We take a look at some of the potential issues when procuring projects via construction management.
The recent case of Vitsoe Ltd v Waugh Thistleton Architects Ltd [2025] EWHC 850 (TCC) is a reminder of some of the particular issues which can arise when procuring projects via construction management.
Many projects are procured on the basis that there is a single or “main” contractor, typically either:
- “Traditional” procurement – where the employer appoints a design team to develop the design and a main contractor to construct the project in accordance with that design, possibly with the contractor undertaking some additional development of the design (referred to in JCT contracts as the “contractor’s design portion”).
- Design and build procurement – where, as the name suggests, the main contractor takes responsibility for both the design and the construction of the project. Responsibility for early-stage design work by the professional team will be transferred to the main contractor who will need to verify the work for which it is assuming responsibility.
With both procurement routes, the main contractor may then appoint various specialist subcontractors to assist with different elements of the construction of the project and the main contractor’s design work – for example to deal with work packages such as structural steelwork, precast concrete, cladding, roofing, fire protection, air-conditioning, mechanical and electrical works, glazing, etc. As indicated above, the main contractor’s scope of work will vary from project to project but, whatever the extent of that responsibility, it will all “fall under one roof” (i.e. the contractor’s).
While these routes are widely used by – and popular with – employers and their funders, they are not without their critics. In particular design and build procurement is sometimes criticised from a contractor perspective as “design and dump”, a term used to reflect the fact that such contracts are sometimes used to transfer a lot (too much?) risk to contractors by involving them relatively late on in the design process, combined with the use of extensive schedules of amendments to standard JCT contract terms.
In contrast, an employer using construction management to procure a project will contract with:
- A team of designers to carry out the design work.
- A construction manager to manage the construction of the project.
- A team of specialist trade contractors to carry out the work which may, for example, include some of the work packages listed above.
The key difference is that whereas a main contractor takes responsibility for the construction of the project (and possibly some or all of the design) and engages the trade contractors itself (so they become the main contractor’s subcontractors), a construction manager only manages the trade contractors – it does not appoint them. Instead, the trade contractors are appointed by the employer directly.
The construction manager will usually be appointed under a contract requiring it to provide management services and will be subject to a duty of care, e.g. to use skill, care and diligence when performing the services, but the construction manager may not be responsible for performing any design or construction work itself.
The perceived advantages of construction management – particularly by experienced employers – is that its flexibility can bring benefits in terms of time and costs, in particular because the design and construction of the project can progress in tandem so that a “buildable” solution can be achieved within the employer’s budget. One potential downside, particularly from the perspective of the employer’s legal advisers and its funders, tends to be the piecemeal contractual structure with less overall responsibility (particularly as compared with design and build procurement) which can manifest itself through no overall responsibility for the quality of the design and the works, and/or a lack of certainty as to timescale and cost.
The Vitsoe case concerned water damage to a timber building which occurred during the construction phase. Ordinarily one might expect the project’s lead designer to advise on how the building should be protected from the weather and possible water damage during the construction phase. For example, in another recent case – Sky UK Ltd v Riverstone Managing Agency Ltd [2023] EWHC 1207 (Comm) – the court concluded that the decision as to whether a temporary roof should be erected was a design decision falling within the responsibility of the architect, rather than the main contractor.
However, in the Vitsoe case, the court decided that although the architect was the leader of the design team, the construction management procurement route meant that the construction manager had responsibility for coordination and overseeing the employer’s interests. It is likely that conclusion came about because in this particular case the construction manager’s responsibilities were expressly stated to include protecting the works and managing the site, with the trade contractors being required to protect their works while under construction.
The decision should give some comfort to employers (and their funders) using construction management (i.e. that the more piecemeal nature of this procurement route doesn’t won’t necessarily mean that certain tasks and duties ending up “falling between two stools”) but, just as importantly, it highlights the need to ensure that the scope of work for every party engaged on a project is set out in clear and sufficient detail so each party understands what it needs to do, thereby reducing the risk of disputes arising as to where a particular responsibility lies. In some cases, a responsibility matrix can be a good idea, particularly where there are actual or potential overlaps between the responsibilities of different parties involved on a project.
Finally, a brief word about management contracting which should not be confused with construction management. Management construction is a different procurement route whereby the employer appoints a management contractor alongside the professional team to develop the design of the project. The management contractor (rather than the employer) appoints – and then manages – the trade contractors to carry out the work but does not carry out the work itself.
If you have any questions or would like assistance with the above, please contact the team at [email protected]
