A substantial number of homeowners carry insurance against all manner of misfortunes that may befall their property, including a policy designed to protect them from litigation by a third party, or to enable them to pursue legal action against a person or business who they hold responsible for any contractual issues that may arise during a home improvement contract. This insurance policy is the first thing they reach for in the event of a dispute with someone who has carried out work for them, and they deem to be remiss in some way.
A typical scenario may involve a landscaping project, that has failed to meet the customer’s requirements in some way. The works as carried out were not satisfactory or constructed not in accordance with specification. A patio, for example, may not have sufficient falls, leaving puddles following rainfall, or trip hazards due to uneven laying. Artificial grass installations with edges that are not properly secured, allowing the wind to lift and ripple the matting. These and a host of other problems may result in a complaint, with the customer seeking recompense or reparation.
Not only physical construction problems may become litigious – late performance, colour variations or discolourations in products, failing to provide a promised statement (phrases such as a ‘WOW!’ factor), promised but not delivered in the eyes of the customer may also become the subject of a Court’s claim for compensation. Such cases are referred to their insurance companies with a view to making a claim on their policy.
Such referrals, however, are not automatically granted by the insurance company.
First of all, the claimant must ensure that the matter under dispute is actually covered by their policy. It is never a foregone conclusion that the existence of a household policy – even with ‘legal cover’ – will allow for something as obscure as a phrase used during a negotiation or sale discussion, unless it is specifically included in the text of the contract and backed by written and specific words in the contractors Terms & Conditions. In other words, the promised results of the contract are written in an express (rather than implied) manner and subsequently contravened.
The next step in the decision-making chain, from the customer making a claim on their insurance policy, is to make a clear and concise presentation to their insurance company. Once they have all of the information they need, they will send it on to their solicitors (or legal department) for appraisal. Having examined all of the written ‘evidence’, the solicitor will usually call for an independent expert witness report, produced to Civil Procedure Rules Part 35 (2015). Such a report may be called for and organised by the insurance company/solicitor or on occasion, by the customer themselves, with their permission.
Having obtained an expert witness report (who must be a recognised independent, with a known and approved industry background, not simply another contractor or ‘friend’) and delivered it to the insurance solicitor, a set of qualifications is applied, with the solicitor seeking to decide the likelihood of success, or balance of recoverability, which in effect means the likely success of making a claim against the contractor.
Various factors now come into play. First of all, the background and financial affairs of the contractor are investigated, by making various enquiries from sources such as Companies House, to establish the degree of success (or otherwise) of starting proceedings against an individual or firm. If the records show that the company has no funds, and is likely to fail because of a default such as late presentation of tax returns etc, the insurance company may decide that there is no point instigating expensive legal action, and advise the customer of that fact. In essence, not recommending taking legal action as the cost would be prohibitive, and the chances of gaining any compensation too low to warrant spending any money on proceedings. The threshold for such action or decision making is 51%. 51% and above, the insurers will take action. Below that, and they will probably decline.
A surprisingly high percentage of contractors do not have a known address, or any company details, publicly available beyond a media presence or account. Projects valued at tens of thousands of pounds are agreed and accepted without the customer having any idea of who they are dealing with! Only a mobile telephone number and Face Book page. Therefore, trying to identify them needs the services of a private detective – something an insurance company is unlikely to bear the cost of employing.
There is, however, anther set of circumstances that make legal action less likely, and should reduce the number of claims. Some clients do not seem to care how much they spend on making claims, even spurious ones. They seek only to ‘punish’ the contractor for daring to upset them by failing to regard their demands.
Provided that the contractor maintains an accurate and comprehensive paper trail during every aspect of a contract or project, including records of decisions agreed, Contract (Design Management) Regulations plans up to date, and especially any variation orders, with detailed minutes of any meetings, including those persons identified as being present, dates and times of such meetings and agreed outcomes, all signed off by both parties, the likelihood of any such litigation diminishes with every word.
Any claim going through an insurance company (and thereby their legal team) is likely to fail even the first hurdle, especially under the 51% threshold, if the claimant is neutered by a full and accurate records of a project’s progress, step by step, day by day during the works.
By due diligence, and keeping control of a project – and the customer – at all times rarely sees a landscape scheme become litigious.
