Who's at fault?

In January Lafarge Cement Uk announced that the alkali content of cement produced at its Westbury plant in Wiltshire between September 2002 and December 2004 was higher than the mean alkali value that it had declared. Instead of being classified as “high alkali” cement it was misrepresented as “moderate alkali” cement.

High alkali cement increases the risk of a damaging alkali-silica reaction (ASR) in concrete. This particular form of degradation occurs when minerals that occur in some aggregates react with the alkali to form a gel.

This gel can absorb moisture over time, causing it to swell, which may in turn crack the concrete. High alkali cement alone will not lead to ASR – reactive aggregates and a source of moisture must also be present.

This particular case raises a number of difficult legal issues about responsibility and liability for any concrete made with this wrongly classified cement. Although blame would seem to lie with the cement supplier, contractors and sub-contractors may have some liability.

Contractor Liabilities

For example, there may have been a breach of the express and/or implied terms of the building contract (and any warranties) due to the contractor using concrete supplied with a higher than specified alkali content. This raises the question of whether the contractor is liable for negligence, and in this case, the client or building owner may be entitled to redress irrespective of the risk of ASR occurring.

There are also questions as to whether the contractor is under a legal duty to warn the client or owner of the risk. Even if there is no such legal duty, there may be good reasons for the contractor to give a warning anyway, although issuing a warning may mean extra work and cost for the client or owner as they seek to check the situation and mitigate their losses.

The client or owner needs to check any limitation period for brining claims against the contractor, and likewise the contractor needs to know if there is a limitation period for passing those claims on to the concrete supplier. To complicate matters, such latent defects may be covered by special rules extending the limitation periods and these periods may change once the risk of damage has been disclosed.

Supplier Guarantees

Moving on to the concrete supplier, it is important for the contractor to check what guarantees or warranties have been made by the supplier, and what sort should be given in light of the new information. How long these remain enforceable is important, and it may be appropriate to take immediate steps to seek indemnities from the concrete supplier.

Contracts with the concrete supplier may include exclusion or limitation that leave the contractor exposed, but the validity of these clauses can be challenged. If the concrete was supplied to a sub-contractor, all these points will need to be checked again to see which party is liable.

In any case, there may well be insurance issues, and contractors need to consider whether they notify their insurers.

The final question is whether the client, building owner and/or contractors have the right to take direct action against the cement producer. In this particular case that might be appropriate given that the British Cement Association's Internet site states that the alkali test data was deliberately misreported.

Action

Risk assessments should be carried out by clients, building owners and contractors. The contractor will need to check with ready-mixed concrete whether any of their cement was sourced from Lafarge's Westbury works. If so, there needs to be confirmation from the suppliers that the alkali content of all cement matches the specification.

If the alkali content of any concrete supplied is higher than that specified it will be necessary to obtain full details of the loads in question. Independent expert and legal advice will need to be sought and the terms of any relevant insurance policies must be checked. Insurers must then be notified.

Contractors should request that the supplier and/or the producer give an indemnity against any costs incurred in investigating the technical and legal consequences, including those in respect of claims that may be made by clients or building owners. It may also be worth passing relevant on to the clients or building owners in order that they may seek appropriate advice, carry out any necessary testing and set up an inspection programme.

Pinsent Masons is advising a number of contractors on this matter and will be preparing a report on the various legal issues raised. If your company would be interested in obtaining a copy of our report please let your usual contact know.