building by using expanded polystyrene that given risk.

Patten B.(2003) stated project manager’s role in concerned with supervision and co-ordination and however there are also a project manager that failed to control particular aspects of the costs, failed to ensure that other construction professionals had access to correct information or failed to prevent another construction professional from making an important error.

Furthermore, Patten B. (2003) shows that there is contributory negligence of project manager to the project. One case had been stated where project manager failed to warn his client regarding the special panels. Special panels which client intends to use were not suitable because of highly combustible and the chance of fire spreading throughout the building is high. Hence, court decided to reduce the damages that need to be recovered by the claimant and also the loss caused by the fire will be covered 50 percent by the project manager. It is because, project manager is the person who did not take reasonable actions in preventing the loss happen because of fire and project manager plays an important in coordinating and supervising the project. Blame on project manager regarding this case would give bad impression to professional performance in construction industry by parties involved in the project. Supposedly, as project manager, they should avoid this negligence by discussing client’s requirement first and take reasonable steps in preventing bad things happen in site. Project manager acts to coordinating the works and supervise the progress of work. Project manager owed duty of care to review the programme and ensure that the project on programme by using reasonable endeavors.

There are two cases had been discussed by Patten B. (2003) which is Chesham Properties Ltd v. Bucknall Austin Project Management Services Ltd and Royal Brompton Hospital NHS Trust v. Hammond and others.

2.4.2 Negligence in performing his duty of care

Project manager holding big responsibilities in making project successfully completed. However, as a human being there are some of responsibilities that project manager does not realize on it. There is a case regarding this issue:

(a) Pozzolanic Lytag Ltd v Bryan Hobson Associates (1998)

This case involved in construction of a dome. Bryan Hobson Associates (BHA) is an engineer that being engaged as project manager by Pozzolanic Lytag. BHAs were responsible to the design and construction of storage facilities for pulverised fuel ash. That is project manager responsible to successfully complete the project. As the construction completed, the works designed by the Contractor collapsed and there is no-one had taken out the required insurance. Insurance is very important in order to protect the product of construction at the end of the project and also important during the construction stage. However, insurance should be taken out in order to protect construction product even after the construction completed for certain period. In this case, BHA had been blamed by Pozzolanic Lytag because of failure in ensuring the insurance was in place and insurance also must be updated for certain period. However, BHA said that they did not know that it was their job to check on the insurance and they did not know anything about insurance. As project manager, they should take note their obligation or duty of care towards client’s interest although they were not expert in several aspects. However, that is the challenges that project manager are going faced on. Hence, the court found out that project managers did not relieve their responsibility although they lacked the expertise regarding insurances. As what been judged by court, project manager should be able to find out the way they carry themselves in handling this kind of problems. Although that kind of thing is not project manager’s expertise but it is still under project manager’s responsibility to look into those aspects.

(b) Chesham Properties Ltd v Bucknall Austin Project Management Services (1996)

In this case, Bucknall Austin had been appointed as project manager by property developer which is Chesham Properties. Chesham Properties involved in a scheme to develop a site known as Royal Court House in Cadogan Place, London.

This issue of case was the contractor was given an extension of time where it supposedly not be granted to contractor. Contractor had been awarded extensions of time just because to cover up the failings by the professional team. The project also had overrun in cost and time.

Chesham Properties found out that Bucknall Austin was breached the contract and also negligent in performing their duties. Furthermore, Chesham also argued that there should be an implied terms to Bucknall Austin as a project manager where the deficiency of works might affect or contribute to defects in the work, increase costs or delay completion. Hence, as a project manager’s duty was to warn Chesham regarding the deficiencies in the performance of parties involved. Besides, as a project manager he had an obligation to inform Chesham Properties.

As a result, the developer sued the whole professional team. The court also found out that project manager was under a duty of care to report to the developer on deficiencies in the performance of the rest of the professional team and project manager was negligent in failing to do so.

The judge was of the view that:

“The Project Manager was plainly under a duty, on the true construction of the contract in such terms and made in such context, to report to the plaintiff on deficiencies in performance on the part of its co-defendants.”

In this case, project manager owed a duty of care to inform employer regarding the deficiencies in the work of the other professionals.

2.4.3 Negligence in supervision or inspection

According to R.M. Jackson and J.L. Powell (1992), the architect or engineer in general necessary inspects the construction building properly either before or during construction of a structure. As a project manager that having background either architect or engineer or quantity surveyor must be able to do inspection or supervision efficiently.

In book written by Hussin A.A.(2006), there are statement by R.J. Kemelfield where architects, engineers or contractors may be held liable for losses incurred by the client if they failed to inspect building sites with the right methods. These include inspection when work is being undertaken especially during the excavation work was completed.

