2022-06-21（273）Engineering law and the ICE Contracts

2. CONTRACTOR’S LIABILITY FOR DAMAGE TO PROPERTY “OTHER THAN THE WORKS FOR WHICH INSURANCE IS REQUIRED UNDER CLAUSE 21”. This new exception clears up a possible muddle between cls. 20 and 21 in the 4th edition of these Conditions. ff

3. “SURFACE OR OTHER DAMAGE TO LAND BEING THE SITE”. Refer to N. 5.

4. DIVISION OF LIABILITY UNDER THIS CLAUSE. A third party who suffers injury or damage may proceed against either or both employer or contractor, but under this clause if the employer is sued he has a right of indemnity from the contractor “against all losses and claims for injuries or damage to any person or property whatsoever…”, except in the cases set out in para. (b). If the employer is sued in any case falling within para. (b) (i) to (iv) he must pay the compensation without any right of indemnity from the contractor.

Unfortunately the position in the most important case of liability resulting partly from an act or neglect or breach of statutory duty of the employer and partly from the act or neglect of the contractor is expressed in an extremely confused way. Para. (a) implies that the contractor indemnifies the employer proportionately, by saying that the contractor’s liability to indemnify the employer is “reduced proportionately to the extent that the act or neglect of the Employer…may have contributed to the said loss, injury or damage”. 

Para. (b) on the other hand says that the contractor has no duty at all to indemnify the employer against “any compensation or damages for or with respect to…(v) injuries or damage…resulting from any act or neglect or breach of statutory duty…by the Engineer or the Employer”, etc. The expected explanation that para. (v) only applies where the employer’s act, etc., is the sole cause of the injury or damage is not open because of subcl. (2). However, the opening words of para. (b)—“nothing herein contained shall be deemed to render the Contractor liable…to indemnify the Employer”—at least do not take away the statutory right to a contribution from the contractor in the case where the contractor is partly responsible for injury or damage (p. 95).

If it is the contractor who is sued by the third party, in any case falling under para. (b) the employer has the duty to indemnify him against any compensation awarded, subject under para. (2) to a proportionate reduction in the indemnity for any contributory act or neglect of the contractor.

There are other difficulties about the detailed drafting of this clause in respect of division of liability. Sub-cl. (1) (a) mentions “loss” but not “breach of statutory duty”, but the reverse is the case in para. (b) (v) and sub-cl. (2). As to recovery by the employer of losses see N. 1. The words “to the extent neglect…of the Employer…contributed to” injury or damage, etc., vary from the statutory words which allow a contribution in the  case of damage jointly caused so far as may be “just and equitable having regard to the extent of that person’s responsibility for the damage” (see p. 95 above). It is difficult to see that this whole elaborate clause as it now stands produces any improvement on the division of liability that would be made by statute if this clause were left out altogether. gg

Claims for injuries or damages will be brought by third parties against the employer or contractor or both in the courts, but disputes between the employer and contractor about apportionment of liability under this clause are subject to arbitration under cl. 66. It is likely that in appropriate cases the courts will refuse to enforce the arbitration clause and have the rights of all the parties decided by a court at one hearing (p. 404, N. 42).