Professional Negligence or an Honest Mistake?

Sam Bawden, commercial dispute resolution solicitor, takes a look at the difference between professional negligence and making a genuine mistake.

It is well established that a professional, be it a surveyor, architect, solicitor, doctor, financial advisor or other professional person that makes a wrong judgement has not necessarily been negligent for the simple fact that they have made a wrong decision or recommendation.

Provided the professional does not make a judgement or recommendation that, in all of the circumstances, no member of the profession who was reasonably well informed and competent would have made then he will not be negligent; he will simply have made a decision which proves, with hindsight, to have been wrong.

This point was reinforced by the recent case of Igloo Regenerations (General Partner) Ltd v Powell Williams Partnership (PWP) (2013). In this case the claimant companies (which together formed Igloo) bought an historic mill in 2003 that had been converted into offices. Prior to purchasing the building, Igloo had employed PWP, the defendant surveyors in the case, to undertake a building survey. The survey noted that some cracking had occurred in the piers on the ground floor. A Summary of Condition report was produced by PWP and subsequently supported by PWP’s structural engineer. The report confirmed, amongst other things, that the building’s brickwork was able to perform its load bearing function.

In 2005 a second firm of surveyors employed by Igloo identified that the cracks had become larger. Further investigations were undertaken by a third company of surveyors in 2007. This resulted in the surveyors recommending that the piers be restored and the load bearing capacity be improved. Following this Igloo brought professional negligence proceedings against PWP arguing they had failed to recognise the risk of the piers failing and that their investigations should have identified there was a risk of such failure.

It fell to be determined by the Technology and Construction Court whether:

• PWP owed a duty of care to Igloo.
• What the scope of PWP’s instructions had been.
• Whether PWP had failed in its duty to exercise reasonable care and skill.
• Whether PWP ought to have recommended that an assessment of the loading capacity be carried out.
• Whether PWP ought to have recommended further investigation of the cracking identified in the mill’s ground floor piers.

The claim was dismissed. Whilst PWP clearly owed a duty of care to Igloo the court held that PWP had not fallen below the requisite standard of care and skill expected of surveyors instructed to inspect, advise and report as PWP had been in the above case.

Comment:

Parties generally instruct professionals for the following reasons:

• to assist them with complex matters in relation to which they do not personally have sufficient  knowledge and skill; and/or
• in order to have a third party (often backed by an insurer) to blame in the unfortunate event that things go wrong.

For those that take the latter, more cynical approach to instructing experts, the above case highlights the importance of being clear about what you can reasonably expect from your chosen professional.

Parties are therefore encouraged to seek wherever possible to clarify the existence and extent of a professional’s duty of care in a written contract. There is no reason in principle why the parties cannot impose a duty of care on the professional to achieve a standard that is higher than that of a reasonably competent professional in his respective field. 

The success of any contractual negotiations will, as always, depend on the respective bargaining power of the professional and the client and in reality many clients will have no alternative but to contract on a professional’s standard terms.  However, in those circumstances, contracting parties are encouraged to look closely at the professional’s terms and conditions and to note in particular any exclusion clauses which are imposed upon them.

For advice on professional negligence claims and other construction disputes, or for general commercial litigation advice, call Sam Bawden, specialist commercial dispute resolution solicitor at Holmes & Hills Solicitors in Sudbury.