The Supreme Court has taken a new line on whether a contractor is liable if he causes damage to – for example – an adjacent property during construction or demolition work. Even if a contractor has taken all the necessary precautions, and has built carefully, he may still be liable if damage occurs “at the neighbor’s house.
Until now, the basic principle has been that a contractor is only liable for damage to third parties if the contractor has not acted carefully. If the contractor investigated the risks well in advance and took precautions, and performed the work carefully, the contractor is not liable if the neighbors suffer damage.
Thus, the owner of a property adjacent to the construction site cannot always recover the damages he suffered from the contractor. He must show that the contractor should have done more research and taken more precautions given the risks. Or that the contractor should have performed the work more carefully
The Supreme Court now sees this differently: even if the contractor has been careful on all fronts, he is still liable if damages occur. On the face of it, there is no immediate reason for this change of direction by the Supreme Court. However, it was already clear prior to carrying out the work that, even when taking precautions and working carefully, there was a substantial risk that the adjacent property would be damaged.
In its ruling, the Supreme Court points out that the owners of surrounding properties are the only ones who do not benefit from the construction work. The contractor’s client gets a nice building, the contractor gets his money, but the owners of neighboring properties are left empty-handed. The Supreme Court apparently does not think it is fair that owners of nearby properties are left alone with the pieces. The Supreme Court points out that the contractor must insure himself for these damages.
The Supreme Court’s ruling has since received much criticism. For now, however, contractors and subcontractors will have to make do with this ruling.
