Beware your duty of care when recommending the cheapest contractor, warns Tony Bingham

The receptionist at the swanky hotel was insistent that I fill in my date of birth on the registration form. “Over 21,” I tried. Blank look. “Old enough to see three recessions in the construction industry.” More blank looks, and then: “Listen, if you don’t fill in your date of birth you can’t have your room.”

It’s true – I have seen three recessions in construction and this looks like the fourth. If you are a customer buying ceilings, partitions or a fit-out, you are likely to have suppliers, subcontractors and main contractors crawling all over you to place your order with the cheapest.

But you will have to be an awfully big, strong boy or girl to resist going with the cheapest. And you will also have to be awfully big and strong when the cheapest outfit becomes an awfully big pain in the bum.

I have seen prices shorten with every downturn. Then I have watched cause and effect as the cheaper deal causes fit-out firms to shorten prices to suppliers and subcontractors. Even the labour-only fitters find their rates for measured work going downhill.

It’s at times like this when people like me make a jolly good living.

You have a duty of professional care – and when you recommend, you are actually giving advice

Fed-up people begin to argue and quarrels break out all over the place. The fed-up workers either clear off, or do poor work – sometimes mischievously. These recessions are a bonanza for us disputo-maniacs as adjudications break out like wildfire – and all because of the cheapest price.

But let me have a word in your ear. If you are an architect, a project manager or a QS choosing which supplier or contractor your client should go with, don’t forget you have, in law, a duty of professional care. When you recommend, you are actually giving advice, and if that advice is below the standard that a professional in your niche ought to give, there could be an actionable complaint against you for damages by your client when things go wobbly.

So, if you recommend the cheapest fit-out contractor, consider what care ought to be taken. What checks should you make? How cheap is cheap? How much below a reasonable price are you buying? What chance is there of this cheap contractor doing a good job? And if you start to ‘um and ah’ about the risk, then don’t recommend the cheapest.

Who knows, by the time the recession is over the cheaper mob may have cleared off, gone bust and your client will have to pay oodles more to get a reasonable firm to finish the work. Oh, and I nearly forgot, put right the mischief work and begin an adjudication against you – his professional adviser – for failing to safeguard his interests.