Commonly, building disputes reach a position where the building owner considers it is no longer possible to let the builder return to their property to carry out any more work, in the light of past events. There is usually no legal requirement on an owner to invite a contractor to repair its own defective work. Unless there is a Defects Liability Period contained within any contract made with the builder, the person employing the builder is under no obligation to allow the contractor back on site.
If the contractor/builder has no right to return to make good any defects after practical completion, then the building owner’s remedy would lie in seeking damages. But, there is a risk that not all the consequential losses incurred in employing another to do the remedial work may be recoverable. The approach of refusing any opportunity for the builder to remedy the defect therefore bears a risk.
The law generally requires moderation, so where loss is likely to arise and can be avoided, it is expected that action is taken to lessen any loss. In Pearce & High Limited v John P Baxter and Mrs A S Baxter 1999 EWCA civ 789, the Court of Appeal held that the failure to allow the contractor to carry out the repairs, or even to give notice of the defects, may result in the amount of damages recoverable being limited to the amount it would have cost the original contractor to carry out those works.
Difficult as it may be in the heat of a dispute, it is usually practical to allow the contractor to rectify the defect before contemplating incurring costs elsewhere. Both from a practical and commercial viewpoint, the contractor returning to undertake the repairs themselves is likely to cost less. But, if that is not a palatable solution, it is important to be able to demonstrate reasonableness in mitigating loss. There is no fixed rule on how Judges determine whether an owner acted reasonably, as it depends on the context and facts in any given case.
The building owner faced with unresolved defects will normally have the sympathy of the court. HHJ Coulsdon QC in Iggleden v Fairview New Homes (Shooter Hill) Ltd 2007 EWHC 1364 (TCC) : “It would take a relatively extreme set of facts to persuade me that it was appropriate to deny a homeowner financial compensation for admitted defects and leave him with no option but to employ the self-same contractor to carry out the necessary rectification work”
A significant factor that goes to considering the reasonableness of an owner’s conduct in employing another builder, may therefore be the loss of confidence in the competence of the original builder. Akenhead J’s judgment in Oksana Mul v Hutton Construction Ltd 2014 EWHC 1797 (TCC) provides some insight into what might be considered as not failing to mitigate when employing another builder.
Complicated deliberations can however, arise in building disputes. For instance, over what would be the hypothetical cost to the original builder of performing the necessary repair. Measuring what loss was incurred in correcting building defects, when a builder seeks to escape liability, is not always as obvious as it may seem to the householder. Judges must apply the usual principles of causation, remoteness, foreseeability and mitigation of damages.
Early legal advice can prove invaluable in preventing the wrong approach or course of action being taken, and thereby possibly avoiding disputes escalating to an irreconcilable position.