TORTIOUS LIABILITY IN CONSTRUCTION UNDER LAWS

OF UAE AND ENGLISH

Table of Contents

1. INTRODUCTION .............................................................................................................. 1

2. TORT PROVISIONS UNDER ENGLISH LAW ...................................................................... 1

3. TORT PROVISIONS UNDER UAE LAW .............................................................................. 1

3.1. DECENNIAL LIABILITY ...................................................................................................... 2

4. KEY SIMILARITIES AND DIFFERENCE BETWEEN UAE LAW AND ENGLISH LAW .............. 2

4.1. DUTY OF CARE AND DUTY OF PURPOSE ......................................................................... 2

4.2. PURE ECONOMIC LOSS ................................................................................................... 4

4.3. LIMTATION OF LIABITIES OR CONTRACTING OUT OF TORT ........................................... 4

4.4. LIMITATION PERIODS...................................................................................................... 5

4.5. CONCURRENT LIABILITY.................................................................................................. 5

4.6. SUBCONTRACTED WORK ................................................................................................ 6

4.7. CONTRACTS THAT CONFER BENEFIT FOR THIRD PARTY ................................................ 6

4.8. OTHER FACTORS ............................................................................................................. 7

5. PROTECTION TO SUBSEQUENT PURCHASERS ................................................................ 7

6. CONCLUSION .................................................................................................................. 8

7. BIBLIOGRAPHY ................................................................................................................ 9

8. TABLE OF CASES............................................................................................................ 10

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June 2013
 Compare and contrast the treatment of English law and UAE law on
tortious liability for defective construction and design. Which law
provides more protection to subsequent purchasers whose rights are
now affected by defects in the completed project?

1. INTRODUCTION
If the client or third parties suffers damage or loss due to professional negligence by
consultants or contracts, they may be held liable. If these losses cannot be recovered
under their contract, liability in tort becomes important. Tort Law provides remedies for
abused rights or liabilities outside contractual relationships. Provisions and application of
tort law is not the same in every jurisdiction. UAE law and English law are very different
legal systems, however both provide very distinct tort provisions in their body of laws.

In this paper, I will discuss topics such as tort provisions under English Law and UAE
Law, key similarities and differences in these two jurisdictions and make an assessment
to determine which law provides more protection to subsequent purchasers of constructed
properties. For the purpose of this paper, UAE Law is assumed to be the laws as
applicable in the Emirates of Dubai.

2. TORT PROVISIONS UNDER ENGLISH LAW

So that a construction claim in tort can be accepted, the following requirements must be
established - the professional owed a duty of care to the claimant, that duty of care was
breached, the cause of damage was that breach and that the damage falls within scope of
the duty1.

3. TORT PROVISIONS UNDER UAE LAW

Tort in UAE Law is established based on three elements An act or omission, damage
and a causative link between the act or omission and the damage2. Under UAE law, tort
based liability cannot be excluded or limited3. Even though article 296 only refers to

1
F OFarrell Q.C , Professional Negligence in the Construction Field, Keating Chambers
2
Can we really limit liability, Al Tamimi & Co.
3
Article 296 of UAE Civil Code

June 2013 Page 1 of 10

exemption of liability, it can be inferred that it also applies to limitation to tort based
liability4.

3.1. DECENNIAL LIABILITY

According to article 880 5 of UAE civil transaction code, contractors and supervising
engineers are jointly liable for any total or partial collapse of the work that occurs within
ten years from the time the work is handed to the owner, which is known as decennial
liability. Insurance for this provision is not available in UAE, The period of ten years
starts from the time the work is completed and delivered. If the designs are defect free
and if the workmanship is defective, the engineer or architect is still liable if he
supervised the works. On the other hand as per article 881, if the architect was
employed only to making the designs or plans, he will be liable only for any defects in
the plans. The consultant if supervised the works as well, will be jointly and severally
liable with the contractor for design and quality of workmanship. Here severally liable
means it is a duty of purpose.
In case the employer can prove that the contractor has caused him to suffer losses
exceeding the agreed limit of liability, the Judge has wide discretionary power under
UAE law to adjust the agreed upon liability between the parties to match the loss
incurred. This is possible if the employer can show that he had undertaken necessary
mitigation measures and did not let the loss to accrue. However, in practice, Judges are
very reluctant to vary the agreed limits of compensation and the instances where it was so
ruled is very rare. This is mainly due to the fact that freedom of contract is recognized in
UAE and it is preferred not to interfere with freely agreed limits of liability under the
contract.

