Case Illustration on Avoidance of Adverse Effect of Defective Appraisal Result

source：　 date：2014-06-16　 author：

[Key Points]

It is common practice that in a case where parties have dispute over the cause of a quality problem, the court will appoint a third party appraisal firm to investigate, and the results of such appraisal are decisive. Here is a case handled by us that we, through our professional analysis, persuaded the judge to make new decisions on the causes of the accident, and saved loss for client.

[Basic Facts]

Corp. L as the Contractor and Corp. C as the Employer concluded a construction contract on the maintenance of foundation pit of a project. Due to some factors out of expectation, after the completion of maintenance work and during the following earthwork, there was water leakage and sand drifting. Employer hired other companies to make rectification and later, the problem became more severe, causing collapse of roads, breakage of water and gas pipes, and the cracks of walls of a neighbor building.

Corp. C brought lawsuit to court claiming against Corp. L the indemnification for the loss in the amount of RMB 10.82 Million. Corp. C applied to have judicial appraisal on the quality level of the foundation maintenance works and whether there was causation between the quality problem and damages.

The conclusions of the appraisal were: 1. There was quality problem in the works, and 2. The causes of the damages are a. the quality problem, b. when the problem was discovered, rectification works were not proper.

The court of first instance determined based on these appraisal conclusions that both Corp. C and Corp. L were at fault in the accident, and considering the factors as mentioned in the appraisal report, the court decided each company bears 50% of the liabilities.

We represented Corp. L in the appeal instance.

[Our work]

The Appraisal Report was the core evidence in the case and thus our work focused on the details of the Report.

Firstly, we found the defects of the Report. Actually it was a faulty one. 1. It was not clear who did the defective works; 2. It was not clear who should be responsible for failure to do rectification works; 3. The wording in the appraisal conclusions was mostly “probable” rather than decisive.

Secondly, the basis to make the Report is not sufficient. 1. The design drawings were not considered. 2. The Employer’s liability for the unlawful dismembering of the project was not considered. 3. The supervising company’s liability was not considered too. 4. The earthwork contractor whose improper acts were the direct cause to the accident, was not mentioned in the Report.

For the above reasons, we applied for supplementary appraisal to reduce the adverse effect of the original Report. We also questioned the expert witness of the appraisal firm and that engaged by our client.

[Judgment]

The appellate court decided that the earthwork contractor and the employer shall bear the majority of all liabilities. We saved loss of a million for our client.