Commercial Construction - Legal Query

[jonty101]

Hi Everyone. I'll try to keep this as to the point as possible.

We have recently undertaken some commercial air conditioning installation works. The job concluded at Christmas 2015 and since then we have returned to site a handful of times in early 2016 to complete snagging works.

Last week we received a letter stating that were being sued for a sum of £200k for incorrect installations. They have provided a detailed report and there are some areas where we appear to have installed incorrectly/against manufacturer's guidelines. The client has employed another company to carry out the rectifying works, their costs totalling a sum of £200k.

However, at no point from when we completed the snagging works in early 2016 were we ever contacted about these incorrect installations. If we were contacted, we would have returned to site to rectify, and could have even provided the client with extended warranties on the kit. We were never told that anything was wrong with our installation, or that another company would be brought in if we did not rectify.

My question is, is it legal for the client to do this, or are they supposed to give us an opportunity to put things right? Like I say, we had zero contact from them whatsoever until the letter arrived last week detailing all of the rectifying works that had been carried out without our knowledge. I suspect it is a total stitch-up, as surely if they wanted us to put things right they would have been threatening us with court action if we did not attend site to rectify.

Any information would be helpful. Many thanks

[R0b]

Well first of all, this is a commercial arrangement so was there a written contract and if so, what does it say about breaches?
If there's no written contract then it could be difficult but I guess your argument would be they ought to have raised the issue with you first and put you on notice rather than going ahead and getting works done and then putting you on notice.

Also, did the letter come from the client or their solicitors? Did it actually say that you are going to be sued for £200k? Do you any legal expenses insurance to cover you in situations like this?

[jonty101]

Thanks for your reply Rob.

There was a contract sent through to us with our order, but it was not signed by us. The contract does not mention the procedure for defective works.

And yes the letter came from their solicitors, stating we were being charged for the £200k of remedial works.

[R0b]

Well it would be helpful to see the order and the terms. Sometimes the order will say that it is being placed on their standard terms and you would therefore be bound by them. Given the large sum of money involved you should ideally be looking for some proper independent legal advice or look to see if you have legal expenses cover.

[des8]

Carrying out contracts of this size?
rather than legal expenses insurance you should be looking to your professional indemnity insurance (if you have the cover)

[davenewbergr]

Does the letter say it's a letter before claim (or letter before action)? If so, then you can get some help online but for a possible £200,000 claim you should be taking legal advice. Yes it will cost you a fair bit, but if they've spent £200,000 on repairs they are going to come after you for it.
Generally speaking the customer had a duty to mitigate its loss, and by contracting with someone else to do the work for £200k and only then telling you about it, it has failed in that duty. But that doesn't get you off the hook entirely.