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GAZETTE
MARCH1986
problematic than actions in contract. The Report
concludes (d) that "There is scope for evolution of
insurance policies ... but any radical solution must take
full account of the likely ability of the insurance industry
to respond at acceptable levels of premiums" because of
the risk in construction of familiar failures such as multi-
storey precast buildings or long span box bridges.
This Report will be required reading for all concerned
with latent defects because it sets out the range of
insurances normally available in a standard-form building
contract in a simple way and suggests where these could
be improved to give greater cover. But more importantly
it deals with the three insurance methods already available
to provide a basis for latent defects protection insurance.
These methods are (1) latent damage insurance cover held
by the user of the building or (2) a form of guarantee
insurance on the various elements of the building such
as structure of windows held by the main contractor and
(3) as project liability insurance held by each member of
the building team whether their business was to design,
supply, fabricate, deliver, erect or construct. This third
arrangement would combine consultants professional
indemnity insurance with contractors/sub-contractors
defects liability insurance by including under one
umbrella the products liability insurance on goods
supplied and fitted into the building as well. These three
methods of insurance provide different kinds of cover for
(1) the user and (2) the building itself and (3) the building
team in a complementary way which the Report suggests
could be a foundation for latent defects protection
insurance. If there is a criticism of this excellent Report
to be made it arises from one proposed definition of the
word "defect" itself. This relates (p.l 1) a defect to "Any
feature ... which detracts from ... fitness for
purpose".Such a definition incorporating a standard
related to fitness for purpose is an invitation to extend
litigation because "fitness for purpose" is a legal concept
demanding a higher acceptance of design responsibility
for the building than the prosaic everyday meaning the
words suggest.
In
Morgan
v.
Park Developments
Carroll J advanced
a constitutional principle against a plaintiff losing his
cause of action before he knew he had one. But is it
breach of constitutional rights for a plaintiff to lose his
cause of action before he knows he has one? Would this
principle be upheld as a general unconditional statement
of law in an appeal to the Supreme Court? It is arguable
that it would not.
For instance, an interesting comparison arises in the
Statute of Limitations 1957 si3 relating to adverse
possession. Carroll J in
Morgan
v.
Park Developments
Ltd.
stated that "Whatever hardship there may be to a
defendant in dealing with a claim years afterwards, it
must be less than the hardship to a plaintiff whose action
is barred before he knows he had one. The latter
interpretation appears to me indefensible in the light of
the Constitution". The Statute of Limitations 1957
however already contains situations where in certain
circumstances a person can lose not just their right to sue,
but their right of ownership of land itself with regard to
land held through the doctrine of adverse possession. An
example of this can be seen in the case of
Murphy v.
Murphy
8
a decision of Costello J. in the High Court
and affirmed without dissent in the Supreme Court.
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