when can a professional consultant rely on specialist advice to discharge its responsibilities?
In the recent case of Cooperative Group Ltd v John Allen Associates Ltd (October 2010), the technology and construction court (TCC) has considered whether a consultant’s responsibilities can be discharged by reliance on specialist advice.
Cooperative (the landowner) engaged a developer to develop a supermarket. The developer engaged a building contractor and appointed the consultant, John Allen Associates as civil and structural engineer. The consultant recommended a “vibro-replacement” method of stabilising the ground as soft clay was found at the site. The building contractor engaged Pennine Vibropiling Ltd as a sub-contractor to design and carry out the ground improvement scheme.
The sub-contractor used vibro-replacement stone columns to stabilise the ground and then a concrete floor slab was laid, upon which the supermarket was built. The floor slab settled and began to slope and all parties agreed that remediation works were required.
Cooperative eventually commenced litigation against the consultant, who had provided a collateral warranty to Cooperative, claiming damages for breach of the consultant’s collateral warranty. In particular, Cooperative claimed that the consultant was in breach of the obligation to exercise reasonable skill care and diligence in the performance of its duties to the Client under the Appointment which was contained in the collateral warranty.
The landowner’s claim failed on the facts, but it also failed because it was held that the consultant had acted in accordance with its duty of care under the collateral warranty.
The court considered whether the consultant was reasonable in relying on specialist advice and whether relying on specialist advice would discharge its responsibilities, and concluded that:
|1||A consultant does not, by the mere act of obtaining advice or a design from another party, divest itself of its duties in respect of that advice or design.|
|2||A consultant can discharge its duty to take reasonable care by relying on the advice or design of a specialist, provided that it acts reasonably in doing so.|
|3||In determining whether a consultant acted reasonably in seeking the assistance of a specialist to discharge its duty to the client, the court has to consider all the circumstances, which include:|
|3.1||whether assistance was taken from an appropriate specialist;|
|3.2||whether it was reasonable to seek assistance from other professionals, research or other associations or sources;|
|3.3||whether there was information that should have led the consultant to give a warning;|
|3.4||whether and to what extent the client might have a remedy in respect of the advice from the other specialist; and|
|3.5||whether the consultant should have advised the client to seek advice elsewhere or should itself have taken professional advice under a separate retainer.|
In summary, the court concluded that whether a consultant discharges its duty to take reasonable skill and care by relying on the advice of a specialist depends upon whether, in all the circumstances, they acted reasonably in doing so.
This case highlights the importance of creating a direct contractual relationship between the sub-contractor and the landowner, through a collateral warranty. If the consultant is able to discharge its duty by relying upon the specialist the landowner may be left without a remedy unless it can claim against either the building contractor or the sub-contractor.
For more information on any of the issues raised in this article, please contact our specialist Construction team.