In the recent case of Multiplex Construction Europe Ltd v Bathgate Realisations Civil Engineering Ltd and Others the question which the Technology & Construction Court had to consider was whether or not consultants, that are instructed by sub-contractors, owe a duty of care to main contractors.
In this case, a sub-contractor sub-let their design responsibility of temporary works to a designer. The sub-contractor also engaged an independent consultant to ensure that those sub-let works were suitable and to issue the certificates confirming the works were conforming to the relevant British Standard.
Unfortunately, the temporary works turned out to be defective. As a result, the contractor started a claim against the sub-contractor, the designer and the consultant’s insurer for damages in excess of £12 million. As part of the claim, the contractor argued that the consultant owed a tortious duty of care, committed breach of warranty by providing the BS certificate and made negligent misstatements by approving the designer’s designs.
The consultant did not provide any collateral warranties and did not have a direct contractual relationship with the main contractor; however, their contract with the sub-contractor did not exclude third party rights.
A general rule is that a negligent defendant is not liable for the pure economic losses of a claimant unless there is a reason why a duty should be imposed. The crux of the main contractor’s argument was that by providing its advice, with no clear qualification as to the extent to which that advice could be relied upon, the consultant assumed responsibility to the main contractor to be liable for any economic loss suffered by the main contractor in the event of the consultant’s certification being defective.
When determining if there is a duty of care, the Court noted that it was not an issue of whether the consultant owed any abstract duty of care. It is always necessary to determine the scope of the duty by reference to the damage suffered.
Based on the above test, the Court thought it inconceivable that the consultant would voluntarily be assuming such large responsibility other than in accordance with their terms of engagement (potentially £12 million for a fee of less than £4,000). This was not a case where there was a gap in liability, since the sub-contractor had direct contractual responsibility to the main contractor for the design work. There was an existing contractual matrix relating to the project, from which the consultant sat entirely independently. Inferring such a responsibility in tort upon the consultant would be inconsistent with the contract structure that the parties had chosen to put in place.
It was held that the consultant did not owe any duty of care to the contractor. Ultimately, this case didn’t make any new law; rather it provided a summation of the relevant case law relating to consultant liability. But it is a good reminder that collateral warranties should be obtained wherever possible if you are intending to rely on another party’s expertise.