On the difficult question of whether tortious liability can arise concurrently with a contractual duty of care where loss is purely economic, the Court of Appeal of England and Wales has, in respect of construction contracts, reconciled the current conflicting strands of authorities and says that it should now be regarded as settled law that a builder or vendor of a building does not, by reason of his contract to construct or complete a building, automatically assume any liability in the tort of negligence in relation to economic loss arising from defects in the building. In other situations, however, such as where the parties are in a professional relationship, tortious liability may still arise concurrently with contractual liability in respect of economic loss. In James Robinson v P E Jones (Contractors) Ltd  EWCA Civ 9, the Court held that PE Jones (Contractors) Ltd did not owe James Robinson a duty of care in tort in respect of building defects that had arisen over 12 years after completion. To impose such liability would make the law of contract wholly subordinate to the law of tort, the Court said, and would, in the circumstances of this case, have been inconsistent with the terms of the contract, which were clear and simple and which allocated risk sensibly between the parties. Further, the contractual clauses that sought expressly to limit liability in tort by PE Jones were effective as they satisfied the requirement of reasonableness under the Unfair Contract Terms Act 1977.
It is not clear from the judgment what could otherwise have amounted to an “assumption of responsibility” on the part of PE Jones so as to render it liable in tort. However, even if the Court had found that PE Jones did, in fact, owe Mr Robinson a duty of care and was liable in tort, such liability had been expressly excluded (and had been found to be reasonable) in any event. What is clear, however, is that there is no automatic assumption of concurrent liability in tort for pure economic loss in a building contract. Further, it will depend on the facts and circumstances of the case and the relationship between the parties as to whether there is an “assumption of responsibility” such that liability in tort for pure economic loss can be established. It is suggested that professional relationships involving the giving of advice on which the other party relies might amount to there being an “assumption of responsibility”, but other than that, no further clarification was provided.