Conducting an on site inspection and issuing an inspection certificate is a critical part of an engineer’s role. The inspection certificate will be relied upon by the client to ensure that works have been properly carried out. They may also rely on the on site inspection in deciding whether to make payment to the contractor.
In this legal guide, our contract lawyer will dive into site inspections and certification obligations of engineers. We will discuss the law in this space, and the significance of safety in design. We will also highlight the importance of quality assurance, address the challenges of scope management, and offer practical insights on how to manage risk.
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A design is only as good as the work that follows it. In design, engineers may outline measurements, site boundaries, interfacing works, construction steps and limitations. Understandably, things that are set out in the design documents can get lost in translation or worse, ignored altogether.
If this happens, it is the engineer’s duty to check during the on site inspection. Importantly, engineers should also be responding to RFI’s in a timely way and communicating to the contractor or other consultants in a clear and unambiguous way. If there is room for misinterpretation, there is also room for errors which may come back on the engineer because they failed to bring this to the attention of the other parties.
The site inspection should identify construction defects. The engineer can then categorise those defects based on severity and type, and assess their impact. The engineer can then compare these findings with project plans, building codes and standards (and the design documents) to pinpoint deviations.
A report (even if it is just a short email) detailing each defect, supported by visual evidence and references to relevant codes should be provided, along with the inspection certificate. The inspection certificate can refer to the email or the defects noted within the certificate.
Depending on the severity of the defect, the engineer should communicate the findings clearly and quickly, emphasising the urgency of rectification for safety and compliance. Ideally, this should be accomplished both during the on-site inspection and in the inspection certificate. It is also advisable to follow up to ensure that corrective actions are taken – take a proactive approach.
An engineer is bound to exercise due care, skill and diligence. They are not required to have an extraordinary degree of skill or the highest professional qualifications but must bring to the task a level of competence and skill that is usual among engineers practising their profession. If an engineer fails to exercise care and the client suffers damage as a result, the engineer is liable to the client.
An engineer, as an independent professional, may be liable to their client for damages arising from issuing a negligent inspection certification. The engineer must discharge its decision-making functions fairly, reasonably, impartially and honestly. The engineer must form opinions objectively and not simply adopt the views of the client. It is ultimately a matter of arriving at the right decision in the circumstances, as opposed to a decision that defaults to advancing the interest of the client.
The “obligation to warn” arises when a party is aware or should be aware of risks that could lead to foreseeable harm. It requires them to provide clear and accurate warnings to those who might be affected.
Failure to fulfil this duty can result in legal liability if harm occurs due to the lack of proper warning. This emphasises the importance of proactively communicating risks. On the other hand, it is important not to ‘sit on your hands’. If you see an issue, call it out.
In certifying works, an engineer needs to act in the interests of the principal and keep in mind the obligations of subsequent owners.
If an engineer negligently certifies incomplete or defective work and as a result:
the principal overpays the contractor or becomes obliged to do so; or
suffers some other loss as a result of works being certified in circumstances where they should not have,
the Employer may recover the damages caused by the engineer’s breach of contract. The case is even stronger if the incorrect certification is the result of fraud.
Engineers need to act in a fair and unbiased manner in issuing inspection certificates and make decisions in a way that strikes a balance between the principal and the contractor.
An engineer will have a client to whom they are contracted and from whom they receive payment. This can add a level of pressure to carry out a site inspection in a way that meets the demands of the paying customer. Engineers need to resist this pressure and cast aside the influence of relationships, payment and future opportunities.
Here are some examples of why it is important to strike this balance when carrying out a site inspection and issuing inspection certificates:
If an engineer independently and honestly but negligently issues an inspection certificate, the employer must still pay that amount. Such negligence would entitle the principal to institute legal action in contract and tort against the engineer.
The engineer may be liable to the contractor for damages if it makes any careless and incorrect statement about the conditions for the work in a situation that implies that the contractor may rely on them. For example, the engineer could be liable if it advised the contractor of its conclusions about the conditions of the site, without giving the contractor the detailed results of those investigations so that it could draw its own conclusions. Liability may also arise if the engineer misled the contractor as to the difficulty of the works by negligent design criteria for the permanent works set out in a tender document.
An engineer could be held liable for wrongfully certifying under the Competition and Consumer Act 2010 (Cth). In the absence of case law authority determinative of this issue, such a claim may be difficult. The reasons why include:
whether the Engineer’s certifying role is conduct “in trade or commerce”;
whether it could be misleading or deceptive conduct to perform a contractual obligation in the precise terms in which it agreed that obligation would be performed;
whether the issue of the certificate actually has the potential to mislead or deceive; and
whether the Contractor’s loss can be characterised as “by” the Engineer’s misleading or deceptive conduct.
In this case, the Court held a design engineer liable for loss suffered by a property developer by relying on an erroneous certification of a structurally defective raft slab. This was despite the fact that the design engineer was not directly contracted by the developer.
Because the Developer had no contract with the Engineer, it decided to bring a claim of misleading and deceptive conduct under the former equivalent of section 18 of the Competition and Consumer Act 2010 (Cth)) against the engineer.
The structural engineers provided certification that the raft slab used for the development complied with the Building Code of Australia. A year into construction, it was found that contrary to the certification provided by the engineer, the raft slab used was defective. This resulted in the suspension of works. This subsequently led to the developer defaulting under its loan facility. The bank then exercised its right to sell the partially completed development. You can read the full judgment of the Court of Appeal here.
The certificate must precisely define its scope. This must be done in a way that makes everyone aware of what has and has not been certified. All engineering certifications must be limited to what the certifying engineers knows. It should not speculate or draw unfounded conclusions.
Engineers must ensure the inspection of the work that is being certified. And they must satisfy themselves that work has been completed in accordance with the plans and specifications when they are certifying building works.
The level of inspection required will depend on the requirements of the project and good engineering practices. In this regard, professional judgement is required. What would a reasonable and competent engineer, taking into account all relevant facts, do? What would they outline in the inspection certificate?
Engineers may delegate inspection to an engineer that is junior or (in the regulated States) someone who is not a registered engineer. However, the registered engineer must exercise their judgement to determine if the person to whom they have delegated the inspection function is competent to undertake the inspection. Ultimately, the registered engineer takes full responsibility through their certification for site inspections undertaken by others.
Engineers must approach a site inspection with attention to detail. This is done by reviewing what has been constructed with what was required by the relevant documentation.
Thoroughly review project plans, specifications, and relevant documents prior to attending site.
Prioritise safety as an overarching principle during a site inspection. Adhere to safety protocols, including through appropriate use of personal protective equipment and completing site inductions.
Documentation forms the foundation of any legal defence. Accurately document your observations, measurements, and findings regarding the inspection. Contemporaneous notes (notes the engineer took at or around the time of the inspection) as well as visual evidence in the form of photographs are key to proving that an engineer discharged their duty of care in performing the on site inspection.
Maintain transparent and real-time communication with stakeholders involved in the project. Ensure that all parties remain informed about potential non-compliance or defects in the project and do not delay in providing notice that there may be issues. If an engineer delays in communicating issues, construction may continue to progress and it may become more challenging to fix identified problems.
Maintaining strict scope control is vital to preventing scope creep and ensuring inspections remain within your professional competence. Avoid activities beyond your expertise. This means avoiding verbal comments during an on site inspection, sending emails or issuing an inspection certificate that:
comments on architectural works (unless there is an interface with your engineering work)
offers advice to the contractor about resolving an issue with a chosen product
offers advice to the contractor about how to apply a product
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