Professional liability

DPP
The Welsh School of Architecture
Diploma in Architecture: Professional Practice
2018-2019

CORE KNOWLEDGE: INTRODUCTION TO PROFESSIONAL LIABILITY

Notes prepared by Sarah Lupton September 2018

Whatever their mode of practice, and regardless of their status within an organisation, all
professionals have some legal obligations for which they may be held personally or jointly
accountable. These are most likely to arise in connection with:

• occupying premises for business purposes;

• running the business;
• employing staff;
• providing professional services under client appointments (and warranties)
• carrying out projects.

Some of these obligations will arise from contractual obligations where the duty and the remedy for
non-compliance may be set out. Some will be subject to common law, where actions which result in
injury to others could result in claims for damages. Other obligations will arise from legislation where
non-compliance could be a breach of statutory duty giving grounds for prosecution.

Building procurement can be a high risk business and all persons involved in formulating briefs,
writing specifications, reporting on the state or potential of land or buildings, designing, inspecting
work and administering building contracts etc could at some time or other be faced with a reference
to adjudication, arbitration, or litigation. Sometimes the person may be forced into the position of
claimant, or become caught up as a witness of fact, or have to face allegations of breach of
contract or negligence.

Claims in contract

There are important differences between claims in contract and tort.

A contract is an agreement enforceable at law, or for a breach of which the law will provide a
remedy – usually monetary compensation or damages. Contractual obligations can arise from
express or implied terms, the latter usually because of trade custom, or because they are necessary
to make the contract workable, or most likely because they are implied by statute and cannot
readily be excluded. Only the parties to a contract are bound by its terms, and the obligations which
it gives rise to are therefore relatively controllable. By and large, the parties are free to agree
whatever bargain they wish, and the courts will not be concerned about its fairness, only that it is
workable and not contrary to public morality and the law.

Where a contract obligation is not met, an action for breach of contract may be brought and
damages claimed in respect of all the losses suffered. Generally the claim will be brought by the
other party to the contract, although where the contract provides a benefit to an identified third
party, that party may also be able to bring a claim (Contract (Rights of Third Parties) Act 1999).

A consultant liable for breach of contract will often be in breach of an express or implied term to
exercise that degree of skill and care expected of an ordinary competent professional. This
requirement for exercising reasonable skill and care will usually be set out in the terms of
appointment (for example, the standard forms published by the RIBA). Even if not it would be
implied through the Supply of Goods and Services Act 1982, or under the Consumer Rights Act
2015. This is sometime referred to as a ‘negligence based liability’, and that failure to comply is a
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matter of professional negligence – but in this context the reference is to a contractual duty (not
the tort of negligence).

However, if the contractual duty is a strict liability one, ie to achieve a particular result, as for
example with a ‘fitness for purpose’ warranty, then it will not be necessary to rely on a lack of skill
and care. The fact of failure will, of itself, be sufficient to establish breach of contract.

Contract law puts no restrictions on the kind of losses that are recoverable in damages, and
economic losses are freely recoverable so long as they arise directly from the breach and it may be
supposed that they could reasonably have been within the contemplation of the parties at the time
they entered into the contract.

It is therefore important to consider carefully the terms of any contractual arrangement. It is

essential that contracts for professional services are put into writing, and that the obligations of the
parties are set down in clear and precise terms. Such contracts will usually be ‘construction
contracts’, and subject to the terms of the Housing Grants, Construction and Regeneration Act
1996 and subsequent related legislation.

Under the Limitation Act 1980, the time for bringing an action for breach of contract will be six
years from the date of the breach in the case of simple contracts, or twelve years in the case of a
contract entered into as a deed.

Claims in tort

Tort is a civil wrong outside of contract, although a tortious duty may exist in parallel with a
contractual one. Many kinds of tort are relevant to the practice of architecture (for example,
trespass, libel, nuisance), but actions in tort against architects are usually for alleged negligence.