4. KEY SIMILARITIES AND DIFFERENCE BETWEEN UAE

LAW AND ENGLISH LAW
4.1. DUTY OF CARE AND DUTY OF PURPOSE
Under English Law, the standard of works normally expected from any professional is
reasonable care and skill. It is duty of care and not duty of purpose. It appears that the

4
Can we really limit liability, Al Tamimi & Co.
5
Article 880 of UAE Civil Code

June 2013 Page 2 of 10

designers duty does not actually require achievement of a specific result 6. Except in
contracts where a fitness for purpose element was agreed, the English courts have refused
to imply such an obligation into the contracts of a professional that a specific outcome
will be achieved. This rule was established in the case of Bolam v Friern Hospital
Management Committee7. Package contracts or design & build type contracts may the
only type of contracts where such a fitness for purpose obligation may be implied into the
contract where such an express exclusion is not found8. This is as seen in Greaves & Co
Contracts Ltd. V Bynham Meikle and Partners9.

On the other hand, Decennial liability under UAE Law10 is a strict liability. It is the
liability of main contractors and design consultants for the cost of rectifying structural
damages that appear within ten years of handing over of the project. Therefore, there is
no need to prove fault or negligence by contractor or architect. It is presumed that both
the contractor and the architect are in default when structural strength of the building is
questionable within ten years of delivery.

In a Union Supreme court case11 it was held that if the contractor breached the muqawala
contract or if he has not performed according to the conditions and specifications agreed
with the employer, then he is liable for any resultant damage or loss, whether or not there
was a shortcoming. Only proof of an extraneous cause can negate his liability.

Article 880(2) further states that such decennial liability cannot be waived even if it is
proved the cause of defective land or employers consent to the construction of a
defective building or installation. According to Article 880(2), the contractor is
accountable for unforeseeable physical conditions related to the ground and he has the
duty of inspecting the site.

In short, for liability to arise no fault is necessary. Contractor and the consultant shall be
jointly and severally liable.

6
The scope of designers liability under construction contracts, Construction dispute avoidance newsletter,
number 34, December 2011
7
Bolam v Friern Hospital Management Committee [1957] 2 All ER 118
8
The scope of designers liability under construction contracts, Construction dispute avoidance newsletter,
number 34, December 2011
9
Greaves & Co Contracts Ltd. V Bynham Meikle and Partners [1975] 3 All ER 99
10
Article 880 of UAE Civil Code
11
Union Supreme court case, 125/Judicial Year 1, 2007

June 2013 Page 3 of 10

4.2. PURE ECONOMIC LOSS
In cases of economic loss, it is generally considered that such damages are irrecoverable
under tort against a professional unless the claim can be proved under negligent
misstatements as held in Hedey Byrnev Heller & Partners12. Damages due to negligent
actions cannot be recovered as set out in Murphy v. Brentwood 13 and Department of
Environment v. Thomas Bates14, which was decided on the same day15.

Under UAE Law, the scope of decennial liability covers three types of damages total
collapse of works, partial collapse of works and any defect that questions the structural
integrity of the work16. The so called Pure Economic loss is thus considered recoverable
under tort in UAE.

4.3. LIMTATION OF LIABITIES OR CONTRACTING OUT OF

TORT
In English law, the parties can opt to contract out of tortious liabilities as well as some of
the acts like Contracts Act17. Reduced liabilities as agreed in the contracts are generally
acceptable to the courts.

According to article 88218, any agreement for the purpose of contracting out of decennial
liability or to limit the liability shall be void. In UAE, liabilities under tort are broader
than contractual liability. Tort based liability exposes a party to foreseeable,
unforeseeable and consequential damages19. The only situation where decennial liability
is not applicable is where the constructed property was intended to last less than ten
years20. The contractors liability for major defects is unlimited under the provisions of
decennial liability.

