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Decennial liability under the Qatari civil code

Oct 10, 2007
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Main contractors and design consultants are liable, without fault, for the cost of rectifying structural defects that appear in a building or structure within ten years of handover ("Decennial Liability").┬  This is the effect of Article 711 of the Qatari Civil Code, Law No. 22 of 2004 (the "Civil Code").

Although contractual liability (eg. for negligent design or defective workmanship) continues under local law for a period of fifteen years<1>, Decennial Liability pursuant to article 711 of the Civil Code is strict; it is not necessary to prove any negligence or breach of contract.

The key points to note about Decennial Liability pursuant to article 711 of the Civil Code are:

no fault is necessary in order for liability to arisetrigger events are total or partial collapse of the building and/or a defect threatening the stability or safety of the structurecontractors and consultants are jointly and severally liableliability attaches notwithstanding that the collapse or defect is caused by sub-surface conditions or that the building owner approved the defective workclaims for compensation must be commenced within three years of the collapse or discovery of the defect (article 714 of the Civil Code)buildings or structures, the life cycle of which is less than ten years, attract liability for the duration of that life cycleagreements purporting to exclude Decennial Liability are void (article 715 of the Civil Code)contractors/consultants are unable to pass the risk of Decennial Liability down to its subcontractors/ sub-consultants.A consultant that has prepared designs but has not administered the construction contract is liable only for design errors, not for defective workmanship (article 712 of the Civil Code). Overseeing the construction phase results in the consultant being jointly and severally liable with the contractor for design and workmanship.┬  Although the local courts may be prepared to apportion liability between the contractor and consultant and between the main contractor and its subcontractors, each of them will be liable to the building owner regardless of where the fault, if any, lies.

The trigger events for liability "partial or structural collapse" and "defects threatening the stability or safety of a structure" are not defined in the Civil Code. As a result, disputes over the interpretation of these phrases are likely if a substantial liability turns on questions such as what amounts to a "partial or total structural collapse" or whether a defect poses a threat to the stability or safety of a structure.  This and other uncertainties arising out of the application of Decennial Liability will have to be resolved on a case by case basis.

Decennial Liability falls outside the scope of the standard cover provided by Contractors' All Risks and Professional Indemnity insurance and, therefore, is generally uninsured.┬  In some jurisdictions, notably France and Egypt, from which the principle of Decennial Liability has found its way into the Qatari Civil Code, specific insurance is mandatory.┬  Risk under such insurance schemes is usually managed through an independent design and supervision consultant, whose role includes vetting the engineering designs prior to construction and performing periodic site supervision for the purpose of auditing standards of construction on site.┬  Approval of the finished building by the independent consultant is required before the insurance cover becomes effective.

Consultants carrying professional indemnity insurance may be surprised to learn that this will often not be adequate to cover the risk presented by Decennial Liability.┬  First, the level of indemnity must be sufficient to meet the losses caused by a structural defect, including one caused, for example, by sub-surface conditions.┬  It is not unheard of for such defects to result in a structure having to be demolished and rebuilt.┬  Secondly, and perhaps more significantly, many Professional Indemnity policies provide cover against negligent errors and omissions only.┬  As Decennial Liability arises without evidence of negligence, it is by no means certain that such policies will respond to such claims.

The increasing value, complexity and speed of projects in Qatar raises an ever greater chance that a contractor and consultant will be unfortunate enough to accrue a liability pursuant to article 711 of the Civil Code without fault.┬  This prospect should be sufficient to cause Decennial Liability to feature in risk assessments and mitigation conducted by consultants and contractors on such projects.

For further information on this topic of construction/engineering legal problems, please contact: Michael Grose Michael.grose@clydeco.ae or Laura Warren laura.warren@clydeco.com┬ 

<1>┬ The interpretation of statutory limitation periods under Qatar law is subject to some debate.┬  Article 219 of the Civil Code states that liability for an "unlawful act" (which may or may not include one of negligence) expires three years from the day the injured party becomes aware of the loss or fifteen years from the commission of the unlawful act, whichever is sooner.