Unpaid but still liable

Words:
Alistair McGrigor

Advising a friend, for free, still involves a duty of care, says the Court of Appeal

A recent court case involving the liability of a professional designer performing free services for friends, caused a lot of anxiety when it was first decided. Although no fees were levied for their services, the judge found that the designer could potentially owe a duty of care to the friend for whom the services were performed. That case has now been appealed, giving a clearer picture of the test for finding a professional liable in such circumstances.

Lejonvarn, the designer, was providing architectural and project management services for a garden landscaping project. One crucial aspect of this case is that, as well as being friends with the clients (the Burgesses), Lejonvarn had provided professional services for the Burgesses on several previous occasions. The case was quite different from those situations where professionals give brief ad hoc advice to friends in an informal situation. Here, Lejonvarn was providing a professional design and project management role to her friends, even though she wasn’t paid in the early stages.

The dispute arose over whether Lejonvarn had properly kept control of the cost and quality of the project. There was no contract between the parties, and so any claim would be for negligence. What should be the test for whether a professional in these circumstances owes a duty of care to its clients?

What should be the test for whether a professional in these circumstances owes a duty of care to its clients?

This is important because only certain types of negligence allow a claimant to recover ‘pure economic loss’, that is, recovery of losses from damage to the structure itself. If a building project has defects, but no contract exists, it is only by satisfying the tests for ‘pure economic loss’ negligence that the claimant can recover the costs of putting right those defects.

Lejonvarn argued in the appeal that it was not enough for the first judge simply to have considered whether Lejonvarn had assumed responsibility for her advice – he should also have considered whether it is fair, just and reasonable to impose a duty of care. However, the Court of Appeal held that in circumstances like these, where there is no contract but the situation is akin to having a contract, there is no need for a separate consideration of whether it is fair, just and reasonable. In this case, the professional had voluntarily offered professional services, knowing that the Burgesses would rely upon them.

Another limb of Lejonvarn’s appeal was that, although deciding there was no contract between the parties, the judge had decided that Lejonvarn had a duty to perform services. Importantly, tort (including negligence) cannot impose positive duties on parties to do certain things (like a contract can), but instead it can only impose a negative duty to prevent a party from doing something, or doing it badly. The Court of Appeal decided against Lejonvarn here, stating that Lejonvarn did not have a duty to provide any such services, but to the extent that she did, she owed a duty to exercise reasonable skill and care in the provision of those services.

Lejonvarn did not have a duty to provide any services, but to the extent that she did, she owed a duty to exercise reasonable skill and care in the provision of those services

Interestingly, the Court of Appeal also compared how duties of care are imposed differently as between a builder, a professional and a design and build contractor. It had been put forward by Lejonvarn that it would be anomalous to find that she owed a duty of care in relation to the garden project, whereas the builders engaged to actually carry out the garden works did not owe a duty of care. The distinction arises from the fact that builders carry out works but do not provide the professional services also needed for a project, whereas Lejonvarn was a professional and therefore her clients would rely on the professional services that she provided.

This distinction was then contrasted by the Court of Appeal with the duties which would have been imposed by a design and build procurement route originaly considered by the Burgesses. The court pointed out that if someone is offering a design and build ‘one stop shop’, that person will be liable for the defective works and the roles of supervision and design, regardless of who in fact carried them out. By contrast, Lejonvarn’s work involved a division of labour with different parties responsible for different tasks, with her described and actual role being to provide professional services as an architect and project manager.

Architects should therefore be conscious of the possibility of owing a duty of care, even where performing services for no fee and for a friend, if it’s clear that the friend will be relying on those services.

Alistair McGrigor is partner at CMS


In Plain English: Contra proferentem

When interpreting clauses in documents, the contra proferentem rule is an over-arching test that essentially states that where there is doubt about the meaning of the contract, the words will be construed against the person who puts them forward.

The person who put them forward may literally mean the party who drafted the contract, but frequently in relation to clauses excluding liability, it means the person seeking to rely upon the clause. Courts will use the contra proferentem rule to try and alleviate the effects of what might otherwise be broad exclusions of liability. For architects, this will be most relevant where you are seeking to rely on an exclusion of liability in your terms and conditions – any unclear drafting of that exclusion will probably be construed in a manner less favourable to you.

Note however that the rule only applies where there is some doubt as to the interpretation of a clause. If the interpretation is clear, the rule will not apply.

There is a rule to the same effect as the contra proferentem rule enshrined in the consumer protection laws, meaning that if there is doubt about the meaning of a written term, the interpretation most favourable to the consumer will prevail.


 

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