Problems can start when the advice or information provided by the professionals is wrong. This will usually have a detrimental if not devastating impact on the progress of the project and its financial success.
These problems can arise from bad advice, defective works, poor design or incorrect plans, wrong materials or poor supervision and project management. There could be issues with overvaluation or undervaluation of payments, building regulation and planning permission or defective notices or contractual documents. Delay and running over budget are also very common.
These problems will often be caused by the negligence advice of professionals involved in the project but because of the number of professionals involved in construction projects, from architects, solicitors, quantity and building surveyors to building design consultants, architects and accountants, working out who is to blame is sometimes not easy.
The starting point is to look at their role and upon what issues they were instructed (and by whom) to advise. This can be straightforward for instance in the case of a building surveyor instructed to report upon completed works, health and safety and building regulations. Design flaws, however, could result from errors made by design consultants or building engineers and costs miscalculations could flow from a quantity surveyor or accountant’s negligence.
So where mistakes have been made, the scope of the duty of the relevant professionals need to be considered to ascertain which professional, and it may be more than one, is responsible.
Most construction professionals will have their own governing and disciplinary body – the Royal Institute of British Architects, the Royal Institute of Chartered Surveyors, the Institution of Civil Engineers, for instance – and so the first port of call may be a complaint to that body. However, these bodies will have limited powers to provide the full remedies available in law needed to properly compensate the wronged party.
Scope of the professional’s duty – the law has changed
The professional owes a duty of care in common law in addition to those owed under contract. If it breaches this duties, then it may be negligent. The loss arising from that negligence needs to be considered and particularly, the complex area of causation, whether the negligent act or omission actually caused the loss complained of.
Authority on the scope of a professional’s duty and the extent of damages recoverable was until recently provided by South Australia Asset Management Corpn v York Montague Ltd  AC 191 which gave us the ‘SAAMCO test’ or ‘SAAMCO cap’ on damages. However, the 2021 cases of Manchester Building Society v Grant Thornton  UKSC 20, an auditor’s negligence case, and Khan v Meadows  UKSC 21, a medical negligence case, heard by the Supreme Court together, has revisited these issues to give new guidance on the proper approach to determining the scope of duty and the extent of liability of professional advisers in the tort of negligence.
The Supreme Court has now said that there must be focus on the purpose of the advice or information and the risk this advice was intended to protect against, to ensure the wronged party is placed back into the position that it would have been in the absence of the professional’s negligence. It has provided a new six part test to be applied when considering whether there has been negligence and if so what damages properly flow from it.
In a further important professional negligence case for the construction sector this year, the court clarified certain aspects of a surveyor’s duty. Whilst Large v Hart & Anor  EWCA Civ 24 (15.01.2021) concerned a HomeBuyers survey, its principles will have an impact upon all surveyors reports, whether residential or commercial. The court held that the surveyor was negligent in not informing his clients of the limitations of the survey because of material risks which he was unable to assess and therefore of the need for further investigations and in particular, a Professional Consultant’s Certificate
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Professional Negligence is a complex area, particularly in the field of construction. It is important that expert advice on the rights and remedies of the parties is sought as soon as possible as delay can compound the issues.
The Professional Negligence team at Wellers Law Groups have considerable expertise in advising and acting for all parties in professional negligence cases, particularly in the construction industry.