2016 case law gives warning to professional consultants offering informal advice

News - 29/02/2016

A court judgment highlights a risk common to any professional who offers informal advice. In what the court described as a “cautionary tale”, the professional consultant had performed various gratuitous services relating to her friends’ landscape gardening project. The project did not go smoothly, the relationship broke down and her former friends claimed for the cost of remedial works.

The court decided that the professional consultant owed a duty of care that covered several design and project management services. The court confirmed that a professional designer can owe a duty of care in respect of pure economic loss on a construction project. It also held that such liability is not restricted to advice given by the professional consultant, but can also cover other services that it performs.

However, the court emphasised that “this was not a piece of brief ad hoc advice of the type occasionally proffered by professional people in a less formal context”. This was a significant project approached in a professional way, with services provided over a relatively long period and involving considerable commitment on both sides. In addition, the professional consultant had hoped to receive payment for services that might be necessary later in the project.

Pure economic loss and professional negligence

In cases of negligent advice, the basic principle is to put the claimant in the position it would have been in had the professional not breached the duty owed to the claimant. In other words, ordinarily a claimant will be entitled to recover the amount by which it is out of pocket as a result of relying on the defendant’s advice.

The basic measure when assessing losses resulting from negligence is found by comparing what the claimant’s position would have been if there had been no breach of duty, and the claimant’s actual position.

Burgess and another v Lejonvarn [2016] EWHC 40 (TCC)

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