Professional Negligence Case Examines Scope of Duty and Recoverability of Losses in Construction Disputes

Introduction

In the case of Jenni Glover & Anor v Fluid Structural Engineers & Technical Designers Limited, presided over by His Honour Judge Stephen Davies, the Technology and Construction Court (TCC) deliberated upon an application for strike-out or summary judgment on the claimants’ claim against the defendant. This case offers insights into the application of legal principles concerning the scope of duty, recoverability of various types of losses in negligence cases, and the principle of total failure of consideration, amongst other issues.

Key Facts

The claimants, residential owners who commissioned renovation works, including a new basement, appointed the defendant, Fluid, to provide structural engineering services. During the construction phase, alleged breaches of duty by Fluid reportedly led to property damage and complications with adjacent properties. These allegedly included inadequate monitoring and failure to inform the claimants about the actual execution of works.

Consequently, the claimants incurred costs investigating claims against various parties—including the defendant, their insurer, and another insurance company—that were initially unsustainable due to the misinformation provided by Fluid. The claimants sought recovery of these costs, as well as repayment for a portion of the fees paid to Fluid.

Legal Principles

Several legal principles were pivotal to the court’s determination:

Duty of Care and Scope

The case required the application of principles from Manchester Building Society v Grant Thornton UK LLP, focusing on the scope of duty and the nexus between the harm suffered and the duty of care (“the Manchester BS test”). The assessment involved a six-stage checklist for determining whether damages sought fell within the scope of the duty owed. Key considerations included the “scope of duty question” and “duty nexus question.”

Recoverability of Losses

The claimants argued for the recoverability of certain types of losses, such as legal and investigation costs incurred due to Fluid’s alleged breach, which Fluid contested were outside conventional construction losses. The court considered precedents like BDW Trading Limited v (1) URS Corporation Limited (2) Cameron Taylor One Limited to affirm the claimants’ stance that such costs are recoverable if they are reasonably argued to be within the scope of the duty owed.

Repayment of Fees

When discussing the claimants’ repayment claim, the court examined whether it could succeed where professional services were either not provided at all or so poorly performed that they were deemed worthless. The court referenced legal authorities Multiplex Constructions (UK) Ltd v Cleveland Bridge UK Ltd and William Clark Partnership Ltd v Dock St Pct Ltd, which established that a client may refuse payment if the professional services provided had no value.

Outcomes

The application for strike-out or summary judgment was dismissed, with the court finding that the claimants had sufficiently arguable grounds for their case to proceed to trial. Notwithstanding potential difficulties, it was determined that the laws and facts underpinning both the costs claim and repayment claim warranted a full hearing.

Conclusion

The case puts forth important considerations in professional negligence disputes, highlighting the applicability and limits of legal principles governing the scope of professional duty and the recoverability of losses. It emphasizes the court’s careful analysis of contractual obligations against alleged performance to determine whether a claim for repayment of fees is justifiable. By meticulously applying established legal tests to assess potential recovery of damages and repayment of fees, the case serves as a notable precedent for professionals and their clients in similar circumstances. The court’s decision to allow the case to proceed to trial underscores the fact-intensive nature of determining whether services provided were so deficient as to render them worthless, and illustrates that issues of breach, causation, and value are often best resolved through a full hearing.