We are all personally liable for any torts which we commit, whether these are the result of actions or
a failure to act in particular circumstances. In general, anyone can sue or be sued in respect of injury
so caused, provided it is not too remote. Normally it is the actual wrongdoer who will be liable, but
the law imposes a responsibility also on persons who are vicariously liable for the actions of others
under their control, for example employers in relation to acts of their employees.

There are three essentials for a claim in tort to be established:

• There must be a duty of care owed to the plaintiff by the defendant. For a professional
person this will usually be a duty to use reasonable care and skill to the standard of the
ordinary skilled man or woman exercising and professing to have that special professional
skill. The standard of care expected of a reasonably competent person is likely to be judged
in the light of the technical knowledge and standards prevailing at the time, ie the ‘state of
the art’. This is why it is important that consultants retain all industry good practice
guidance, common standards, technical information, manufacturers’ trade literature, etc,
relating to specific projects.
• The duty of care must have been breached by carelessness, to an extent which in law
amounts to negligence.
• Damage must have resulted from that breach.

Often the plaintiff will have no contract with the defendant, and therefore of necessity any claim has
to be founded in tort. However, even where there is a contract, the courts may nevertheless find
that a duty in tort also exists. Even though it is usually easier to establish breach of contract than to
prove negligence in tort, there can be advantages for a plaintiff in bringing a tort action because:

• the time limits before an action becomes statute barred due to the Limitation Act 1980,
could be greater in tort than in contract. This could be particularly important in the case of
design defects where time will start to run from the date that damage first occurred, and of
course this could be much later than the date of the breach of contract (see below);
• differences in the basis for calculating damages as between tort and contract could also be
advantageous to a plaintiff.
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Against this it should be remembered that recovery of damages for pure economic loss, unrelated to
physical damage or personal injury, is less likely to succeed in tort than in contract with the law as it
is at present, although there are exceptions, for example in the area of negligent advice (as distinct
from negligent design). As a result, it is generally considered better for actions to recover purely
economic loss to be framed in contract. Third parties such as funders, lessees, subsequent
purchasers etc, who were not involved with the original contract and who would otherwise have to
rely mainly on tort, usually try to establish contractual relationships by seeking collateral agreements
or warranties. These should never be entered into if the terms are more onerous than the original
contracts, but even so the additional contractual relationships can only increase liability.

The limitation period applicable for an action in tort is six years after the damage was first sustained,
regardless of whether or not it was discovered. This is often likely to be far more favourable for a
plaintiff than the period for breach of contract, and even this longer period can be further increased
by the provisions of the Latent Damage Act 1986. This amends the Limitation Act 1980 in certain
respects concerning tort actions. It introduces a three-year discoverability period, but also imposes
a fifteen-year absolute time bar except where there has been deliberate concealment.

Legislation

Legislation imposes conditions on consultant’s work, and is increasingly used to reformulate areas of
law that have become unwieldy. It is also used to introduce new areas of law, some of which are the
result of complying with European Directives. In many cases, breach of an Act of Parliament or
related regulations (eg health and safety regulations, or law related to corruption) could give rise to
a criminal prosecution. In some cases, the Act itself creates 'civil rights', ie the right of another
person to bring a civil action for a breach of the Act.

Form of practice

The form of practice a consultant is engaged in will affect the degree to which he or she is liable. In
a partnership, the partners are ‘jointly and severally’ liable for all negligent acts committed by any
one of its partners, even though the others might have taken no part in such negligent action. This
means that a client may sue any partner, or the partnership as a whole. The directors of a limited
liability company, however, are not normally personally liable for the debts of the company. The
members of a ‘limited liability partnership’ are not jointly and severally liable in the normal course of
their business, and their liability is limited to their stakehold in the partnership.

References and further reading

Lupton S., Cornes and Lupton’s Design Liability in Construction, (Oxford: Wiley Blackwell, 2013)

Speaight, A. and Stone, G. (eds.) Architect’s Legal Handbook, 9th edn. (Oxford: Architectural Press
(Elsevier Ltd), 2010)

Uff, John, Construction law, 12th edn, (London: Sweet & Maxwell, 2017)