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Red sandstone in a construction site. Credit: B.Panupong/Shutterstock

 

 

This article explains the legal and contractual principles of baselining the ground conditions in a contract, supporting the idea that the incorporation of the GBR in the contract is a valid and effective instrument for risk allocation among the parties.

 

Introduction

The geotechnical baseline report (GBR) is a statement representing the ground conditions for which, when incorporated into the contract, the contractor assumes the risk and ought to provide for it in the contract price.

This paper seeks to demonstrate that the incorporation of ground baseline conditions (GBC) into GBRs is an effective tool for the contractual management of ground risk in construction projects, producing clarity in pricing contracts and for dispute prevention. The topics that will be dealt with in this paper are:

• the legal basis of the allocation of ground risk;

• the general concept of GBRs;

• their place in the contract; and

• the contents and use of GBRs.

The allocation of ground risk: the legal basis

In some jurisdictions, such as France or Qatar, the latent geological risk is a joint and several responsibility of ‘all builders’, that is, the contractor, the engineer or architect and the designer, for a period of ten years.

In France, under Article 1792 of the Civil Code, the latent geological risk is a contractor’s risk or a joint and several responsibility of all builders.¹ Article 1792 implies a fitness of purpose liability, irrespective of whether the cause of the defect was foreseeable or not, with the exception of external causes (eg, force majeure). The question of foreseeability in the ground risk may arise under the doctrine of imprévision in Article 1195,² which states as follows:

‘Where a change of circumstances that was unforeseeable at the time of the contract’s conclusion renders performance exceedingly onerous for a party that had not accepted to assume such risk, the party may ask the other party to renegotiate the contract.’

In Italy, Article 1664 of the Civil Code requires the employer or owner to give the contractor fair compensation in the case of unforeseen geological difficulties that make the works substantially more expensive. According to Article 1669 of the Civil Code, in the case of the collapse or serious defects in the works, the contractor bears the responsibility for the ground risk³ also towards third parties, for example, the buyer of the defective building,⁴ with a limitation period of ten years. The responsibility is extended under the contract or in tort to all those involved in designing and building the defective works, that is, ‘all the builders’.⁵ The contractual responsibility is limited by Article 1225 of the Civil Code to those damages that were foreseeable. Ultimately, it is essential to determine whether the ground conditions that caused damage or substantial additional costs were foreseeable or not, extending such exemption of responsibility to cases in which the contractor did not foresee or could not have foreseen those circumstances.⁶

Under German law, the Civil Code⁷ allocates the ground risk to the employer. The court has clarified that: ‘The subsoil is provided by the employer and therefore the employer must bear the consequences of unforeseen problems in connection with its subsoil.’⁸ Thus the question of foreseeability is also determinant under German law, notwithstanding the allocation of the ground risk to the employer or owner.

The incorporation of GBC into GBRs is an effective tool for the contractual management of ground risk in construction projects

Under English law, the contractor bears the risk of changed ground conditions, unless it is otherwise expressly provided for in the contract. In Worksop Tarmacadam Co Ltd v Hannaby (1995),⁹ the Court of Appeal refused the contractor’s claim for the additional costs associated with encountering rock harder than foreseen, saying that had the parties wished to make provision for the unforeseen circumstances, they would have done so in the contract.

The rationale of this common law principle lies in the contract since, where the contractor has undertaken to complete works and to comply with contract drawings and specifications, it is responsible for performing the promises, irrespective of unforeseen conditions, without entitlement to variations.

In Thorn v London Corporation,¹⁰ the contractor undertook to build a bridge in accordance with a given method of work based on caissons. When the contractor claimed that caissons were not buildable due to adverse ground conditions, the court dismissed the contractor’s allegation that there would be an implied warranty as to plans and specifications providing the use of caissons, as ‘although it was the engineer who suggested building those caissons, the builder promised he would’. The court upheld the principle of certainty of price and performance and, in the absence of any contract term regulating the change in ground conditions, the unforeseen change of method imposed by adverse physical conditions was held to be a contractor’s risk.

