presentation on tort-construction

7/21/2019 Presentation on Tort-Construction

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Law of Torts and theLaw of Torts and theConstruction IndustryConstruction Industry

Mohit SarafMohit Saraf

PartnerPartner

Luthra & Luthra Law OfficesLuthra & Luthra Law OfficesNew Delhi and MumbaiNew Delhi and Mumbai

Email: [email protected]: [email protected]


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Structure of the PresentationStructure of the Presentation

Torts: OverviewTorts: Overview

Torts: Relevance for ConstructionTorts: Relevance for Construction

ContractorsContractors Torts: Basic Principles affectinTorts: Basic Principles affectin

Construction ContractorsConstruction Contractors

Torts: !efenses and Stratey aainstTorts: !efenses and Stratey aainstTortious Lia"ilityTortious Lia"ility


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Tort: Meaning and OverviewTort: Meaning and Overview

Denotes a breach of dut im!osed b lawDenotes a breach of dut im!osed b law

Nature of the Dut: To act as a reasonableNature of the Dut: To act as a reasonable!erson e"ercising reasonable diligence!erson e"ercising reasonable diligence

Tort e"ceeds the obligation of a !art underTort e"ceeds the obligation of a !art undercontract: the dut could be to the othercontract: the dut could be to the other!art in a contractual relationshi!#!art in a contractual relationshi!# as wellas well

as to an third !art who# it is reasonablas to an third !art who# it is reasonablforeseeable# would get affected b theforeseeable# would get affected b theactions of a !erson.actions of a !erson.


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$onstituents of Tort$onstituents of Tort

There must be a wrongful act committed bThere must be a wrongful act committed ba !erson.a !erson.

The wrongful act must give rise to a legalThe wrongful act must give rise to a legal

damage or actual damage.damage or actual damage. The wrongful act must be of such nature asThe wrongful act must be of such nature as

to give rise to a legal remed in the form ofto give rise to a legal remed in the form of

an action for damages.an action for damages.


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Tort: %elevance forTort: %elevance for

$onstruction $ontractors$onstruction $ontractors $onstruction $ontracts should be watertight$onstruction $ontracts should be watertight

to !rovide com!lete framewor& for liabilitto !rovide com!lete framewor& for liabilitbetween the !arties.between the !arties.

Tortious liabilit would therefore be limitedTortious liabilit would therefore be limitedto the categor of liabilit to a third !art.to the categor of liabilit to a third !art.

'adl drafted construction contracts can'adl drafted construction contracts can

o!en tortious liabilit between the !arties#o!en tortious liabilit between the !arties#since there can besince there can be concurrent liabilitconcurrent liabili

tunderunderboth tort and contract.both tort and contract.


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Tort: %elevance forTort: %elevance for

$onstruction $ontractors( )*+$onstruction $ontractors( )*+ T!es of TortiousT!es of Tortious

actions relevant foractions relevant for

$onstr. $ontractors:$onstr. $ontractors:

NegligenceNegligenceNuisanceNuisance

Tres!assTres!ass

Other relevant legalOther relevant legal

!rinci!les under Tort!rinci!les under Tort

law:law:

,bsolute -iabilit,bsolute -iabilitStrict -iabilitStrict -iabilit

icarious -iabiliticarious -iabilit


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NE/-0/EN$E: Princi!le inNE/-0/EN$E: Princi!le in

Donoghue v. StevensonDonoghue v. Stevenson You must take reasonable care to avoid acts orYou must take reasonable care to avoid acts or

omissions which you can reasonably foreseeomissions which you can reasonably foresee

would likely to injure your neighbor. Who thenwould likely to injure your neighbor. Who then

in law is my neighbor?persons who are soin law is my neighbor?persons who are soclosely and directly affected by my act that Iclosely and directly affected by my act that I

ought reasonably to have them in contemplationought reasonably to have them in contemplation

as being so affected when I am directing myas being so affected when I am directing my

mind to the acts or omissions which are called inmind to the acts or omissions which are called in

uestion.!uestion.!


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ST,ND,%D O5ST,ND,%D O5

D6T7 TO T,8E $,%ED6T7 TO T,8E $,%E The degree of dut of care is that of an ordinar !rudentThe degree of dut of care is that of an ordinar !rudent

!erson.!erson.

