When does a favour to a neighbour carry a duty of care?
There is a saying that no good deed goes unpunished. At first glance, this is exactly what the recent case of Burgess v Lejonvarn is all about. Even the judge said that it represents a “cautionary tale”.
Mr and Mrs Burgess, the claimants, were near neighbours and friends of the defendant, Mrs Lejonvarn. When the Burgesses moved house and decided to landscape their new garden (and having received a quote from a reputable landscape gardener which they felt was too expensive), they asked their friend and former neighbour to help them out. This was not an entirely new state of affairs as Mrs Lejonvarn had previously provided architectural and project management services to them and to Mr Burgess’ company in her capacity as an employee of an architectural practice.
The project involved extensive remodelling of the garden, including earthworks and drainage. Mrs Lejonvarn secured a contractor to carry out the landscaping and earthworks with a view to providing “soft” design services for a fee when these were completed. In the meantime, she undertook project management and other services without payment.
All did not go to plan. The Burgesses prematurely ended Mrs Lejonvarn’s involvement (presumably the friendship as well) and employed the landscape gardener who originally quoted to finish off and to carry out remedial works. They then commenced proceedings against their former friend, claiming the extra costs as damages for breach of contract and also for breach of a duty of care.
The court was asked to decide several preliminary issues: whether a contract for the services had been agreed (and if so what were its terms) and, regardless of whether there was a contract, if Mrs Lejonvarn owed a duty of care to the Burgesses in carrying out such services.
On the first issue, the court held that there was no contract. There was insufficient evidence to establish three of the crucial legal principles (offer, acceptance or consideration) which govern contract formation.
The only remaining basis for a claim for compensation was whether the Burgesses were owed a duty of care by Mrs Lejonvarn.
So when does a duty of care normally arise? A number of tests have been developed. These include: foreseeability; the nature of the relationship between the parties; assumption of responsibility and cases where someone with a special skill applies that skill for another person, who then relies upon it.
The Burgesses asserted that Mrs Lejonvarn knew that they would rely on her claimed professional skill and experience and that if she performed the services without reasonable care and skill, it was foreseeable that they would suffer loss and expense. Furthermore, she had assumed responsibility for these as well as to complete the project within an agreed cost budget.
The judge accepted that the only reimbursement expected by Mrs Lejonvarn was for design services later on, but that did not mean that the services she carried out before then were not part of a professional relationship. On the evidence, the procurement, design preparation, site supervision and other cost control services were all carried out in a commercial context and on a professional basis. The judge said: “This was not a piece of brief ad hoc advice of the type occasionally proffered by professional people in a less than formal context. Instead the services were provided over a relatively lengthy period of time and involved considerable input and commitment on both sides.”
Notwithstanding the fact that the services were to be free of charge, Mrs Lejonvarn did owe a duty of care to the Burgesses. This extended to cover their claims for money (pure economic loss). She was obliged to exercise reasonable skill and care when undertaking these and would be judged on the standards of a reasonably competent architect and project manager.
Applying the judge’s findings on duty of care and liability for negligence, where does this case leave a construction professional asked to give a mate a view on a building matter over a drink at the pub? You are probably okay in terms of legal liability. If, however, you indicate that you are prepared to take responsibility for that advice and/or move the issue on to a more business-like footing, that is a whole different ballgame. One it might be worth mentioning to your PI insurers.
Stephanie Canham is head of construction at law firm Trowers & Hamlins