In Bacal Construction (Midlands) Ltd v Northampton Development Corporation,¹¹ the ground conditions proved to be different from those anticipated in the tender documents and the employer had prepared a report on ground conditions on which the tender price had to be based. That report considered the presence of sand and clay, instead of ‘tufa’, a spongy material that required substantial redesign. The Court of Appeal held that where there is ‘an implied term or warranty that the ground conditions would accord with the hypothesis upon which the contractors had been contracted’ then the risk, under differing circumstances, should be borne by the employer. In short, ‘whether or not a statement is intended to be binding as a warranty depends on the intentions of the parties’.¹²

The first question is what conditions are expressly or impliedly foreseen under the contract

If a report on ground conditions is not expressly incorporated in the contract, it is not considered a term of the contract on which rights and obligations are measurable by reference to it. Rather it ‘would require an unambiguous wording to give rise to such a result’ and ‘it does not contain any statement sufficiently definite and unqualified to amount to a representation upon which [the parties] could reasonably have relied’.¹³ Under the circumstances, the stringent requirements of Thorn wouldapply to the contractor.

Therefore, if the foreseeable site conditions are not defined under the contract, together with provisions for changed conditions, the ground risk remains entirely up to the contractor. If the parties intend to allocate to the employer a component of that risk, then they must establish in the contract a clear boundary between the ground conditions foreseen and allowed for in the price and, by exclusion, those residual risks that are considered to be ‘unforeseeable’ and so belong to the employer. Therefore, the first question is what conditions are expressly or impliedly foreseen under the contract.

Since ‘it is legitimate, and commercially desirable, that both parties should be able to measure the risk, and agree the price on the basis of the warranties which have been given and accepted’,¹⁴ data and reports on ground conditions may be considered a term or a warranty when they are expressly incorporated in the contract, as long as there is no uncertain language, waiver or disclaimer.

In essence:

• the allocation of ground risk is determined by the terms of the contract, and ‘the general law of jurisdiction’;¹⁵

• in a contractually neutral situation, such as where there is no term on adverse ground condition and when there is no warranty by the employer, the risk of adverse ground conditions is borne by the contractor;¹⁶ and

• a clear, common understanding of the physical conditions on which the contract is based and of the liability for bearing the consequence of the ground risk is one of the incentives for risk management and the ‘reduction of this uncertainty is achieved by contract documents that are explicitly drafted’.¹⁷

In order to divide and allocate the risk between the parties, the contract should state the conditions that are allowed for by the contractor and should be included in the contract price, providing a mechanism to manage ground-related changes.

A contractual instrument that has regard to the aforementioned elements and sets the baseline reference conditions to be allowed for in the contract is named the ground baseline report (GBR).¹⁸

The GBR: general concepts

A GBR is a single ‘contract document containing measurable contractual descriptions of the geotechnical conditions to be anticipated […] during construction’.¹⁹ In fact, a GBR should be included as a representation²⁰ and not be merely provided ‘for information’.

The Joint Code of Practice for Risk Management of Tunnel Works (JCoP)²¹ defines ground baseline conditions (GBC) as follows:

‘Definitive statements about […] the ground […] and groundwater together with geotechnical properties of the ground which serve as the basis for construction Contract tendering purposes and for subsequent application of the contract with respect to the conditions actually encountered during Tunnel Works.’

A similar definition is included in the Code of Practice for Risk Management of Tunnel Works (TCoP), prepared by the International Tunnelling Insurance Group in May 2012, which used the term of ‘Ground Reference Conditions’²² as the contractual definition of ‘what is assumed to be encountered’, but is not a warranty that these conditions will be encountered.

