Professional Negligence in Construction

Ben Patten KC and Hugh Saunders

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CHAPTER 6 Causation loss and damage in claims against construction professionals

Introduction 113
Section A: the essential approach 114
Section B: scope of duty 114
Section C: remoteness 116
Section D: causation 118
- Effective cause 118
- Break in the chain of causation 119
- Outcome dependent upon hypothetical actions 120
Section E: assessment of loss 122
- Costs of rectification or diminution in value? 122
- Other expenditure or costs 124
- Liability to third parties 125
- Personal injury, inconvenience and distress 126
- The construction professional’s fees 127
Section F: mitigation 128
Section G: limitation of actions 129
Section H: contributory negligence 132
Section I: contribution 134

Introduction

6.1 A construction professional may have acted in breach of contractual and tortious duty without causing the person to whom that duty was owed any loss. Indeed, although a breach of contractual duty will always amount to “liability” even if it results in no damage,1 there is no breach of tortious duty unless damage is caused, “damage” being an essential ingredient of the tort of negligence. 6.2 A claimant who brings a claim against a construction professional for breach of duty must be able to prove not just that the construction professional acted in breach of duty, but that the breach of duty caused the claimant loss. 6.3 English law has developed a number of approaches and tests which guide the courts in deciding (1) whether loss has been caused and (2) what level of damages to award in respect of that loss. 6.4 Moreover where the claimant has been partly responsible for the loss or the breach of duty took place a long time previously the law affords the construction professional a

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number of partial or even complete defences to having to pay damages. It also provides the construction professional with the opportunity to make others also responsible for the loss contribute to the claimant’s damages. 6.5 These are not facets of the law which are peculiar to construction professionals, but they are very important in the arena of professional liability claims against construction professionals.

Section A: the essential approach

6.6 At its most basic, “causation, loss and damage” in claims against construction professionals can be summarised as follows: (1) the claimant having proved (on the balance of probabilities) that the construction professional breached some contractual or other duty owed to it; (2) the claimant must prove (again on the balance of probabilities) that the breach of duty caused the claimant harm; (3) the claimant must provide evidence as to the financial value of that harm and (4) the court will award damages having regard to that harm which, in so far as money can do it, will put the claimant in the position it would have been in had the breach of duty not occurred.

Section B: scope of duty

6.7 As the Supreme Court recently observed,2 the English courts impose restrictions upon the extent to which a claimant who has suffered harm because of a breach of duty can recover the monetary value of that harm.3 The best known of these restrictions is the rule that no recovery can be made for harm which is too remote (see below). However, in recent times, the courts have emphasised a further restriction which is particularly apposite to breaches of duty by professional advisers: harm which has been caused the giving of negligent advice will only sound in damages if, on a true consideration of the professional’s duty, this was the kind of harm which was within its “scope of duty”.4 6.8 This means that the negligent adviser should not be made liable for all of the consequences of the advisee entering into a transaction, but only the consequences which are appropriate to the responsibility it undertook. In a case involving valuers5 Lord Hoffman explained the nature of the scope of duty restriction as follows:

It is that a person under a duty to take reasonable care to provide information on which someone else will decide upon a course of action is, if negligent, not generally regarded as responsible for all the consequences of that course of action. He is responsible only for the consequences of the information being wrong. A duty of care which imposes upon the informant responsibility for losses which would have occurred even if the information which he gave had been correct is not in my view fair and reasonable as between the parties. It is therefore

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inappropriate either as an implied term of a contract or as a tortious duty arising from the relationship between them.

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