I thought I'd re-post this historical case as its re-surfaced this week after going to the court of appeal.
The Court of Appeal has upheld an earlier decision by the Technology and Construction Court (TCC) in Lejonvarn v Burgess. It found that a friend (Levonjarn), who provided free advice to the Burgesses on a landscaping project did owe a duty of care in tort relating to various services provided.
The court listed a number of services carried out by the defendant which were deemed to constitute professional services. The below list should therefore act as a warning to a party undertaking the same or similar services gratuitously and / or in lieu of a contract.
If a party is carrying out any of the below professional services, it is likely that such a party will owe a duty of care to exercise reasonable skill and care not to cause economic loss:
- Project management, including directing, inspecting and supervising the contractors' work, its timing and progress.
- Preparing designs to enable a project to be priced sufficiently to allow a firm budget estimate to be prepared.
- Preparing designs to enable a project to be constructed.
- Receiving applications for payment from a contractor / contractors, and advising and directing an employer in respect of these payments.
- Exercising cost control by preparing a budget of works, and overseeing actual expenditure against it.
Consider the context of any gratuitous professional services being given:
- Have they been voluntarily tendered?
- Are they provided in a ‘professional context and on a professional footing’, rather than an informal or social one?
- Is there an obvious relationship of proximity between the parties?
- Are you aware or ought to be aware that such services are likely to be relied upon?
- Is it foreseeable that losses would arise from a failure by a party to exercise reasonable skill and care in the provision of these services?
- Is this ad-hoc advice or lengthy work involving considerable input and commitment from the parties?
- Will 'payment’ take the form of a fee for services at a later phase of the works?
See the case notes: https://www.burges-salmon.com/news-and-insight/legal-updates/favours-for-friends-do-you-owe-them-a-duty-of-care/