These definitions provide the synthesis of the purposes of the GBR. This includes the site data to be considered and relied upon under the contract, a measure of the risks to be included in the contract price, the watershed for risk allocation and the basic list of hazards to be considered for ground risk management. Then, the contractor does not need to be predictive and include further contingencies on ground risk in its price beyond the limit of the conditions defined in the contract baseline.

During construction, the baseline may be compared with actual conditions, in order to determine if and how much these circumstances are more unfavourable than expected and to evaluate the appropriate compensation, thus avoiding any waste of time and disputes. In underground works, such evaluation could include an adjustment formula based on the expected excavation method, geotechnical parameters and rate of progress, or could be based on any other practical mechanism of extending or decreasing the time for completion or the contract price.

The Construction Industry Research and Information Association (CIRIA)²³ rightly concludes that ‘however unexpected the ground conditions prove to be it is better to have a defined base for the tenders so that it is known where the incidence of the resulting cost will lie’.

A connected and derived purpose of the GBR is risk management during contract implementation. The GBR can be used by contractors as the basis to prepare the initial risk assessment and management plan as far as geotechnical conditions are concerned.²⁴ Such initial evaluation, if provided as a tender risk register, could be used by the employer as an evaluation tool in selecting the most convenient and compliant bidder from a risk point of view.²⁵

The management of risk should then be furthered beyond the range of contractually motivated reasons, but be comprehensive and subjected to periodic updating, revision and monitoring.

That said, it is emphasised that the GBR is not a measure for risk management during the construction phase, but the mere instrument for the allocation among the parties of contractual responsibility of the residual risk.

The GBR and its place in the contract

Anything can happen when dealing with ground conditions²⁶ and since contracts cannot specify all future eventualities, they should at least incorporate a contractual mechanism to determine how to deal with them. Furthermore, an undefined scope for ground conditions that are to be expected under the contract is an open door to disputes, and the remedy is finding a way to define the parameters of what is or ought to be included in the contract price.

As such, those conditions should be considered as the basis or the baseline for risk evaluation and pricing. In fact, before executing a contract, the tenderer needs to know ‘with a sufficient degree of certainty’ the risk that it is going to price,²⁷ while the employer needs to know what it is going to pay for. Disclosure of the available site data by the employer falls in line with the principle that it has a duty to facilitate rather than prevent the proper performance of the contract.²⁸

In the United States, the application of the GBR was first recorded in 1972 in the Washington, DC Metro. In 1984, it became the subject of a study by the US National Committee on Tunnelling Technology, Geotechnical Site Investigations for Underground Projects.²⁹ In 1997, the American Society of Civil Engineers (ASCE) published the guidelines proposed by the Technical Committee on Geotechnical Reports of the Underground Technology Research Council and a revised version was issued in 2007.³⁰

Anything can happen when dealing with ground conditions

In the United Kingdom, the CIRIA published in 1978 its Report 79, Tunnelling – improved contract practices, which mentioned ‘Ground Reference Conditions’ (GRCs). This was the forerunner to the concept of the GBR, which appeared in 1997. The concept of GRCs was used in the original JCoP,³¹ which referred also to geotechnical baseline conditions.³² The name of Ground Reference Conditions was retained in the Code of Practice for Risk Management of Tunnel Works in 2012.

More reports were issued that emphasised the method of presenting site investigations and incorporating such documents into the contract in order to define the basis of tendering and then to measure what should be included in the contract price as ‘foreseeable’ conditions, and what should be priced as a variation or as an adjustment to the price.

Beyond the GBR, site investigations may result in other types of geotechnical reports:

• a geotechnical data report (GDR) is ‘all the factual geotechnical data collected during geotechnical exploration’ that does not include interpretative analysis. The guidelines in the ASCE’s Geotechnical Baseline Reports for Construction (2007) recommend that a GDR should also be part of the contract documents to be used in case the GBR is ambiguous or silent on any matter. In the author’s view, the GBR should be so clear as to leave no room for interpretation, without the help of other documents. In any case, the GBR should have priority.