Article 39021 of the UAE Civil Transactions Law allows that contracting parties may in
advance, and subject to the provisions of the law, limit the amount of damages by express

12
Hedey Byrnev Heller & Partners [1964] AC 465 (HL)
13
Murphy v. Brentwood [1991] 1 A.C. 398
14
Department of Environment v. Thomas Bates [1991] 1 A.C. 499
15
F OFarrell Q.C , Professional Negligence in the Construction Field, Keating Chambers
16
Article 880 of UAE Civil Code
17
Contracts (Rights of Third Parties) Act 1999
18
Article 882 of UAE Civil Code
19
Can we really limit liability, Al Tamimi & Co.
20
Article 880 of UAE Civil Code
21
Article 390 of UAE Civil Code

June 2013 Page 4 of 10

provision in the contract or by a subsequent agreement. This may be applicable for
liquidated damages under the penalty clause, but may not apply to decennial liability

4.4. LIMITATION PERIODS

In tort under English Law, a claim need to be raised within three years from the date of
cause of action is accrued which is time the damage is suffered22. Contracting parties can
choose to contract out of limitation periods set out in various acts like Latent Damage Act
193623 , Limitation Act 1980 24 , etc25 . The courts are inclined to uphold the limitation
periods agreed in contract as seen in recent case of Inframatrix investments Ltd v Dean
Construction Ltd 26 . Under the Latent Damage act, a claim under tort must be made
within three years from the date of damage with a 15 year longstop period.

The ten year period of decennial liability is considered as a period of guarantee and not as
limitation period. According to article 883 of UAE Civil Transaction law, the time limit
for claims will be three years from the date of discovery or damage or defect or from the
date such defect should have been discovered.

However, the decennial liability is subject to limitation period, according to article 88327,
claims under decennial liability must be initiated within three years of the discovery of
the defect. Even if the defect appear at the end of the tenth year after completion date,
the owner still have a period of further three years within which he can commence a civil
case in the courts. Thus, it appears that in total the claimant has a total duration of 13
years to claim damages in tort.

4.5. CONCURRENT LIABILITY

There may be situation where the injured party suffers a damage and the defendants
liability exists under both contract and tort provisions. Lord Goff stated in Henderson v

22
Latent Damage Act 1936
23
Latent Damage Act 1936
24
Limitation Act 1980
25
R Wilkinson and R Leckie, Limitation : Some thorny issues, JCT News, February 2012
26
Inframatrix InvestmentsLtd v Dean Construction Ltd [2011] All ER (D) 270 (Jul)
27
Article 883of UAE Civil Code

June 2013 Page 5 of 10

Merrett28 that common law is not against concurrent liability and there is no rule which
restricts the claimant to choose between tortious or contractual remedy.

However in UAE law, the matters may be slightly different. Some court of cassation
judgements ruled that a party cannot claim in both contract and tort, in case there is a
contractual relationship between the parties. However there have been other
contradictory judgements. In theory, a claim can be brought under both or in one of
these29. Each case may be different depending on relevant facts.

4.6. SUBCONTRACTED WORK

Under English law, if the designer or main contractor acts reasonably in selecting a third
party for parts of works or specialist works, the designer or main contractor is considered
to have carried out his duty satisfactorily30. As per rule in London Borough of Merton v
Lowe31 , the designer may not be held liable for accepting advises provided by a sub-
contractor.

Under UAE law, the contractor and architect jointly take the liability even if the damage
is caused by the sub-contractor32.

4.7. CONTRACTS THAT CONFER BENEFIT FOR THIRD

PARTY

In English Law this right is covered under The Contracts (Rights of Third Parties) Act
199933 and in UAE, civil code articles 253 & 254 provide this protection.

Contracts Act 34 significantly reformed the doctrine of privity. The Act enables third
parties to impose terms of contracts which the contracts allows for and that is in their
favor. It provides a range of remedies in cases of breach by the construction professional.

28
Henderson v Merrett [1995] 2 AC 145
29
Law of Tort in the UAE, Al Tamimi & Co.
30
The scope of designers liability under construction contracts, Construction dispute avoidance newsletter,
number 34, December 2011
31
London Borough of Merton v Lowe [1981] 18 B.L.R. 130
32
According to Muqawala provision in UAE Civil Code
33
Contracts (Rights of Third Parties) Act 1999
34
Contracts (Rights of Third Parties) Act 1999

June 2013 Page 6 of 10

Similarly, articles 253 and 25435 is in support of this provision saying that the contract
may confer benefit to a third party and for the third party to exercise this right, the
contract should mention that the contract will be performed for the benefit of such a third
party. However, if the contract confers direct benefits on a third party, he can sue for
breach of contract. Under the decennial liability provision that the third party may sue
being the intended beneficiary. Law No. (27) of 200736 Concerning Ownership of Jointly
Owned Properties in the Emirate of Dubai ensures that the decennial liability can be
availed by the subsequent buyers of building flats or units.

