In an interesting case, the Technology and Construction Court has considered how an architect's fees should be assessed in circumstances where the parties dispute whether professional services have been properly performed by an architect. Of wider interest, the Court also considered the issue of vicarious liability for the tort of harassment in relation to the activities of an architect's debt collectors.
Michael Phillips Architects Limited ("the Architect") was instructed to assist Mr and Mrs Riklin with the renovation and refurbishment of a property. Mr and Mrs Riklin had no knowledge of construction projects and did not execute a formal professional appointment or agree the basis of the Architect's fees. A dispute arose in relation to the Architect's fees. The Architect initially demanded payment of £147,387.04 and engaged a debt collection agent to try and obtain payment from Mr and Mrs Riklin. The Architect then commenced Court proceedings and claimed payment of its reasonable fees. Mr and Mrs Riklin counterclaimed for losses caused by the Architect's alleged neglect in carrying out its services. The Court was required to assess the reasonable value of the Architect's services. The Court found that a reasonable percentage rate for the Architect's fee was 9%, which amounted to £48,353.00. In reaching this decision, a deduction of 25% had been made to the fee on the basis of a "Gestalt" approach. The Court considered that the individual elements of an architect's full service should achieve an overall result in excess of the sum of their parts. As the Architect had failed to carry out certain individual elements of its services correctly, the overall value of the project was diminished. The Architect's fee was therefore reduced to reflect this.
Mr and Mrs Riklin counterclaimed for a number of different losses, most of which were allowed by the Court and they were awarded £58,880.98. Of most interest, the Court found that the Architect was vicariously liable for harassment and damage caused by the debt collection agent that it had instructed (such harassment having resulted in £15,465.98 of damage to Mr Riklin's sports car). The Court emphasised that such liability could arise even if the principal is unaware of the harassment being undertaken.
This case is useful in setting out the way in which a Court may assess an architect's fees. For example, the failure of an architect to perform one part of its service may affect the overall value of all services undertaken. The case also highlights the fact that parties may be held vicariously liable for the actions of debt collectors, even if they have no knowledge of what actions the debt collector is carrying out.
Case: Michael Phillips Architects Limited v Riklin and Another  EWHC 27 (TCC)