• A geotechnical interpretative report is a written assessment of geotechnical data with an interpretation, generally prepared for the use of the designer.

• There is also the geotechnical design summary report, which explains the assumptions made by the project designer. However, the contractual baseline for bidding and for construction should be contained in a single report in order to avoid confusion with conflicting documents. It should be well identified as the geotechnical model that the parties should rely on under the contract.

The GBR should be so clear as to leave no room for interpretation

The GBR contains the baseline contractual references to establish conditions encountered during construction that are materially more adverse, onerous and time-consuming or may be considered as ‘unforeseen’. Then, the contract should also include a ‘differing site conditions clause’ (DSC) that allocates the risk of such changed conditions to the employer.³³

When the GBR is included in the contract, becoming the contractually accepted interpretation of the data, it removes the uncertainty of interpretation from contracts such as the 1999 FIDIC Red and Yellow Book, where the contractor is responsible for interpreting the site information provided by the employer.³⁴

Sub-Clause 4.12 (‘Unforeseeable Physical Conditions’) of both contracts provides that:

‘If and to the extent that the Contractor encounters physical conditions which are Unforeseeable, gives such a notice and suffers delays and/or incurs Cost due to these conditions, the Contractor shall be entitled […] to

(a) an extension of time for any such delay […] and

(b) payment of any such Cost’

Under Sub-Clause 1.1.6.8, ‘unforeseeable’ ‘means not reasonably foreseeable by an experienced Contractor by the date of the submission of the Tender’. Therefore, the inclusion of the GBR among the contract documents would have an impact on Sub-Clause 1.1.6.8, defining what is unforeseeable. The GBR could include a procedural mechanism to assist the application of additional cost and extended time entitlements under Sub-Clause 20.1 (‘Contractor’s Claims’) and 8.4 (‘Extension of Time to Completion’), facilitating the comparison between expected and actual conditions.

Under the Red and Yellow Books, the GBR could be included in the contract as a particular condition of Sub-Clause 4.12 (‘Unforeseeable Physical Conditions’) or could become part of the definition of ‘unforeseeable’ under Sub-Clause 1.1.6.8. Then the contractual notion of foreseeability, which is broadly defined in FIDIC 1999 as circumstances ‘reasonably foreseeable by an experienced contractor^’,³⁵ is then narrowed to what is stated in the GBR.

Sub-Clause 4.12 is a DSC, but does not automatically give rise to a variation unless the engineer, in order to overcome physical difficulties, gives an instruction that falls under the conditions listed in Sub-Clause 13.1 (‘Right to Vary’), such as additional work or a change in the work method, for example, underground excavation with a different type of tunnel boring machine. To the extent that the contractor suffers a delay or incurs additional costs, Sub-Clause 4.12 entitles the contractor to an extension of time for the delay and compensation of additional costs incurred.

Under the FIDIC EPC/Turnkey Silver Book, Sub-Clause 4.12 excludes any adjustment of time or cost for unforeseen difficulties, ‘except otherwise stated in the Contract’. Therefore, the GBR and the DSC could be included under Sub-Clause 4.12 as particular conditions, modifying the ‘total responsibility’ of the contractor, as in the following example:

‘Provided if and to the extent that the Contractor encounters adverse physical conditions during the construction of the Works, the effects of which delays the time for completion foreseen in the contract, shall entitle an extension of time to the Contractor.’

While one of the FIDIC Golden Principles provides that the balance of risk and reward allocation should not be changed by the particular conditions, the inclusion of the GBR in the Silver Book could provide a prudent rebalancing of the otherwise unlimited allocation of ground risk on the contractor that has limited financial and capital resources. Since the employer may be‘faced with the project in difficulty and a bankrupt contractor’,³⁶ there is contractual wisdom in allocating the ground construction risk fairly among the parties.³⁷

Under the NEC3 contract, Sub-Clause 60.1 (12) defines a ‘compensation event’ as the case of physical conditions that

‘an experienced contractor would have judged at the Contract Date to have such a small chance of occurring that that it would have been unreasonable to for him to have allowed for them’.

