The Underlying Problem: Negotiating the Ground Conditions Issue

Ellis Baker and Michael Turrini

March 2013

A paper presented to the Society of Construction Law at a meeting in London on 6th November 2012

The allocation of risk for ground conditions continues to be a contentious issue, and one which standard forms deal with in different ways, against a background of the relevant general law of contract and the freedom it gives parties to allocate this risk themselves. Ellis Baker and Michael Turrini reconsider the issues in the light of the current FIDIC Books, the Silver Book in particular seeking (contentiously, from a contractor's viewpoint) to place this risk on the contractor in ways which the Red and Yellow Books do not. The paper looks specifically at the use of FIDIC in countries in the Middle East and North Africa: here many national civil codes are influenced by French law (often via Egypt), imposing a mandatory regime of liability for construction defects; and some governments (for example Abu Dhabi) have chosen to modify FIDIC forms for their own procurement purposes. The paper ends with advice on the careful consideration of ground risk issues at the time of preparing and negotiating the contract.

Introduction - Background: the issue - Common law approach - The Middle East and North Africa - Accuracy of ground conditions information - Contractual provisions for unforeseen ground conditions - 'Owners would not sign such a covenant' - Contractual effect of allocation under English law - Ground conditions disputes: their nature and how they occur (Modern examples - Ground conditions and other claims - a case study) - Conclusion.

The authors: Ellis Baker MA, LLM, solicitor, is a partner and head of the Construction and Engineering Practice Group at the London office of global law firm White & Case; he is also lead author of FIDC Contracts: Law and Practice and Michael Turrini BA LLB, solicitor, is a partner in the Doha office of White & Case.

Text 40 pages.