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Professional Negligence: A New Scope

Wednesday, 13 December 2017

A recent decision illustrates that construction professionals must understand key project constraints. In Riva Properties Limited & others v Foster + Partners Limited [2017] EWHC 2574 the Claimant instructed Fosters to design a 5 star hotel near Heathrow airport. Fosters denied any knowledge of a budget, and produced a design which was almost £130m over budget. Despite an attempt at ‘value engineering’, the design proved to be impossible to produce within the budget constraints, and the design was scrapped, having cost the Claimant £4m. The claim included lost profits on the hotel and wasted expenditure on the design.

Fraser J found that Fosters had a duty to confirm key project requirements and constraints. The failure to identify a key constraint (the budget) was held to be a breach of the architect’s duty of care. A second breach was identified: stating that the design could be value engineered down to £100m. Fraser J also held that Fosters were under an obligation to advise the Claimant that reduction of costs through value engineering could not be done. Advising the Claimant that value engineering would cause a cost reduction was negligent.

The Claimant received damages for the wasted expenditure but not for lost profits (Fraser J held that the financial crisis was the reason for the failure to complete the hotel on time). The case shows that not only do architects have a duty to find out the key constraints of their clients, they must also inform the client if they know that the client has misconceptions over how that constraint can be achieved.

Author: David Kingsford, Trainee Solicitor. 13 December 2017

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