In both English Law and UAE Law, the third party who is not a party to the contract
however must have been identified in the contract somehow, either by name or
description or as a member of a class.

4.8. OTHER FACTORS

It is generally believed that concepts of just rights and fairness do not exist in a common
law nation and conversely it seems that in nation with codified law these are clearly set
out. In English law these principles are not visible whereas in UAE these seem quite
evident in the law.

In addition to tort provisions from the law, contracts in England and UAE bring in
provisions like collateral warranty, assignment, trust of contractual rights etc to stipulate
on third party rights. Even though elements of right to collateral warranty can be seen in
the civil code in UAE, these may be included in the contract for ease of proof.

5. PROTECTION TO SUBSEQUENT PURCHASERS

After analysing different constituent factors of general tort provisions and rights under
English Law and UAE law, it seems that almost all the facts favour the provisions in
UAE law. In other words, UAE law provides subsequent buyers better protection in the
areas of accountability from construction professionals, limitation of liabilities, recovery
of damages and liabilities of designers or contractors for sub-contracted work. Only area

35
Articles 253 & 254 of UAE Civil Code
36
Law no. 27 of 2007 Concerning Ownership of Jointly Owned Properties in the Emirate of Dubai

June 2013 Page 7 of 10

where English law provides better protection is in terms of limitation period which is a
total of 15 years compared to 13 years in UAE. Thus it may be determined that UAE law
provides better protection to subsequent buyers who discovers defect in their property.

6. CONCLUSION
Tort law is very important as it helps to recover damages that occurred as a result of
breach of legal obligations. English law and UAE law have distinct tort provisions.
However it appears that the law is not applied very strictly by English courts and most of
the provisions related to tort can be contracted out. In UAE, tort provisions are a matter
of public policy and these cannot be reduced or contracted out of.

Having considered the above given facts and cases, it can be inferred that UAE law
provides more protection to employers and subsequent purchasers of constructed
property. Only area where English law seems to have a better provision is related to
limitation period where UAE provide a total of 13 years whereas English law caters to a
longstop period of 15 years. In all other aspects that were analyzed, UAE law is seen to
have better coverage and protection.

June 2013 Page 8 of 10

7. BIBLIOGRAPHY

Reports and Articles

Can we really limit liability, Al Tamimi & Co.
Law of Tort in the UAE, Al Tamimi & Co.
OFarrell F Q.C , Professional Negligence in the Construction Field, Keating Chambers
The scope of designers liability under construction contracts, Construction dispute
avoidance newsletter, number 34, December 2011
Wilkinson R and Leckie R, Limitation : Some thorny issues, JCT News, February 2012

Table of Acts and Statutes

Contracts (Rights of Third Parties) Act 1999

Limitation Act 1980
Latent Damage Act 1936
Law no. 27 of 2007 Concerning Ownership of Jointly Owned Properties in the Emirate of
Dubai

U.A.E Civil Laws

U.A.E Civil Transaction Code, Law # 5 of 1985

June 2013 Page 9 of 10

8. TABLE OF CASES

Bolam v Friern Hospital Management Committee [1957] 2 All ER 118

Department of Environment v. Thomas Bates [1991] 1 A.C. 499
Greaves & Co Contracts Ltd. V Bynham Meikle and Partners [1975] 3 All ER 99
Hedey Byrnev Heller & Partners [1964] AC 465 (HL)
Henderson v Merrett [1995] 2 AC 145
Inframatrix InvestmentsLtd v Dean Construction Ltd [2011] All ER (D) 270 (Jul)
London Borough of Merton v Lowe [1981] 18 B.L.R. 130
Murphy v. Brentwood [1991] 1 A.C. 398
UAE Union Supreme court case, 125/Judicial Year 1, 2007

June 2013 Page 10 of 10