Consultants: Know your limits

The requirement for professionals to exercise reasonable skill and care in the performance of their services is ingrained - the law provides that in the absence of any express terms to the contrary, this term will be implied into the consultant’s appointment. The test for professional negligence is taken from Bolam vs Friern Hospital Management Committee [1957]: a professional “is not guilty of negligence if he acted in accordance with a practice accepted as proper by a responsible body… skilled in that particular art”.

These requirements may strike some as being vague but the beauty is that the test of reasonable skill and care, and being judged by your peers, has the flexibility to adapt to advances in the industry and the specific facts of the projects and disputes that parties find themselves in.

Lessons as to the latitude of a consultant’s duties can be derived from recent decisions:

Acting with reasonable skill and care is not always enough

It is imperative to review appointments for strict obligations and fitness for purpose requirements and to remove or dilute such obligations so as to make them subject to reasonable skill and care. The courts have shown a reluctance to infer strict obligations as being subject to reasonable skill and care where this is not expressly set out. If a consultant is found liable for a breach of a strict/fitness for purpose obligation, it may find itself with no cover, as professional indemnity policies will not usually provide cover for claims where negligence is not alleged. These policies may be invalidated if the policyholder enters into appointments containing such obligations.

The beauty is that the test of reasonable skill and care, being judged by your peers, has the flexibility to adapt to advances in the industry

A recent case demonstrates the perils of strict obligations: in MW High Tech Projects UK Ltd vs Haase Environmental Consulting [2015] the consultant’s detailed design went beyond the parameters of what was necessary, causing a significant increase to the contractor’s costs. The contractor was unable to recover those costs under its fixed price contract with the employer. The judge held that the consultant’s obligation to exercise reasonable skill and care was “paramount”. However, if it was possible for the consultant to comply with its other specific contractual obligations (including not knowingly increasing the construction cost) by way of a non-negligent design, then the consultant was obliged to take reasonable skill and care to do so. To the extent that the consultant had not complied with such contractual requirements, the consultant would be prima facie liable to the contractor for the additional costs incurred as a result of the non-complaint “over design”.

Reasonable skill and care includes a duty to warn

Consultants may be found to have breached their duty to exercise reasonable skill and care where, despite them having provided a perfectly adequate design, they have not warned their client of a potential issue with the project or defects in the work of another contractor or consultant. The decision in Goldswain and Another vs Beltec Limited and Another [2015] provides engineers with some comfort as to the limits of this duty. The consultant had undertaken an initial inspection of underpinning works undertaken by the contractor.

The courts have made it clear it will not be enough for a consultant to show that it was doing what its peers were doing - the consultant also needs to have acted reasonably

The works had been defective and the consultant advised the contractor to replace the underpinning and provided it with copies of its designs. The works were completed with no further involvement of the consultant and no warning by the consultant to the employer of the issues that had arisen. Mr Justice Akenhead found that the consultant had done what “a sizeable number of engineers” in that situation would have done. As such, the consultant was found to have exercised reasonable skill and care and was not negligent.

Compliance with industry practice may not be a defence

The courts have made it clear that to pass the test set out in Bolam, it may not be enough for a consultant to show that it was doing what its peers were doing. In 199 Knightsbridge Development Ltd vs WSP UK Ltd [2014], the consultant denied liability on the basis that not one of the leading building services practices in the UK had identified the particular problem that had occurred prior to 2005, when the events the judgment considered took place, and as such, the consultant could not have been negligent. While the judge decided the case in WSP’s favour, he concluded that competent engineers in the consultant’s position should have foreseen the problem. The judge drew a distinction between the existence of a “responsible body of professional opinion” and prevailing “industry practice” of the time; holding that industry practice did not relieve the consultant of its duty of care. He decided that although the consultant was not alone in its approach, it should have “appreciated that there was a risk… and should have investigated that scenario in more detail”.

These decisions show judges have a great deal of latitude to interpret the standard to suit an outcome. Thankfully most professionals do not strive to act reasonably, they strive for perfection.

Sheena Sood leads the construction, engineering and infrastructure team at Beale & Company