E"ce!tions: )i+ if a !erson is highl s&illed about aE"ce!tions: )i+ if a !erson is highl s&illed about a!articular business # the law would hold him guilt of!articular business # the law would hold him guilt of

negligence in failing to use such e"!ert s&ill# )ii+ if anegligence in failing to use such e"!ert s&ill# )ii+ if a!ersons holds himself out as being s!ecificall com!etent!ersons holds himself out as being s!ecificall com!etentto do things re2uiring !rofessional s&ill# he will be heldto do things re2uiring !rofessional s&ill# he will be heldliable for negligence if he fails to e"hibit the care and s&illliable for negligence if he fails to e"hibit the care and s&ill

of one ordinaril an e"!ert in that business.of one ordinaril an e"!ert in that business.

$onformit with the general and a!!roved !ractices could$onformit with the general and a!!roved !ractices couldgenerall lead to an inference in favor of the defendant.generall lead to an inference in favor of the defendant.


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#oreseea"ility Principle as applied "y#oreseea"ility Principle as applied "y

Courts to Construction ContractorsCourts to Construction Contractors

, builder of defective !remises ma be liable in, builder of defective !remises ma be liable innegligence to !ersons who thereb suffer in1urnegligence to !ersons who thereb suffer in1ur

, designer or builder owes a dut of care to all !ersons, designer or builder owes a dut of care to all !ersonswho might be reasonabl be e"!ected to be affected bwho might be reasonabl be e"!ected to be affected bthe design9construction of the !remises. The dut is tothe design9construction of the !remises. The dut is tota&e reasonable care that such !ersons would not sufferta&e reasonable care that such !ersons would not sufferin1ur as a result of the faults in thein1ur as a result of the faults in thedesign9construction of !remises.design9construction of !remises.(Anns v. London e!ton(Anns v. London e!ton

"u!ough# $%&&e!s v. L%ve!'ool Coun%l)"u!ough# $%&&e!s v. L%ve!'ool Coun%l) Owners dut to ensure that the !remises are safe canOwners dut to ensure that the !remises are safe can

be discharged b a!!ointment of com!etent !ersons tobe discharged b a!!ointment of com!etent !ersons tounderta&e the tas& of doing so.underta&e the tas& of doing so.


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TO%T0O6S -0,'0-0T7 5O%TO%T0O6S -0,'0-0T7 5O%

NE/-0/EN$ENE/-0/EN$E De!ends on facts of the case. $ourts canDe!ends on facts of the case. $ourts can

ta&e cogni;ance of new fact situations.ta&e cogni;ance of new fact situations.

un%o! "!oo*s v. +et%h%,un%o! "!oo*s v. +et%h%,Owners remedOwners remedunder tort law against sub(contractors forunder tort law against sub(contractors for

laing down defective floor. Damage to thelaing down defective floor. Damage to the

floor was a direct and foreseeable result offloor was a direct and foreseeable result of

sub(contractors negligence.sub(contractors negligence.


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N60S,N$E:N60S,N$E:

Meaning and %elevanceMeaning and %elevance 33Nuisance4 is anthing done to the hurt orNuisance4 is anthing done to the hurt or

annoance of the lands or tenements of anotherannoance of the lands or tenements of another

and not amounting to tres!ass. 0t is an old cause ofand not amounting to tres!ass. 0t is an old cause of

action that is losing its relevance in light ofaction that is losing its relevance in light ofdevelo!ments in Environment laws which im!osedevelo!ments in Environment laws which im!ose

greater and more certain liabilit in relation togreater and more certain liabilit in relation to

damage to ad1oining lands9!ro!ert.damage to ad1oining lands9!ro!ert.

Nuisance are of two &inds: )i+ !ublic nuisance andNuisance are of two &inds: )i+ !ublic nuisance and

)ii+ !rivate nuisance.)ii+ !rivate nuisance.


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P6'-0$ ,ND P%0,TEP6'-0$ ,ND P%0,TE

N60S,N$EN60S,N$E Public Nuisance is an act causing an commonPublic Nuisance is an act causing an common

in1ur# danger or annoance to the !ublic# andin1ur# danger or annoance to the !ublic# and

does not create a right for civil action in an onedoes not create a right for civil action in an one

!erson. 0n 0ndia# remed under Section )ii+ Disturbance

of right to su!!ort# )iii+ Esca!e of deleterious substancesof right to su!!ort# )iii+ Esca!e of deleterious substances

into anothers !ro!ert# etc.+into anothers !ro!ert# etc.+


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T%ESP,SS: 'asic Princi!lesT%ESP,SS: 'asic Princi!les

Positive act of interference or entr# howeverPositive act of interference or entr# howeverslight# onto the !ro!ert of another.slight# onto the !ro!ert of another.