The NEC3 approach is based on reasonable probability, but baselines would define with certainty what would be reasonable to have allowed for. The GBR could be included as part of the contract under ‘Option Z (Additional Conditions of Contract)’ and be designed to trigger a compensation event, to be measured as ‘the difference between the physical conditions encountered and those for which it would have been reasonable to have allowed’.³⁸

The JCT forms of contract do not include ground risk under the list of ‘relevant events’. Therefore, adverse ground conditions, if introduced by way of a special bespoke term, could be added as a 15th item of Sub-Clause 2.26 (‘Relevant Events’), or as a cause for changes under Sub-Clause 5.1 (‘Definition of Changes’).

Clause 12 of ICE Fifth Edition provides a mechanism for claiming additional costs and delays if the contractor encounters physical conditions that ‘could not reasonably have been foreseen by an experienced contractor’. This provision is conducive to the ad hoc introduction of the GBR in the contract, as a means of defining what is included in the price as foreseeable conditions.

The Project Partnering Contract (PPC) 2000, the Association of Consultant Architects standard form for a partnering contract, provides for a joint review of the site investigations³⁹ that could produce a jointly agreed baseline report. The PPC 2000 provides for the open-book inclusion of risk contingencies to the price framework.⁴⁰ Also the bidder’s assumptions should be made known in order to promote the culture of transparency among the parties and to provide a shared base to assess the contract price. The duty of disclosing the available site data falls in line with the principle that the employer has a duty to facilitate the proper performance of the contract.⁴¹

The FIDIC Emerald Book, Conditions of Contract for Underground Works, issued in 2019, is a design-build contract, in which excavation and lining are carried out on the basis of measurement of actual quantities of work. Under the Emerald Book, the GBR is incorporated in the contract, together with a baseline schedule. ‘It sets out the allocation of risk between the Parties’ for subsurface conditions.⁴² The GBR is instrumental for time and cost adjustment according to actual circumstances, and the time for completion may increase or reduce if actual conditions are more adverse or more favourable than the baseline and the GBR. Time-related costs are also subject to adjustment, according to a baseline programme and the terms of the GBR. Sub-Clause 13.8.3 provides that foreseeable conditions may be adjusted by applying the production rates in the baseline schedule to the actual quantities of work. Lastly, in case of unforeseeable physical conditions under Sub-Clause 4.12, time and cost may change according to the circumstances actually met.

The GBR should take a practical approach in defining the site conditions

Contents and use of GBRs

The use of GBRs must be associated with express contract provisions to deal with changed conditions or the parties will face an uncertain recourse to the governing law of the contract to resolve disputes, defeating the purpose of defining both what is considered ‘unforeseeable’ and the remedies available under the contract.

The GBR should take a practical approach in defining the site conditions. It should focus not only on the ground, but on the method of work. In tunnelling, this document could identify the expected geotechnical classification, the method of classification and the distribution of the types of rock classes along the tunnel profile. Then the GBR could distinguish the method of work envisaged in the contract to bring clarity to whether the changed site conditions lead the parties into a variation, avoiding situations such as that disputed in the English case Bottoms v Lord Mayor of York.

If the description of geotechnical conditions in the GBR contradicts the contract documents, there could be conflicting interpretations and disputes

The contents of the GBR should be balanced and realistic, since ‘overly conservative baselines for items such as obstructions […] can result in overly conservative and costly bids’.⁴³ Overcautiously drafted baselines may cause the contractor to bear the total responsibility of the ground risk, resulting in a higher bidding price and defeating the allocation purpose of the GBR. The contrary would also be deleterious, when an oversimplified baseline would absolve the contractor from otherwise foreseeable risks.

