Architect Liable for Contractor’s Errors
A couple who engaged a contractor to carry out work on their house have succeeded in their claim against the architect in respect of the cost of putting right defects in the contractor’s work.
The couple bought a five-storey house in Putney in June 2005. Before moving in, they wished to make changes to the layout of the property, in particular the ground and lower ground floors. The house was near the River Thames and the lower ground floor was below ground level at the front of the property. They engaged an architect to redesign the house. Most of the necessary works were carried out by a contractor recommended to them by the architect.
The architect’s firm failed to ensure that the contractor had installed waterproofing, plumbing, mechanical services and electrical installations without defects.
About six weeks after they moved into the house in May 2007, the homeowners discovered extensive damp in the lower ground floor of the house. The problem was assessed by experts, who concluded that the contractor had failed to carry out proper waterproofing. There were also problems with the electrical works and the plumbing. The couple had to move out of the property for more than 18 months while remedial works were completed.
They sought compensation for the cost of remedying the works, as well as consequential losses. The contractor subsequently became insolvent.
The architect defended the couple’s claim against it on several grounds, including that, as a result of the contractor’s financial situation, the problems would not have been remedied even if the architect had detected them. The architect’s terms of engagement contained a clause limiting its liability to ‘the amount that is reasonable for us to pay’ in respect of work carried out by ‘other consultants, contractors and specialists appointed by you’. Such clauses, known as ‘net contribution clauses’, attempt to limit a service supplier’s liability to their ‘share’ of any damage. Where such a clause is not in place, all parties to a contract are jointly and severally liable for any claims resulting from it.
The court found that the architect was unable to rely on the net contribution clause. The term limiting liability in respect of ‘other contractors’ was ambiguous: given that the homeowners were consumers, the court considered the impact of the Unfair Terms in Consumer Contracts Regulations 1999 on their contractual arrangements and concluded that the ambiguity must be resolved in their favour. Whilst the clause would apply to some of the work carried out on the house, it could not apply to the work done by the contractor. Crucial to this decision was the fact that the architect had received a fee from the contractor in relation to the work.