There are many forms of claims in the construction contract. While most are driven by a perceived breach of contract, with the claimant seeking to recover the costs incurred due to the violation, there are also claims due to professional negligence.
Such claims are made in tort, i.e., a claim for general damages under common law in which the claimant is seeking to recover damages caused by the actions of another person. To establish the ability to make such a claim, you will first need to prove that the following principles have been considered or met:
- The defendant has a duty of care to the claimant
- That the defendant has breached that duty of care, i.e., where a contract contains the requirement to use reasonable skill and care and that your position is they have not demonstrated this in the carrying out of their contractual obligations.
- That as a result of such breach, the damage has been caused, i.e., there were repercussions, typically monetary, that you are seeking to recover.
- That you can demonstrate the breach and damage was foreseeable and avoidable. Therefore it is not a case of applying reasonable skill and care, but the breach was simply unavoidable, and it was in fact due to a negligent act.
Claims in contract operate whereby in typical circumstances you have entered into a professional services contract which will, of course, contain the contractual requirements such as the scope, the standard required, by when and the terms of payment etc. The terms of such a professional services contract are usually that one party will deliver services on a fitness for purpose basis or the professional is to exercise reasonable skill and care in performing their duties.
If contracted against a fitness for purpose clause, this is a broader and more demanding obligation in that a specified result must be achieved. Therefore, those providing the services must deliver on this to the absolute letter. If a case is made against reasonable skill and care, then in the event of a claim, it is more open to interpretation and can be more challenging to ascertain a case for negligence on this basis.
The principle of negligence claims
Interestingly, the basis of establishing claims for negligence in tort can be linked to the case of Donoghue v Stevenson , which is widely accepted as the foundation for modern negligence claims.
The particulars of the case were that in 1929 a friend bought a bottled drink for Mary M’Alister or Donoghue. The drink was manufactured by a company owned by David Stevenson, and was purchased by the friend at Wellmeadow Café in Paisley. The bottle was described as being dark opaque glass and was poured into a glass. It was not until the remainder of the bottle was poured that a decomposing snail floated out, which then caused shock and illness to Donoghue. They subsequently brought about a claim for ‘loss, injury, and damage through the fault of the defendant (Stevenson).
However, as the friend has purchased the bottle, the claimant has no direct contract with the drinks manufacturer, and as the friend suffered no ill consequences, there was an inability to bring about direct action. However, as the case proceeded, it was reviewed as to whether the claimant could bring about a case for negligence in tort on the basis the manufacturer owed a duty of care to prevent injury.
Initially, the case was thrown out due to the inability to bring about direct action citing that the manufacturer owed no duty of care to anyone with who they did not have a direct contractual link. Still, the claimant pursued the case and appealed to the House of Lords.
The argument was that as the bottle was sealed, labelled, and dark opaque in nature, it was not possible for a reasonable inspection by the consumer to check if it was safe to drink. Therefore, the manufacturer was liable to ensure the drink was suitable for human consumption, which included employing a safe system of work to ensure that snails could not get inside the bottles. Therefore, the claimant pursued an argument the defendant had failed in their duty of care in this regard.
They also claimed that the snail would have left a slimy trail before it got into the bottle, which would have been evident from a reasonable inspection and therefore entirely foreseeable. In any event, if they wished for such a proper inspection to be carried out by the consumer, they had a duty of care to provide the drink in clear glass bottles, and as they had not, they were unable to claim the consumer should have been aware.
The conclusion was that whilst the court was correct to take the view that there was no direct contract between the manufacturer and the consumer, they had a duty of care. However, such a determination was deemed to too narrow and, having considered the case based on whether the manufacturer had a general duty of care, it was determined that where a manufacturer was selling a product in the market, be it food or drink, they had a duty to the consumer to take reasonable care to ensure the produce did not cause or was likely to cause harm.
If you believe there to be negligence, what should you do?
The details of the claim will need to be established so for example, if the architect or designer specified a particular type of roof tile and fixing which failed and subsequently injured a person, and it was proven that such failure was not as a result of installation, the direct costs incurred as a consequence could be recoverable.
