Tony notes that the judgment represents a policy decision "to protect the people of the land" – people like Mrs Merrett, who was relying on a qualified professional. While it is a romantic notion that the courts would strive to protect the people in such a way, the truth is that the duty of care will be owed in many more situations than when Mr and Mrs Ordinary are relying on professional advice.
When a client or a contractor commissions design advice from an architect or an engineer, it relies on that advice. Likewise an employer may rely on its architect, project manager and its professional team to monitor the progress of a job, to advise about claims and to issue certificates. A main contractor that subcontracts the design and construction of the piling to a specialist subcontractor will rely on their knowledge. In all of these examples and more, reliance is being placed on people with expertise.
There is (arguably) a much closer relationship between the parties in these examples than there ever was between Mrs Merrett and Mr Babb. Remember, Mr Babb was found to owe a duty of care to Mrs Merrett even though they had never met. She had never even heard of him. Contrast this with the situation during the course of a building project where individuals become well known to each other and a high degree of reliance is placed on the specialist, who will know precisely who is relying on its skills. Therefore, it must be right that the specialist assumes a responsibility in law for its work. This should be the same whether it is Mr and Mrs Ordinary or a huge corporation that is relying on someone's expertise.
For employees in large organisations, the effect of the judgment will be negligible. Employers are vicariously liable for the errors of their employees and big firms will carry insurance. But what about the thousands of smaller businesses involved in all aspects of building? Many experts say a recession is looming. If that is true, no doubt an increasing number of businesses will go to the wall over the next few years. Employees will move on, just like Mr Babb did, and may find they are no longer covered under the insurance policy of their former employer.
There is a host of other scenarios where employees could find themselves in trouble. For example, what if the former employer has retired or died and there is no run-off cover, or if the insurer refuses to pay out for some reason? What if there is an excess that cannot be funded by the firm? Sometimes the firm may be underinsured and cannot afford to meet the balance. In all these situations, employees will be at risk.
Although Tony's suggestion that the RICS oblige its members to carry insurance is a sound idea, and should also be considered by other industry bodies, this will still leave thousands of people in the industry who are not members of such institutions without cover. So what can employees do? If they ever hear about what happened to Mr Babb they might be tempted to follow the advice of the Court of Appeal, which suggested employees might consider taking out their own personal insurance. In practice I suspect this is unrealistic. With personal insurance in place, employees will quickly become a more attractive target (especially for those who bear a grudge, of whom there are many in construction) and premiums will quickly become prohibitive. Few will then be prepared to dip into their own pockets to pay substantial premiums.
Some firms may seek to include provisions in their contracts that direct action against its employees is prohibited. But whether this would work is open to question, and in any event it could never exclude liability to third parties (such as Mrs Merrett) or for personal injury claims.
The best advice may be to choose one's employer carefully, or risk ending up like poor John Babb.
Postscript
Nick Henchie is a solicitor in the construction and engineering department of Rowe and Maw.