There is one case regarding engineer’s negligence in their duties. This case is between Moneypenny vs. Hartland where in that case, an engineer had been found negligent for failing to examine the form of land that will accommodate the basic construction of a bridge which can be called as foundation of the bridge. Consequences of this failure, he has made assessment of the costs that are too low for construction.

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This case is about engineers fault because he or she does not examine the form of land effectively. As what we can interpret from this case was engineer makes a mistake because in examining the form of land is actually can be classified under engineer’s liability in construction project. Hence, engineer can be said as negligence in the performance of duties and not comply duty of care and their liability as a professional.

However, in case Columbus Co. vs. Clowes is about an architect has been found negligent for failing to assess and measure a site. He just depends on what was told to him by third parties. Consequently he has been drawing plans and specifications based on dimensions smaller than the actual dimensions of the site.

This is another case that involve architect as professional in construction project. In this case, architect failed in carrying out their task which is fails in assessing and measuring a site. Basically, as referred to this case, architect was found guilty and negligent because they do not do their job effectively and only referring to the third party to get information to draw the plains and specification. It shows that, architect that involved in that project do make any effort to get information and not carrying out their task earnestly.

As what been discussed above, it shows that engineer, architect and any other professional were found guilty in carrying their task. As a professional, they are the person who can take responsibility in being project manager. As they failed to perform their duties, they might face the problem once they being a project manager. However, it can be done by studying project management before they come into project manager world. It can reduce the probability to give high risk in negligence during the construction project or after the project completed.

There are other cases that relates to inadequate supervision which are:

• Jameson v. Simon
• Leicester Guardians v. Trollope
• Clay v. A.J. Crump & Sons Ltd.

(a) Jameson v. Simon

Regarding on this case, architect was held negligent in failing to inspect work efficiently. In order to certify that the work had been executed according to the contract, supervision by architect required. However, in this case architect failed to inspect the bottoming of the cement floor of a house either before or at the time the floor was laid. The bottoming was subsequently found to consist of waste material and to be the cause of dry rot. There was an evidence to show that architect had done his supervision by visiting site in average once a week. Architect also had ‘given as much supervision and inspection as it was customary to give according to the practice of architects. But that practice was insufficient to absolve the architect for failure to inspect so important a part of the work.

(b) Leicester Guardians v. Trollope

Regarding on this case, by referring to Jackson and Powell (1992) stated that architect was held negligent in failing to supervise the laying of concrete. He had contended that it was for the clerk of works to supervise it. Channel J. rejected the contention, considering that the laying of the concrete was a very important matter since a large area had to be covered. He continued “if the architect had taken steps to see that the first block was all right, and had then told the clerk of works that the work in the others was to be carried out in the same way. I would have been inclined to hold that the architect had done his duty, but in fact he did nothing to see that the design was complied with. In my view this was not a matter of detail which could be left with the clerk of works.”

(c) Clay v. A.J. Crump & Sons Ltd

This case is about architect was requested by the employer to consider whether it was safe to leave standing a wall which subsequently collapsed.

Architect’s duty to the employer may require him to consider and advice upon the need for precautions. (Jackson & Powell,1992).

Architect as a project manager also has duty to warn any probabilities for problem to come out in order to protect employer’s interest and successfully completed.

2.4.4 Negligence in selecting contractors

Jackson and Powell (1992) stated one point of negligence which is failure to take reasonable steps in selecting contractors.

“The exercise of reasonable care and skill may require an architect to make reasonable enquiries as to the solvency and capabilities of contractors including nominated sub-contractors in circumstances where he is responsible for their recommendation. An architect was held negligent in failing to put the work of converting a house out to competitive tender in Hutchinson v. Harris. Similarly he should take care when examining the amounts of quotations, not to accept rates which are unreasonable in the circumstances.”

Valerie Pratt vs. George J. Hill Associated.

There is one case about the negligence in giving recommendation or can be said as wrong statement given by professional. That case is Valerie Pratt vs. George J. Hill Associated.

This case involves the architect who advised his client that one contractor company is “very reliable” in performing construction work and based on advice (recommendations) given by architect, the contractor has been appointed by his client. However, then the contractor can not be trusted and work performance by that contractor is very bad. The court found that the architect had violated his duties (duties) to advice, that he was doing wrong statement to his client.

In this case, the architect liable in giving advises to the client to choose the committed contractor to complete the job properly. However, architect that act as project manager need to advises the client and recommend the client the best contractor to complete the job but in this case, architect had been judge as doing wrong statement by giving bad recommendation to the client. Architect should investigate the background of the contractor in order to carrying out the task given and not simply choose the contractor by not knowing their experience in construction industry. As a result, project manager need to blame on this matter because they owed the duty of care to the client and not performing their duty efficiently.