Another good reason to give a balanced position to the GBR is that of motivating each party to resolve the difficulties that eventuate during construction within their capability and in the interest of the project that should be completed in time and within budget.

The description should be detailed enough to encompass the range of conditions that may occur. On the other hand, a vague or broad description of ground conditions would not eliminate uncertainties on risk allocation, but, after any event, it would leave room for its interpretation with inevitable hindsight knowledge. This would create fertile ground for denial of responsibility and disputes, especially when there is an expensive bill to pay as a consequence of adverse ground conditions. Therefore, baselines and DSCs should be ‘most clearly and unambiguously expressed’.⁴⁴ Another controversial point is when the GBR includes terms that are related to performance, such as an advanced rate of excavation, because that may be ambiguous and lead to discussions. That said, the GBR should provide parameters based on the behaviour of the ground with respect to its excavation rather than merely geological references.

If the description of geotechnical conditions in the GBR contradicts the contract documents, there could be conflicting interpretations and disputes. For example, geotechnical investigations may include many reports that may be difficult to integrate in a single interpretative work. Moreover, bills of quantities (BoQ) could also be confused with a baseline. However, under some forms of contracts, substantial changes could entitle the parties to renegotiate time and rates. Lastly, the difference between BoQ and the GBR is that the former represents the quantities of the works and the latter describes its physical conditions⁴⁵ and both are unrelated to each other. This is the very reason for putting the common seal to a single GBR, warranted and relied upon by the parties where the GBR should have the highest priority among the contract documents.

Above all, since the GBR is the formal representation of the ground conditions on which the contract price is founded, it should not be manipulated in any direction, to avoid allegations of misstatement or misrepresentation.

It is difficult to prepare an appropriate GBR linked with DSC that defines in clear terms those circumstances that ought to be foreseen and provide a practical mechanism to measure differences. A potential weakness of the GBR lies in this point.

As there was a perceived reluctance on the part of clients/promoters to prepare GRCs, the JCoP (2003) that was then being drafted included the following provision:

‘7.2.5 Contract Documentation (as well as subcontract documentation for Tunnel Works as appropriate) shall include Ground Reference Conditions or Geotechnical Baseline Conditions prepared by the Client (or prepared on his behalf) or shall
require each tenderer to submit with their tender their own assessment of Ground Reference Conditions or Geotechnical Baseline Conditions [emphasis author’s own].’

‘7.2.10 Notwithstanding the issue of a project Risk Register in the contract documentation, tenderers are required to prepare and submit their own project Risk Register for submission with a tender as well as specific Risk Assessments… with descriptions of risk mitigation/control/contingency measures.’

The reason for requesting ground baseline conditions and/or a risk register from tenderers is to make sure that the ground risk is properly assessed by the tenderer and included in the tender price so as to provide a level field for comparing bids. The contractual value of these submissions depends on the provisions of the contract that will eventually be signed by the parties. Even if in turnkey contracts the ‘contractor takes all the risk’, employers should be mindful that if the project encounters ground difficulties, the employer will bear the consequences that may only be remedied by a monetary compensation.

For example, in Obrascon v the Attorney General of Gibraltar,⁴⁶ the contractor made a limited provision for polluted ground to be disposed out of the site, following non-binding information provided by the tender documents, and the judge said that he was not prepared ‘to put precise figures on the actual and foreseeable quantities of contamination’, but ‘the contractor needed to make provision for a possible worst case scenario’. This risk could have been avoided if the quantities included in the bid would have been declared by the contractor and accepted by the employer, who at first suffered the delay and then had to face the risk of a dispute.

The GBR should include in clear terms the results of site investigations, but should also be drafted as a practical mechanism to measure actual conditions and compare them with those presented in the report.

In practical terms, the CIRIA⁴⁷ indicates that the reference conditions should include at least the following elements:

• a geological description of the site of the works, as well as the expected presence of gases, groundwater and contaminated ground;⁴⁸

• the method of construction;

• response to the behaviour of the ground during construction; and

• rate of advance, according to the geotechnical conditions.

