Professional negligence and liability

The historic approach to contracting has typically seen employers engaging the services of professionals to produce designs which are then put out to tender for contractors to construct. In the past 15 to 20 years there has been a significant change in the way in which projects are procured and the introduction of Design and Build contracts as well as Design Build and Operate contracts has seen traditional roles fulfilled by professionals changing.

In Design Build and Design Build Operate contracts the designer now forms part of the contractor’s professional team and his contractual obligations are accordingly directed at the contractor rather than the employer. Under these circumstances does the professional attract any higher level of responsibility when compared to an engagement by an employer? The starting point for this debate is a clear understanding that when a contractor is tasked with the responsibility to design, and thereafter engage the services of a professional to create the design, the contractor’s liability for design will be absolute. This means that in so far as the employer is concerned, the design produced by the contractor must be fit for purpose, i.e. it must work! Professionals do not normally contract with their employers, whether such employers are the Employer, or in the case of Design and Build, the Contractor, other than on a basis of “due skill care and diligence”. Accordingly, the Professional will not usually warrant that his design will be “fit for purpose”, albeit the Contractor will be liable for this higher standard of care. Accordingly, the fact that the design fails, whilst this would be a breach of contract by a contractor in a Design and Build contract, will not automatically be a breach of the professional’s contractual duty of due skill and care unless it can be shown that the professional has been negligent.

This hiatus between the contractor’s and the professional’s duties can create serious difficulties for a Design and Build contractor who will have relied upon the professional to design the works but then finds that he has no rights of recourse against the designer where the design fails but where there has been no negligence on the part of the professional.

This precise situation occurred in the UK where TV station ITN contracted with a designer to design a transmission mast which was to be over 400metres in height. The designer came up with a novel cable stayed solution which, in terms of the code of practice at the time, had to be capable of dealing with gusts of wind up to 80 miles per hour. In the result the mast collapsed at wind speeds less than 30 miles per hour and ITN sued the designer for breach of contract. It was found by the court that the designer had used reasonable skill and care in the design and therefore there was no negligence and no right of recourse by the Employer notwithstanding the heap of structural steel lying at the base of where the mast had stood!
Two situations arise out of the above. Firstly, how is negligence established and secondly can a contractor or an employer who wishes to have a design which is fit for purpose achieve this higher standard when the professional is appointed and how is it achieved.

The legal test for negligence in these circumstances is simply stated, namely, a comparison of the performance of the allegedly negligent professional with the standards of performance which would be expected of other professionals who operate in a similar field. Establishing the comparison is
where the difficulty lies. In order to impose on a professional the higher duty of fitness for purpose would necessitate an express term of the professional’s appointment to clearly state that this standard is to be applied. This of course necessitates a willingness on the part of the professional to enter into a contract with this as a term of the contract. Professionals are often reluctant to accept such an imposition since it will be very difficult to obtain Professional Indemnity insurance for “fitness for purpose”. The professional will accordingly be personally exposed, or his consulting practice will be exposed should a claim arise where no insurance cover is in place.

Professionals and employers would be well advised to familiarise themselves with the above consequences in order to avoid falling foul of the financial consequences which could flow from being caught in this negligence trap.

Chris D Binnington Pr Eng
Managing Director
Binnington Copeland and Associates (Pty) Ltd