0gnorance of the boundaries will be no e"cuse in0gnorance of the boundaries will be no e"cuse in

an action for tres!assan action for tres!ass Slightest violation of a boundar will be a tres!ass#Slightest violation of a boundar will be a tres!ass#

)e.g.: !lacing ob1ects on another !ersons land# driving)e.g.: !lacing ob1ects on another !ersons land# drivingnails into his wall# using it to su!!ort scaffolding# ornails into his wall# using it to su!!ort scaffolding# orleaving a ladder# !lan&s or a shed or !iling rubbish+.leaving a ladder# !lan&s or a shed or !iling rubbish+.

Tres!ass e2uall includes a violation of the airTres!ass e2uall includes a violation of the airs!ace above the another !ersons land# at a heights!ace above the another !ersons land# at a heightwhich would interfere with an use of his land.which would interfere with an use of his land.


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OT?E% P%0N$0P-ES O5OT?E% P%0N$0P-ES O5

-0,'0-0T7-0,'0-0T7

,bsolute -iabilit,bsolute -iabilit

Strict -iabilitStrict -iabilit

icarious -iabiliticarious -iabilit


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,'SO-6TE -0,'0-0T7: %ule laid,'SO-6TE -0,'0-0T7: %ule laid

down b Su!reme $ourt of 0ndia in thedown b Su!reme $ourt of 0ndia in the

-leu& as Lea* Case-leu& as Lea* Case here an enter!rise is engaged in a ha;ardous orhere an enter!rise is engaged in a ha;ardous orinherentl dangerous activit# the enter!rise isinherentl dangerous activit# the enter!rise isstrictl and absolutel liable to com!ensate all thosestrictl and absolutel liable to com!ensate all thosewho are affected b the accident and such liabilit iswho are affected b the accident and such liabilit isnot sub1ect to an e"ce!tions.not sub1ect to an e"ce!tions.

The enter!rise cannot esca!e liabilit b showing itThe enter!rise cannot esca!e liabilit b showing ithad ta&en all reasonable care and there was nohad ta&en all reasonable care and there was nonegligence on its !art.negligence on its !art.

This !rinci!le# however# has been rarel a!!liedThis !rinci!le# however# has been rarel a!!liedsince it was formulated.since it was formulated.


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ST%0$T -0,'0-0T7: %ule inST%0$T -0,'0-0T7: %ule in

%land v. 5letcher%land v. 5letcher //0he 'e!son who o! h%s own 'u!'ose !%ngs on0he 'e!son who o! h%s own 'u!'ose !%ngs on

h%s land and ollets and *ee's the!e an4th%ngh%s land and ollets and *ee's the!e an4th%ng

l%*el4 to do &%sh%e % %t esa'es &ust *ee' %t %n atl%*el4 to do &%sh%e % %t esa'es &ust *ee' %t %n at

h%s 'e!%l# and % he does not do so %s '!%&a a%eh%s 'e!%l# and % he does not do so %s '!%&a a%eanswe!ale o! all the da&age wh%h %s the natu!alanswe!ale o! all the da&age wh%h %s the natu!al

onseuene o %ts esa'eonseuene o %ts esa'e.4.4

The liabilit under this rule is strict and it is noThe liabilit under this rule is strict and it is no

defense that the thing esca!e without that !ersonsdefense that the thing esca!e without that !ersons

willful act# default or negligence or that he had nowillful act# default or negligence or that he had no

&nowledge of its e"istence.&nowledge of its e"istence.


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ST%0$T -0,'0-0T7: E"ce!tionsST%0$T -0,'0-0T7: E"ce!tions

Onl a!!licable when non(natural use of landOnl a!!licable when non(natural use of land

Not a!!licable when:Not a!!licable when:

A the esca!e of the ob1ect was due to act of /odthe esca!e of the ob1ect was due to act of /od

A the esca!e was a result of an act of a stranger# orthe esca!e was a result of an act of a stranger# ordefault of the !erson in1ureddefault of the !erson in1ured

A the thing was !resent with the consent of the !ersonthe thing was !resent with the consent of the !ersonin1ured or for common benefit of !erson in1ured.in1ured or for common benefit of !erson in1ured.

A it is the conse2uence of an act done for !ublicit is the conse2uence of an act done for !ublic!ur!ose in the discharge of a !ublic dut under the!ur!ose in the discharge of a !ublic dut under thee"!ress authorit of a statute.e"!ress authorit of a statute.


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%EMED0ES 5O%%EMED0ES 5O%

TO%T0O6S ,$TTO%T0O6S ,$T ,ction for Damages,ction for Damages

0n1unction0n1unction

S!ecific restitution of a !ro!ert )in anS!ecific restitution of a !ro!ert )in anaction for detention of !ro!ert+action for detention of !ro!ert+

%ecover of land )in cases of wrongful%ecover of land )in cases of wrongful

dis!ossession+dis!ossession+


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ME,S6%E O5 D,M,/ESME,S6%E O5 D,M,/ES

Determined on facts and circumstances( burden of !roof onDetermined on facts and circumstances( burden of !roof onin1ured !art.in1ured !art.

