Determining who is responsible for “developing” or “completing” design on a construction project can make the difference between a profitable job and a costly dispute.
In modern construction projects, even where the employer provides a developed design, it is rare for the contractor or subcontractor to simply “build what is drawn”. Many forms of construction contract will require a degree of design development by the contractor – but the line between legitimate development and additional design (which should be treated as a variation) is not always clear. The difference can determine who bears the cost of redesign, delay, or performance failures. This distinction can have major consequences for cost, time and liability, particularly where the contract wording has been heavily amended, as is almost always the case in practice.
In practice, design development involves progressing an outline or conceptual design into a detailed, buildable solution. By contrast, a design change (often referred to as a variation) involves altering what was originally specified or required, and may entitle the contractor to extra time or money. The challenge lies in distinguishing one from the other — a question that sits at the heart of many construction disputes.
What counts as design development?
Design development refers to the process of taking the employer’s or consultant’s design and producing the further detail necessary to allow construction in line with the design specification or brief. Examples include preparing fabrication or installation drawings from outline designs, coordinating services layouts to suit site conditions, and adding technical details (such as fixings or joints) that the designer has deliberately left for the contractor to resolve.
The critical point is that most contracts place this type of responsibility firmly on the contractor as part of its basic scope. It is not a change, even if it involves a significant amount of technical input. Problems arise, however, when employers or their consultants stretch the definition of “development” to cover what is really new or corrective design.
When does design development become additional design?
Difficulties often emerge where the employer’s requirements are not fully defined, or where changes are instructed mid-project or where the employer/design team want to control the design that is within the Contractor’s responsibility to define. Additional design, which should entitle the contractor to a variation, usually arises in cases such as:
- Where the employer changes the design intent – for example, requiring a different cladding system than the one originally specified.
- Where the information provided is incomplete or defective – the contractor is asked to “fill gaps” that go beyond development and amount to redesign.
- Where new performance obligations are introduced – such as fire rating, acoustic, or sustainability requirements that were not apparent from the original documents.
- Where design responsibility is shifted without agreement – for instance, when a subcontractor is told to take on structural design that was assumed to be provided by others.
In these circumstances, the contractor may have grounds to argue that the additional design falls outside its design development obligations and should be valued as a variation. However, under many amended contracts, employers try to remove this argument by wording the design obligations so broadly that any “errors, inconsistencies, or divergences” in the Employer’s Requirements are deemed to be the contractor’s risk. This is a significant amendment to the JCT position, but it is increasingly common in practice.
In essence, the distinction often turns on entitlement: design development is part of the contractor’s base scope and risk, whereas a design change typically involves an alteration to the employer’s requirements and may entitle the contractor to time or money — provided the change is properly instructed and evidenced.
Common grey areas and risks for contractors
The boundary between design development and additional design is often blurred. Employers and contract administrators may expect contractors to “sort out the detail” at no extra cost, while contractors maintain they are being asked to carry out new design. Disputes commonly arise over whether the Employer’s Requirements were sufficiently defined at tender stage, whether the contractor priced on the basis of developing rather than producing a complete design, and whether more defined design choices by the Employer or consultant post-contract are part of the development process or changes.
Standard forms take differing approaches to this issue. Under the JCT Design and Build 2016 form, a “change” (Clause 5.1) is expressly defined as an alteration to the employer’s requirements — something that typically triggers variation rights. By contrast, resolving inconsistencies or completing the design to make it buildable normally falls under the contractor’s design development duties, with no additional entitlement. NEC3 and NEC4 contracts take a similar approach: only a formal instruction that changes the scope amounts to a compensation event, whereas refining or clarifying the contractor’s own design does not. Under the FIDIC Yellow and Silver Books, the same distinction arises between an Engineer’s instruction and a formally instructed variation under Clause 13.
The risk is amplified where the contract has been amended to push responsibility for inconsistencies in the Employer’s Requirements back onto the contractor. Under the unamended JCT, there is scope to argue that ambiguities or discrepancies should be treated as employer risk, but amended wording often transfers this liability. Contractors must therefore read carefully: what might appear to be a normal design development obligation may, in fact, conceal a wholesale transfer of liability for gaps and errors in the employer’s design.
Without careful drafting and clear records, contractors risk being left responsible for design that was never priced, never contemplated, and in some cases, never insurable.
Case law guidance
The courts have had frequent opportunities to examine where design responsibility lies, and the outcomes underline how much turns on the exact wording. A notable example is Skanska Construction v Egger Ltd, where the contractor successfully argued that an instruction to provide a second water main went beyond design development and amounted to a change. However, the same case confirmed that detailing steelwork within the original design intent remained within the contractor’s development risk. The case demonstrates how closely courts analyse whether an instruction alters the underlying design intent or merely develops it further.
- ICI v Henry Boot Construction (UK) Ltd [2005] EWCA Civ 1081 – “Development” obligations can extend to a fitness-for-purpose standard where drafting requires it.
- Co-operative Insurance Society Ltd v Henry Boot Scotland Ltd [2002] EWHC 1270 (TCC) – Design and workmanship obligations can sit side by side, widening contractor liability.
- Pearce v Baxter [1999] 66 Con LR 108 – Contractors undertaking to “complete” elements of design may assume more responsibility than anticipated.
- Royal Brompton Hospital v Hammond [2001] EWCA Civ 550 – Clarified allocation of responsibility between consultants and contractors.
- Speymill Contracts Ltd v Baskind [2010] EWCA Civ 1201 – Liability can creep in where contractors respond to informal instructions or scope drift without notices.
- MT Højgaard v E.ON [2017] UKSC 59 – Courts will enforce contractual wording even where it imposes unexpected design risk. This is particularly relevant to fitness for purpose obligations that may still be implied even where the conditions state the responsibility is for reasonable skill and care.
Together, these cases highlight the courts’ consistent focus on the precise terms of the contract, not assumptions of fairness or intent.
Practical steps to manage design responsibility
- Understand the boundaries of your design responsibility – identify whether you are developing an existing design or expected to produce or modify it.
- Clarify assumptions at tender stage – record whether pricing assumes design development only, and highlight where additional design would require a variation.
- Check the contract’s variation and design clauses – note how ‘change’, ‘variation’, or ‘compensation event’ are defined in JCT, NEC, or FIDIC forms.
- Engage early with consultants and the employer – to confirm where design completion responsibilities sit and avoid scope drift.
How CCC can help
Our construction contract consultants assists contractors, subcontractors, and employers with drafting and reviewing construction contracts to ensure that risk allocation is accurately recorded and contractual documents are properly incorporated. We advise on managing inconsistencies between tender clarifications and contract terms, and we provide strategic guidance on resolving document incorporation disputes. Whether you are entering into a new contract or dealing with a dispute over risk or interpretation, we can help safeguard your commercial position. We also deal with disputes where issues such as this have arisen and help parties to navigate resolutions to the problems posed by this.