If the damage is concerning property (not personal injury), you will need to prove ownership of such property or that you have title over the land. If you cannot do so, then a claim for losses incurred is unlikely to be successful.
If you are the defendant, you will be keen to understand the history behind the issue to determine the linked series of events from cause to effect so that you can either challenge or accept the liability for damages. Suppose, for example, the issue was known about as a patent defect but not rectified at the time or within a reasonable period or even that the building users knew about it but didn’t raise the issue, and therefore the parties were not afforded the opportunity to rectify the defect. In that case, it is reasonable to deny that you have ultimate responsibility for damages.
As a working example of this, if you consider a building surveyor is instructed to carry out an inspection on a property before a change in ownership and that such report and findings are used in the valuation of the building, but after the change in ownership, a defect appears. Does the buyer have a case to issue a damages claim against the building surveyor?
The building surveyor has a duty of care to the client to carry out their obligations diligently. Still, the test in this instance would be whether the defect could have been found by reasonable inspection and if the building surveyor, using reasonable skill and care, ought to have identified such a defect. If you were able to demonstrate that it was foreseeable, then you would meet the threshold for a negligence claim, albeit this is by no means a guarantee of success in the full recovery of costs.
Ultimately, to prove there has been a breach of duty either in contract or in tort, as the claimant, the obligation is upon you to establish that a breach has occurred.
This may involve establishing what the duty of care owed was. If your claim is in contract, this is likely to be much more straightforward to achieve. What is also helpful is where you can establish if the professional is not working to an accepted industry standard and if you have historical evidence of employing similar services and the duty of care was much better. This can be used to back up your position of a negligence claim.
A test that is applied to negligence claims when establishing entitlement is whether or not the loss would have been incurred regardless of the negligence. An example of this would be a professional recommending an award of a contract to a supplier who then entered administration and caused the client to incur losses.
Suppose it could be proven that the professional had a contract to undertake due diligence on the supply chain, including financial health checks and credit checks, to ensure supply chain resilience had been checked before any recommendations were made. In that case, the client could have a case to bring about a negligence claim in contract on the basis they failed to provide reasonable skill and care in providing such advice. The client’s argument would be that, if they had diligently carried out their duties, it would have been foreseeable that the contractor was in dire financial circumstances and, therefore, unlikely to meet the contractual obligations if they were awarded further work.
However, if the contractor took on another contract as the same point of award and this was proven to be the reason they entered financial difficulty and ultimately administration, the professional would argue the loss flowed from this cause and not necessarily purely from negligent advice they gave. In this instance, the professional would say the act of a third party caused the loss, and therefore they are not responsible.
Award of Damages
If a claim is proven, the overriding position is that the claimant should be put back in a position where the breach or failed duty of care had not occurred. The onus on proving the loss must reside with the claimant. Therefore, documentary evidence to substantiate their claims is advisable. Still, even if a claim is established, there is also a general obligation on the claimant to have mitigated their losses and that any costs incurred are reasonable. It is also worth noting that any costs incurred to minimise the loss are permissible in a claim. In attempting to mitigate losses, the claimant should not be prejudiced in any ensuing claim for costs ultimately.
The costs could include compensation for a ‘loss of chance’ which arise where the claimant, as a result of negligent advice, has lost out on the chance to secure financial gain and that it can demonstrate that such financial gain was securable if the advice had been correct. For example, the professional advice may be to advise on the remaining life span of a built asset to inform its value. If this advice was used in a valuation of the asset for sale and then subsequently proven that such advice was incorrect, then a level of financial gain has not been secured as a direct result of the professionals’ advice leading to the valuation.
Whilst this is a broad coverage of the principles of bringing about negligence claims, it’s always worth seeking independent legal advice before launching a lawsuit to ascertain the confidence level of success before ultimately starting proceedings.
About Dean Suttling
A member of the Royal Institution of Chartered Surveyors, Dean has twenty years of experience in commercial management and quantity surveying, undertaking roles for contractors, clients, and consultants.