ABSTRACT
As the title of this chapter indicates, it deals with the topics of responsibility and liability. We explain the logical transition from decision-making to risk; from risk to responsibility for those who have been allocated the risks; and then to potential liability. The flow from liability to indemnity to insurance is also discussed. Each of the following terms is defined: responsibility, liability, indemnity and insurance. It should be noted that the difference between responsibility and liability is highlighted and discussed, since these two terms are often used interchangeably and quite often the colloquial use of the terms is confused.
This chapter continues with an analysis of the laws of liability, particularly with reference to both contractual liability and the law of negligence, which is important for those involved in construction. The differing levels of liability, as well as how these levels are determined, are set out in a lengthy and detailed analysis of important court decisions in both contract law and the law of negligence. Furthermore, the topic of fitness for purpose is discussed together with its insurance characteristics. This chapter concludes with a discussion on the role of insurance in construction.
