Professional Negligence

Consultants such as Architects, Quantity Surveyors, Building Surveyors, Structural/Civil Engineers, Project Managers, Contract Administrators or other specialist consultants are often blamed for losses due to defective design in construction or poor supervision. Common issues are late issue of design information or they simply get it wrong, causing delay or loss in the delivery of the construction project.

Consultants must in law be professionally competent, they have a high duty of care to act with reasonable skill and care and have to “get it right” particularly with design and supervision. The builder without design obligations has to be an "ordinary competent builder", who builds the work to the designer's requirements. Such a builder is not clear of blame if things go wrong, errors or omissions that are reasonably foreseeable must be pointed out in a warning to negate the builder’s liability. Such warnings will also be necessary where the Client insists on a particular product or design and concerns that might be doomed to failure.

The building client must essentially obtain and pay for the very best in professional advice and management on any construction project to ensure successful delivery. Arbicon see many projects where clients have done “DIY” management or used cheap “professionals” that end in doom. Design failure or delivery and mismanagement of contract procedures are common and costly problems.

Negligence in building construction and design or worse, bad faith can result in consequences that are disastrous and cause significant financial loss. The professional will then be open to claim for professional negligence, thus if you have engaged a professional who is qualified with a professional body such as the RIBA or RICS, professional indemnity insurance must be carried. It is important that when engaging such consultants, you check that both clear written terms of engagement are agreed and that adequate Professional Indemnity Insurance is held. The absence of such is an alarm bell.

Arbicon illustrate here what can go wrong due to failure in engaging professional services in construction projects and where such professional services can be negligent, all taken from cases Arbicon have dealt with.

Typical Examples are:

• Project run over budget – Overvaluation or incorrect valuation of the works.

• Poor precontract preparation – Scope not designed, Employers Requirements missing or inadequate design details and the poor use of provisional sums, lack of specification and reports, planning, building control approval leading variations extras.

• Project delayed and taken longer than planned and programmed – Design Delivery & Procurement failure

• Contractor procured incorrectly (Wrong Letter of Intent or contract, poor document management) – Loss through absent or ineffective terms of contract

• Procurement of an insolvent Contractor without any credit checks – Warnings on insolvency, Bonds and Guarantees not put in place where the Contractor has no assets.

• Procurement of the wrong JCT, NEC or other contract form

• Procurement of inadequate or wrong articles and conditions in contracts

• No consideration of essential amendments to contract clauses

• Poor contract administration/ management - Incorrect Notices/Document management causing damage and breaches

• Failure to serve valid Payment or Payless Notices or operate the payment machinery

• Failure due to acting as a Quantity Surveyor or Contract Administrator when not qualified

• Design failure and failure to complete the design

• Failure to manage, co-ordinate and ensure compliance with the design in the contractors works

• Failure to ensure the Contractor has adequate insurance including Professional Indemnity Insurance

• Failure to understand Contractor’s Design Responsibility and valuation associated

• Having identified non-compliant works, failing to advise the client on the impact and over valuing payment in respect of non-compliant work.

• Failure to supervise the contractors works for quality and compliance with programme

• In failing to identify and rectify non-compliant works continuing and allowing payment to be made for non-compliant work

• Failing to identify culpable contractor delays then incorrectly granting extensions of time a costs

• Failure to issue a Non-Completion Notice or manage Practical Completion.

• Failure to procure adequate values for Liquidated Damages

• Failure to impose Liquidated Damages

• Failure to avoid contractor loss and expense claims

• Health and safety breaches

• Failure to deal with and advise on rectifying Defective works

• Failure to manage or obtain the relevant planning permission or building control approval

• Failure to incorporate contract terms for late payment

• Failure to manage the risk or advise on the correct liability for costs of delay analysis and Expert Reports.

• Failure to declare conflicts of interest – E.g. close relationships between builder and the professional, leading to bias incorrect decisions and advice.

• Failure to advise on the various dispute resolution processes including adjudication precontract.

• Failure to advise on the cost of dispute resolution processes and how to procure into contracts and poor advice on what is a cost in the cause in disputes and what is not.

The Client will suffer losses on the points illustrated above, it does not pay to employ a Contract Consultant, Lawyer or Contract Administrator that have no experience of actually constructing buildings on site, construction contract procurement and dispute resolution. Adequate expertise may not be apparent at the outset and the incompetence will only emerge often sadly after it is too late!

In the event that negligence arises, Arbicon can help you recover damages lost as a result of and advance your position or claim whether through Adjudication, Arbitration, Mediation, ADR as part of a Court pre-action protocol process or through the provision of a CPR 35 expert witness report. Acting as an advocate, we would at all times seek to negotiate a settlement in advance of any formal proceedings as PI Insurance firms will take a commercial view on costs if you have a strong case. The first consideration is often a claim against the contractor and if that gets ruled out by contractor bankruptcy or decided liability, the pointer of claim will turn to the relevant consultant.

See also our page on Project Rescue (LINK). Arbicon can manage the rescue from the pile of rubble you have been left with to the finished building. If you have a project disaster to be rescued or would like to find out more about construction professional negligence claims, please use our contact form or call one of our offices for a consultation.