It is impossible to predict with certainty what lies beneath the surface in any given position⁴⁹ unless the investigations are carried out on that very spot. This is the reason why ground conditions are best expressed in terms of characterisation and probability.

The GBR should take a practical approach to defining the site conditions; it should focus not only on the ground but also on the method of work. For instance, in tunnelling, this document could identify the expected geotechnical classification, the method of classification and the distribution of the types of rock classes along the tunnel profile. If the method of work is linked to the baseline conditions established in the contract, it becomes evident when changed site conditions lead the parties into a variation or a change dealt with under other terms of the contract.⁵⁰ The dichotomy between the claiming path of adverse physical conditions and that of variation was highlighted in the case Maeda Corporation v Bauer Hong Kong [2019]⁵¹ where it was determined that either way required its own notice.

Conclusions

The GRC or GBR ‘carries clear definition of risks and their allocations’ and ‘contains an effective means to settle disputes as risks materialise’.⁵² A properly drafted GBR integrates the contract bringing clearly defined terms of comparison (ie, expected versus actual) where the notion of foreseeability as the criterion for risk allocation could be hazy and become a potential subject of disputes.

As such, the GBR is an effective tool for the allocation of risk and the contractual management of differing ground conditions, provided that it is incorporated in the contract as a warranty and without unreasonable disclaimers. Since GBRs are not yet sufficiently utilised their use should be promoted by documents such as the TCoP and through their incorporation in standard contracts, such as the FIDIC Emerald Book.

 

 

Notes

* Eugenio Zoppis, FIHA, MCIArb, MCInstCES, MAPM, GMICE, is a project manager at Salini-Impregilo, Milan, and a contracts consultant, arbitrator and PhD researcher at King’s College London.

1 Art 1792 of the French Civil Code cites: ‘Tout constructeur d’un ouvrage.’ Art 711 of the Qatari Civil Code includes similar provisions. See also Ellis Baker and Michael Turrini, The Underlying Problem: Negotiating the Ground Condition Issue, (Society of Construction Law Paper No 181 2013), p 4.

2 Ordonnance No 2016-131 of 10 February 2016, enforceable in contracts concluded after 1 January 2016.

3 Sentence Cass No 26552/2017 of 9 November:

‘In order to be exempted from liability under Art. 1669 the builders [in Italian: artefici) must consider in the design of the building all the conditions of the ground in accordance with professional skill and current technical standards […] that may affect the building during its design and construction.’

4 Sentence Cass No 27250/2017 of 16 November.

5 Sentence Cass No 17874/2013 of 23 July.

6 Monika Chao-Duivis et al (eds),Studies in European Construction Law (European Society of Construction Law 2015), p 449.

7 Civil Code (Bürgerliches Gesetzbuch or BGB), s 645 ‘Responsibility of the Employer’ (Verantwortlichkeit des Bestellers) states that the contractor may request compensation:

‘If the work has become obsolete, deteriorated or unworkable prior to acceptance due to a defect in the material supplied by the employer or as a result of an instruction given by the employer for execution, without any circumstance for which the contractor is responsible [emphasis author’s own]’

8 Bundesgerichtshof IZR 60/14 of 28 January 2016.

9 Worksop Tarmacadam Co Ltd v Hannaby (1995) 66 Con LR 105 (CA), p 108.

10 (1876) 1 App Cas 120.

11 (1976) 8 BLR 88.

12 Max Abrahamson, Engineering Law and the ICE Contracts (4th ed, E & FN Spon 1979), p 58.

13 Cooperative Insurance Society Ltd v Henry Boot [2002] EWHC 1270 (TCC); Const LJ 2003, 19(2).

14 E A Grimstead & Son Ltd v Francis Patrick McGarrigan [1999] EWCA Civ 3029.

15 See n 1 above, Baker and Turrini, p 14.

16 Ibid.

17 Construction Industry Research and Information Association (CIRIA), Tunnelling, Improved Contract Practice, Report 79 (London, 1978), p 12.

