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At prefabAUS Offsite26, the Kreisson Principal Lawyer explored how modular delivery divides control over building quality, while leaving builders exposed to the cost of defects.
A bathroom pod develops a leaking pipe. The cause might lie with its designer, manufacturer, component supplier or installer. For the building owner seeking a repair, however, the first call will generally be to the builder. (main image: Kreisson Principal Lawyer David Glinatsis speaking at prefabAUS Offsite26 in Melbourne about liability, defects and the recovery of losses in modular construction.)
Construction lawyer David Glinatsis used that example at prefabAUS Offsite26 to examine a question facing modular delivery: if responsibility for a defect sits with the builder, can the builder recover the cost from whoever caused it?
Glinatsis, Principal Lawyer at Sydney-based Kreisson, presented Gaps, Defects and Disputes – Why Modular Construction Is Different in the conference’s ‘Blind Spots’ plenary program. The event was held in Melbourne on 2–3 September 2026.
Admitted as a solicitor in 1985, he has extensive experience in construction and engineering disputes, including litigation, expert determinations and domestic and international arbitration. He also contributes to UNSW’s Legal Essentials for OffSite Construction course.
When control and responsibility separate
Glinatsis explained that conventional approaches to construction risk often connect the party controlling the work with responsibility for correcting it. A bricklayer who builds a wall badly provides a straightforward example.
Modular delivery can separate those functions across businesses and jurisdictions. A designer establishes the specification, a manufacturer produces the module, a logistics provider transports it and another contractor installs it.
“The point is that the control of the outcome of the project is distributed across the delivery chain.”
Glinatsis distinguished responsibility — who must answer to the building owner — from recoverability, meaning whether that party can recover its costs from others in the supply chain.
“Responsibility asks a simple question: Who answers to the owner?”
For the builder, meeting that responsibility is only part of the problem. Recovering the expense from another participant may depend on insurance, solvency, available assets, evidence and the cost of enforcement.
“So if a builder is ultimately responsible, can the builder recover downstream?”
A contract may identify who is responsible for an activity, but pursuing that party may still prove impractical or unsuccessful.
The handover gap between factory and site
Glinatsis described a “handover gap” encompassing loading, transport, storage and delivery before installation. A module understood to be in good condition when it leaves the factory may arrive with damage whose origin is difficult to establish.
“Did it occur during transport, or did it occur on site? And who is responsible for inspecting it along the way?”
Those questions become more complicated when manufacturing takes place overseas and multiple parties handle the module.
Glinatsis identified contracts as a primary tool for allocating responsibility through this period. Work completed and enclosed in a factory may also be inaccessible on arrival, making earlier inspections and records significant.
How defects can repeat across modular production
Glinatsis distinguished between what he called “craft defects” and “systems defects”.
A craft defect can often be traced to a particular person’s work. A systems defect can extend through several stages of delivery.
“A systems defect may begin with a design assumption, which may be right, may be wrong, and it may be repeated in the manufacturing process, carried through transport, and only become apparent during assembly.”
Repeated production can reproduce the same problem across multiple modules. Evidence needed to establish its cause may remain inside sealed components or in a manufacturer’s records.
“The key point being control over defects has not disappeared. It has spread across the delivery chain.”
That distribution changes how disputes must be investigated. Site photographs and defect lists may tell only part of the story, requiring support from production data, logistics records, BIM information and factory quality records.
“Clearly, the best dispute is one that never has to be reconstructed.”
Glinatsis identified stronger supply chain contracts and insurance suited to production-system risks as areas for attention. Where a builder cannot reliably recover losses from another participant, particularly an overseas manufacturer, he said that exposure needs to be recognised, priced and managed from the outset.
“Modular construction has industrialized production faster than the law has industrialized recourse.”
Find David Glinatsis of Kreisson’s HERE
