Many parties responsible on the construction site | In Principle

When the investor suffers damage, it is not necessary to find out who contributed to it and to what extent. The damage can be redressed by all entities responsible for its creation, even if they took part in the construction process in different roles and on a different basis.

The construction process is often a complex undertaking. This is due among other factors to the number of entities involved in the process, the necessary specialist knowledge, and the considerable influence of external factors on the project. In addition, there is the significant value of funds invested in a construction project. All these aspects affect the extent of disputes between the parties to this process.

In many cases, when the investor suffers damage, it cannot be attributed to a single entity, but to a larger number of entities. In the practice of applying the law, the construction of “liability in solidum,” which is often used in disputes in the construction industry, has developed.

Designer’s and inspector’s error

Suppose the designer makes a design mistake and the investor’s supervision inspector allows execution of part of the building on the basis of the defective design. As a result, soon after construction is finished, it turns out that the roof is leaking, threatening to further damage the upper part of the building, requiring urgent repairs and excluding use of the building at least in part.

According to the principle of indemnity liability, the investor may seek compensation for damage related to the improper operation of various participants in the development process. At the same time, the investor has two possibilities. The first possibility is to seek redress separately from each of the parties that caused the damage. The second solution is to use the structure of liability in solidum and seek compensation from all defendants altogether. This article focuses on the latter solution.

Principles of liability in solidum

The structure of liability in solidum has no particular regulation, as it has been defined by the legal doctrine. However, it is used to pursue claims for damages and is fully approved by the courts. Due to the lack of regulations in Polish law, the provisions of the Civil Code concerning passive liability, i.e. joint and several liability of defendants (with some exceptions), are applied to it analogously.

It will apply to situations where the investor’s loss arises from non-performance or improper performance of two different, independent contracts (e.g. for construction work and design work). It may also occur when one of the defendants is liable on the basis of a contract with the investor and another is liable in tort for a wrongful act.

It is characteristic for this type of liability that there is no distinction in the value of the damage to be repaired by a particular entity. Therefore, such a structure is applicable in situations where it is not possible to determine the degree of contribution of a given entity to the damage. In our case, this will be applied as the designer caused the damage in its entirety through execution of a defective construction design. If not for his mistake, the investor’s damage would not have occurred. Similarly, the investor’s supervision inspector is entirely responsible for the damage. If he noticed the design error and ordered a replacement design and then the correction of the defective element of the facility, the damage to the investor would not have occurred or would only have caused a delay in the development process (mainly resulting from preparation of a replacement design)—and only the designer would be responsible for the damage. So, if a designer makes a mistake and it is not noticed by the people responsible for supervising the construction process and ensuring compliance with the law and technical standards, these people will have to bear responsibility for not noticing the mistake, i.e. not fulfilling their obligations. The decisive factor in attributing liability for the damage to each contributor is that the negligence of each contributor was sufficient to cause the damage—even if, at the same time, another party also caused the damage.

Besides, a basic assumption of liability in solidum is that satisfaction of the plaintiff by one of the defendants relieves other defendants of the obligation to pay the plaintiff. On the other hand, settlements between these entities will involve legal recourse.

On this basis, depending on the case, the liability may be borne not only by the designer and the investor supervision inspector, but also, among others, by the site manager, the contractor for the building works, the construction engineer (acting on the basis of a FIDIC model), a subcontractor, a machinery supplier, etc.

An advantageous solution

The notion of liability in solidum is beneficial from the point of view of the entities suffering damage and those responsible for it.

For the investor, the possibility of seeking compensation from several entities at the same time means a greater chance of repairing the damage suffered. The more entities the liability can be attributed to, the wider the group participating in the costs of repairing the damage. In such situation, the others are liable in the event of the insolvency of one of the entities. Everything takes place in a single judicial process, reducing time and involvement in activities leading to compensation (one trial instead of several trials).

On the other hand, for the responsible party, involving more than one party means that the damage has to be covered only in part, whereas under the general liability regime the party could be held liable for the full damage.

Summary

To sum up, recourse to liability in solidum may occur when the following factors exist:

• Multiplicity of defendants—there has been a breach of law or contract by more than one entity, e.g. the designer and the contractor of building works
• Separateness of debts—the liability of various entities for damage results from different grounds, e.g. the contractor is liable on the basis of the contract for building works and the designer on the basis of the contract for design works
• Inability to determine the extent to which a given participant in the process contributed to the damage—the designer preparing a faulty design undoubtedly caused damage to the investor, but so did the inspector or site manager who allowed the structure to be erected defectively (in accordance with a faulty design).

Hanna Drynkorn, Infrastructure, Transport, Public Procurement & PPP practice, Wardyński & Partners