There is another case where architect or engineer owes a duty of care and have liability for materials in project. As what James M. F. (2002) stated in his book, if the materials selected by the employer without reference to the architect or engineer then the only duty imposed upon the architect or engineer is a duty to warn of any defects in the materials known to him.

2.4.5 Negligence in advising on the suitable contract

As a project manager, it is an obligation of project manager in considering the terms of contract and chooses the best contract for client.

‘The exercise of reasonable care and skill may require the architect to advise the employer to reject a particular form of contract or a particular term if disadvantageous to the employer’s interests, or to refuse to nominate a particular sub-contractor unless he is prepared to guarantee or warrant to the employer the quality or fitness of certain work and materials.’ (Jackson and Powell, 1992)

2.4.6 Negligence in administering building contract

As what been stated by Jackson and Powell (1992), there is a case which is Wilks v. Thingoe (Suffolk) R.D.C. where an architect was held negligent. It is because architect was negligence in having embarked on a course of extravagant expenditure without his employer’s authority. The position of the architect under the JCT Standard Form of Building contract (1963 edition, July 1971 revision) was recently considered, mainly from the standpoint of its contractual consequences as between employer and contractor, in London Borough of Merton v. Stanley Hugh Leach Ltd. Vinelott J. stated:

“… under the standard conditions the architect acts as the servant or agent of the building owner in supplying the contractor with the necessary drawings, instructions, levels and the like and in supervising the progress of the work and in ensuring that it is properly carried out. He will of course normally though not invariably have been responsible for the design of the work… To the extent that the architect performs these duties the building owner contracts with the contractor that the architect will perform them with reasonable diligence and with reasonable skill and care. The contract also, confers on the architect discretionary powers which he must exercise with due regard to the interests of the contractor and the building owner. The building owner does not undertake that the architect will exercise his discretionary powers reasonably; he undertakes that although the architect may be engaged or employed by him will leave him free to exercise his discretions fairly and without improper interference by him.

2.2 The Causes of Project Manager’s Negligence

Project manager’s negligence in construction must leave impacts once it happened against project whether towards the project or parties involved such as workers. However, the causes of project manager’s negligence will be find out in order to prevent any other project manager from repeating same mistakes in future.

As a project manager, they are the best person chosen by client to handle the project successfully. They have capability and expertise in conducting a project is the reasons why client had high expectation towards project manager. However, project manager is different between each other. They studied project management but having different background, experience, level of capability, attitude and etc that bringing different way or style in handling the project. Tunner and Muller (2006) have also shown that a project managers’ success at managing his or her project is dependent on their competence, particularly their leadership style comprising emotional intelligence, management focus and intellect.

As what Badawy M. K. (1988) stated where project manager requires a high degree of flexibility and adaptability, aggressiveness, persuasiveness, superb communication skills, an ability to deal with conflict and to function well within a highly ambiguous environment and ill-defined organizational relationships. This is not easy task because project manager’s task is a complex one. Furthermore, he also stated that the primary problems of project management are not technical because they are human. It follows that the ratio of project success as well as efficiency and effectiveness of resources utilization will be significantly enhanced if management can do a better job in recruiting, selecting, training, and developing managerial skills of project managers. The causes of project failure can be numerous. However, the core reason for project failure usually is not limited resources but incompetent project managers. Projects fail because managers fail.

Project Manager’s negligence comes from the project managers itself. Project manager have responsibilities in carrying out the task and ensure all the works being completed efficiently. In order to make the projects flow smoothly, project managers must have ability in solving the problems during the construction stage and well-trained in project management. Poor project manager will overemphasis of technical skills as prerequisite for selection to project management positions as what been stated by Badawy M. K. (1988).

In managing the projects, it is not only on technical skills as what statement given. It is about soft skills that project manager had in order to deal with people in construction project. If project manager failed to deal with parties involved in the construction project, the probabilities of project manager’s negligence is higher. As project manager, they need high interpersonal skills and superb communication skills in being a good project manager. These skills are important to avoid project manager’s negligence in construction project such as miscommunication in giving instruction and others. Lack of communication also is one of the causes of project manager’s negligence as communication is very important in conducting, directing, organizing and etc to make the instruction or information were clearly given and understood.

1. Inappropriate advice

There is another cause of project manager’s negligence in construction which is failed to advice his client in appropriate way. There is the case where project manager is wrongdoer because has advise their client without record it in writing. This case clearly shown the caus