Contractor not liable following tunnel collapse

by White & Case LLP

White & Case LLP

A recent Scottish case absolved a contractor from liability for the collapse of a tunnel as part of a hydroelectric scheme. This was because the contractor exercised reasonable skill and care, and did not guarantee the fitness for purpose of its works including the tunnel.

SSE Generation Ltd v Hochtief Solutions AG [2016] CSOH 177

The Glendoe Hydro Scheme, located above Loch Ness in the Highlands of Scotland, is the biggest scheme for the generation of hydro-electric power to be built in Scotland for many years.

In 2009, only eight months after take over, a collapse occurred in the main tunnel. This put the scheme out of commission resulting in a significant loss of revenue whilst the parties were in dispute over responsibility for the remedial works.

The collapse was caused because the contractor had assumed the existence of a certain type and quantity of rock in the tunnel, and so did not install adequate support to prevent it from collapsing. A main point in the dispute was whether the contractor's obligation was:

  • One under which it warranted the fitness for purpose of the works as completed. If so, the contractor would be liable for the tunnel collapse. The employer argued that the contract (an NEC2 form) imposed a fitness for purpose obligation because "defect" was defined as "a part of the works which is not in accordance with the Works Information", and the contractor was liable for "defects" in its works. The tunnel collapse meant that a part of the works was not in accordance with the Works Information.
  • One under which the contractor promised only to use reasonable skill and care in performing its works. In this scenario, the contractor would not be liable for the failure of the scheme without more. The employer would need to prove that the contractor failed to use reasonable skill and care in performing the works. The contractor argued that it was only obliged to use reasonable skill and care, on the basis that the Contract provided that "The Contractor is not liable for Defects in the works due to his design so far as he proves that he used reasonable skill and care to ensure that it complied with the Works Information".

The judge (Lord Woolman) decided that:

  • The contractor did not guarantee that the works would be fit for purpose, but had assumed a lesser obligation of reasonable skill and care.
  • Based on the information available to it at the time, the contractor satisfied its obligation of reasonable skill and care. The contractor's assumptions regarding the condition of the ground were reasonable in the circumstances, even though the ground conditions turned out to be worse than anticipated.


This case highlights two important matters under common law contracts.

First, it brings into sharp focus the critical distinction between "strict" fitness for purpose obligations and the less onerous obligation of using reasonable skill and care. On the facts of this case, if a fitness for purpose obligation was agreed, it would render the contractor liable for the effects of ground conditions that it could not reasonably have anticipated. Some procurement models may require a contractor to take the risk of such matters, but often contractors are reluctant to accept the risk, especially in projects that involve tunnelling where there are many "unknowns". Fitness for purpose obligations are often prohibitively expensive to insure for contractors too.

Secondly, if a contractor is subject to an obligation to use reasonable skill and care in performing its works, it will be judged according to the information available at the time it performed the works. In this case, the employer sought to rely on evidence of the ground conditions obtained after the tunnel collapse to try to demonstrate what the contractor ought to have anticipated. But judging what the contractor ought to have anticipated is not undertaken with the benefit of 20/20 hindsight. It is determined according to contemporary knowledge, technology and practices.

A contrast with other legal systems

SSE v Hochtief provides an illustration of the workings of the common law in relation to construction contracts, and demonstrates how the parties' agreement on risk allocation is paramount. By contrast, in many other jurisdictions contractors, engineers and architects are sometimes subject to strict obligations imposed by statute or general law that cannot be avoided.

For example, UAE Civil Code Article 880 imposes a mandatory obligation that a contractor and supervising architect (and/or engineer) are jointly liable to compensate an employer for a period of ten years where a building suffers a total or partial collapse, or there is a defect which threatens the safety and stability of the building. This obligation to compensate the employer will arise even if the defect or collapse arises out of a defect in the land. Therefore, where the collapse is a result of unanticipated ground conditions, there is no consideration of reasonable skill and care, nor does it matter whether the contractor could have expected the adverse conditions. Thus, if the UAE Civil Code applied to the facts in SSE v Hochtief, the contractor would have been held liable to the employer simply because there had been a tunnel collapse. This highlights, yet again, the necessity of considering construction and engineering contracts in their particular legal context.

Click here to download PDF.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© White & Case LLP | Attorney Advertising

Written by:

White & Case LLP

White & Case LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.