18 In the Code of Practice for Risk Management of Tunnel Works (TCoP) (International Tunnelling Insurance Group, 2012), that document is named ‘Ground Reference Conditions’ (s 7.2.5, p 12).

19 Darren Page, Geotechnical Baseline Report, Presentation, Engineering Group of Geological Society, 15 September 2009.

20 A representation in this context is a statement of facts made by one party to the other before entering a contract, on which the latter may rely in preparing work methods and pricing.

21 The Joint Code of Practice for Risk Management of Tunnel Work in the UK (JCoP), prepared jointly by the British Tunnelling Society and the Association of British Insurers, September 2003, p 15.

22 Also the CIRIA in Report 79 at s 1.7 uses the term: ‘Ground Reference Conditions’.

23 Ibid, p 10.

24 ‘The Risk Register and GBR are complementary’, as stated by Randall Essex, Geotechnical Baseline Reports for Construction: Suggested Guidelines (American Society Civil Engineers 2007), p 57.

25 TCoP, s 7.5.1, p 13:

‘This Tender Risk Register should demonstrate how the tender submission adequately and appropriately caters for risks identified and to be allocated to the Contractor including their management and control procedures, proposed contingency measures and the cost and programme implications of the implementation of contingency measures.’

26 See n 12 above, p 66.

27 John Barber, ‘Risk in the Method of Construction’ in John Uff and Phillip Capper (eds), Construction Contract Policy, (Centre of Construction Law and Management, King’s College London 1989), p 64.

28 National Research Council, Geotechnical Site Investigations for Underground Projects (National Academies Press 1984), p 19.

29 Ibid.

30 See n 24 above, Essex.

31 See n 21 above.

32 Ibid, s 7.2.5.

33 See n 24 above, Essex, p 2.

34 Under Sub-Clause 4.10 [Site Data], FIDIC 1999.

35 Sub-Clause 1.1.6.8: ‘Unforeseeable means not reasonably foreseeable by an experienced contractor by the date for submission of the tender.’ This definition has not substantially changed in FIDIC Second Edition 2017.

36 See n 17 above, p 20.

37 See n 24 above, Essex, p 46.

38 Sub-Clause 60.1(13).

39 Sub-Clause 8.4 (‘Surveys and Investigations’).

40 Sub-Clause 12.9 (‘Risk Contingencies’).

41 See n 28 above, Vol 1, p 19.

42 Clause1.1.51.

43 William Edgerton (ed), Recommended Contract Practices for Underground Construction (Society for Mining, Metallurgy, and Exploration, 2008), p 19.

44 W&S Pollock & Co v McCrae(1922) SC (HL) 192.

45 See n 24 above, Essex, p 54.

46 Obrascon Huarte Lain SA v HM Attorney General of Gibraltar[2015] EWCA Civ 712 at 94. The contract in this case was based on the 1999 FIDIC Yellow Book.

47 See n 17 above, p 21.

48 See also TCoP, s 8.3.3, p 14.

49 In Ove Arup v Mirant Asia-Pacific Construction Ltd [2005] ABC LR 12/21 at 91, May LJ stated that a ‘perfect and complete knowledge of the ground may be impossible to achieve’. Also see Julian Bailey, What Lies Beneath: Site Conditions and Contract Risk, (Society of Construction Law 2007).

50 See, eg, Sub-Clause 4.12 of FIDIC.

51 [2019] HKCFI 916; HCCT 4/2018 (9 April 2019).

52 Henry Tang, Construct for Excellence: Report of the Construction Industry Review Committee (2001), p 79.

 

Eugenio Zoppis is a PhD researcher at King’s College London. He can be contacted at eugenio.zoppis@kcl.ac.uk.

 

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