$om!ensator Damages which# so far as mone can$om!ensator Damages which# so far as mone cancom!ensate# will give the in1ured !art re!aration for thecom!ensate# will give the in1ured !art re!aration for the

wrongful actwrongful act Pecuniar loss: ,ctual e"!enses# loss of earningsPecuniar loss: ,ctual e"!enses# loss of earnings

Non(!ecuniar losses# e.g.# !ain B suffering.Non(!ecuniar losses# e.g.# !ain B suffering.

Damages for Nervous Shoc&Damages for Nervous Shoc&

Nominal Damages awarded where no substantial harmNominal Damages awarded where no substantial harmcaused. ,ction to establish a legal right.caused. ,ction to establish a legal right.

E"em!lar Damages to deter a !art from similar conduct.E"em!lar Damages to deter a !art from similar conduct.


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D5ENSES B ST%,TE/0ES TOD5ENSES B ST%,TE/0ES TO

M0T0/,TE -0,'0-0T7 )=+M0T0/,TE -0,'0-0T7 )=+ Effective watertight contracts that allocates ris&sEffective watertight contracts that allocates ris&s

between $ontractor and Owner of a Pro1ect9Site.between $ontractor and Owner of a Pro1ect9Site.

$lear !rovisions for handing over of wor&s and$lear !rovisions for handing over of wor&s and

transfer of ris&s to Owner once $ontractorstransfer of ris&s to Owner once $ontractorsobligations are com!leted.obligations are com!leted.

Provisions for 0ndemnit b Owner for third !artProvisions for 0ndemnit b Owner for third !artclaims. Onl e"ce!tions: /ross negligence or wilfulclaims. Onl e"ce!tions: /ross negligence or wilful

misconduct of $ontractor.misconduct of $ontractor. Obtaining all re2uired statutor clearances# andObtaining all re2uired statutor clearances# andcom!liance with a!!licable laws# also !rovides acom!liance with a!!licable laws# also !rovides amitigation against !otential tortious claims.mitigation against !otential tortious claims.


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D5ENSES B ST%,TE/0ES TOD5ENSES B ST%,TE/0ES TO

M0T0/,TE -0,'0-0T7 )*+M0T0/,TE -0,'0-0T7 )*+ $ost of ade2uate insurance should be covered in$ost of ade2uate insurance should be covered in

cost of contract. Provision to be made for Thirdcost of contract. Provision to be made for ThirdPart -iabilit insurance B 'uilders ,ll %is&Part -iabilit insurance B 'uilders ,ll %is&0nsurance as Pro1ect Owners res!onsibilit.0nsurance as Pro1ect Owners res!onsibilit.

$ontractors right to be an additional insured in$ontractors right to be an additional insured in!olicies ta&en out b the Pro1ect Owner.!olicies ta&en out b the Pro1ect Owner.

Owners insurance !olicies to !rovide for waiver ofOwners insurance !olicies to !rovide for waiver of

subrogation in favor of $ontractor.subrogation in favor of $ontractor. $ontractor should also re2uire from all of its$ontractor should also re2uire from all of itssubcontractors insurance with the same coveragesubcontractors insurance with the same coverageand limits as it agrees to with the Owner.and limits as it agrees to with the Owner.


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STEPS TO M0T0/,TESTEPS TO M0T0/,TE

-0,'0-0T7-0,'0-0T7 5acts are critical in tortious cases. $ontractors should5acts are critical in tortious cases. $ontractors should

therefore maintain clear records of activities and obtaintherefore maintain clear records of activities and obtainOwners agreement to the records on regular basis.Owners agreement to the records on regular basis.(.g., 7n la!ge 8C Cont!ats th%s %s done th!ough(.g., 7n la!ge 8C Cont!ats th%s %s done th!ough

wee*l4&onthl4 '!og!ess &eet%ngs)wee*l4&onthl4 '!og!ess &eet%ngs).. The s!ecific defenses against tortious claims areThe s!ecific defenses against tortious claims are

tailored to the facts of each case and are based ontailored to the facts of each case and are based onchallenging the basis of liabilit:challenging the basis of liabilit:

$ausation$ausation%emoteness 5oreseeabilit%emoteness 5oreseeabilit

0ntervening ,cts or events0ntervening ,cts or events

Mitigation of Damages not ta&en b Plaintiff.Mitigation of Damages not ta&en b Plaintiff.


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Than$ %ouThan$ %ou

presentation on tort-construction

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