In a judgment handed down yesterday, the Court of Appeal has given useful guidance about when a surveyor will owe a duty of care to third parties. The decision, in the case of Harrison v Maison Blanc and Others, will come as welcome relief to both surveyors and their professional indemnity insurers.
The claim arose out of injuries sustained by the claimants when the fascia attached to the front of a shop on Putney High Street collapsed on them as they were passing. Two of the claimants were seriously injured.
Maison Blanc was the occupier of the shop to which the fascia was attached. In 2005, it retained Active Commercial to carry out shopfitting works, including renovations to the shop front. When carrying out those works, Active removed soffit timbers which provided support to the fascia, meaning that the fascia was attached only by a line of screws at the top edge. Active then attached an awning to the fascia, increasing the load on it.
In 2006, the owner of the property decided to renovate the upper floors. The owner retained a contractor to carry out those works. Cluttons acted as contract administrators.
In March 2007, Maison Blanc experienced problems in opening and closing the awning. It complained to Cluttons, alleging that these problems resulted from damage to the awning box caused by the contractor when renovating the upper floors. Cluttons went to the property and inspected the awning. They then wrote to Maison Blanc to say that they thought the problems resulted from the retracting mechanism for the awning having moved slightly. Further correspondence passed between Cluttons and Maison Blanc regarding how to fix the problem, but in the end Maison Blanc agreed that it would get its own contractors to fix it. A few days later, the fascia collapsed, injuring the claimants.
The claimants sued Maison Blanc and Active. Maison Blanc and Active denied liability and suggested that the fascia had collapsed as a result of damage caused by the contractor when renovating the upper floors. They claimed that Cluttons was responsible for the contractor’s actions, alternatively that Cluttons, when inspecting the awning, should have appreciated that the front of the property was in a dangerous condition and warned Maison Blanc of this, and that they were liable for the claimants’ injuries. In the light of these allegations, Cluttons was joined to the proceedings.
Shortly before trial, Maison Blanc accepted that it was liable for the collapse of the fascia and therefore liable to the claimants. It sought an indemnity from Active and/or Cluttons.
At the trial, Active admitted that it had been negligent in removing the support for the fascia, which meant that the main issues for determination by the Judge were: whether Cluttons owed a duty of care to the claimants or Maison Blanc; whether Cluttons had breached any duty of care they owed; and, if so, how damages should be apportioned as between Active and Cluttons.
In considering whether Cluttons owed the claimants a duty of care, the Judge applied the threefold test approved in Caparo Industries plc v Dickman. He found that a reasonably competent surveyor would have foreseen that a failure to inspect the property with reasonable skill and care might cause physical injury to persons walking past the shop and that the requirement of foreseeability was therefore satisfied. He also found that Cluttons had a detailed knowledge of the property and knew it abutted on to the public footpath. He concluded that the ordinary reasonably competent surveyor would have known or appreciated that any failure to inspect and advise Maison Blanc in connection with a defect in the front of the property could result in personal injury to passers-by and accordingly that the requirement of proximity was satisfied. Finally, he held that it would be fair, just and reasonable to impose a duty of care to members of the public on Cluttons.
When considering whether Cluttons owed a duty of care to Maison Blanc, the Judge accepted that he should apply a synthesis of the threefold test, the assumption of responsibility test and the incremental test, as proposed in Bank of Credit and Commerce International (Overseas) Ltd v Price Waterhouse (No. 2). He found that a reasonable surveyor would have appreciated that, if he failed to carry out a proper inspection of the shop front, Maison Blanc might suffer economic loss in the form of liability to any passers-by injured by its collapse. He decided that there was sufficient proximity between Cluttons and Maison Blanc to give rise to a duty of care, because: Cluttons knew the property well; Maison Blanc had asked them to investigate a problem; and they had agreed to do so. He concluded that Cluttons had assumed a responsibility to Maison Blanc to carry out their inspection with reasonable skill and care and that Maison Blanc had relied on Cluttons in deciding how to act.
Having found that Cluttons owed duties of care to the claimants and Maison Blanc, the Judge held that Cluttons had breached those duties in failing to notice that the front of the property was in a dangerous condition and to report this to Maison Blanc. He found that this breach had caused the losses suffered by the claimants and Maison Blanc and apportioned liability between Active and Cluttons 89:11. Cluttons appealed the decision.
The Court of Appeal noted that the question of whether Cluttons owed a duty of care to members of the public could not be answered without taking into account the circumstances in which Cluttons came to be involved in inspecting the awning. Of particular significance was the role in which Cluttons was acting, which was as agents for the landlord in connection with the complaint that Maison Blanc had made regarding damage to the awning. Cluttons had not been asked to advise Maison Blanc, nor to inspect the shop front on its behalf. Rather, they had inspected the awning for the purpose of determining whether the landlord had any liability to Maison Blanc and it was in that context that the relationship between Cluttons and members of the public fell to be determined.
The Court held that the trial Judge had placed too much emphasis on foreseeability of harm, almost to the point of treating it as sufficient to establish proximity between Cluttons and members of the public. However, foreseeability of harm on its own is not enough. Cluttons’ involvement had nothing to do with the safety of passers-by: their role was simply to see whether the landlord might be liable for the damage to the awning. In these circumstances, there was not a sufficient degree of proximity between Cluttons and the claimants to give rise to a duty of care on Cluttons’ part.
The Court then considered whether Cluttons owed a duty of care to Maison Blanc. The Court noted that the Judge’s conclusion on this issue was based on his finding that Cluttons undertook a responsibility to Maison Blanc to inspect the shop front and to report their findings, so that Maison Blanc became in effect a client of Cluttons. That conclusion was inconsistent with the adversarial nature of the relationship between Maison Blanc and Cluttons. The Court concluded that the Judge was wrong to find that Cluttons knew that Maison Blanc would rely on them, or that it was reasonable for Maison Blanc to do so, which findings were not supported by the evidence. In fact, the nature of the relationship between Cluttons and Maison Blanc was inconsistent with an assumption of responsibility by Cluttons. Taking all the above into consideration, the Court held that Cluttons did not owe a duty of care to Maison Blanc.
Having reached that conclusion, the Court did not need to decide whether the Judge’s findings regarding negligence and causation were correct. However, the Court thought there was much to be said for Cluttons’ argument on causation: in effect, Maison Blanc had taken the very steps which it said Cluttons should have advised it to take and so it was difficult to conclude that any negligence by Cluttons caused the claimants’ injuries or Maison Blanc’s loss. In the light of its findings on duty of care, the Court allowed Cluttons’ appeal and held that Active’s claim for a contribution from Cluttons failed.
The Court of Appeal’s Judgment does not involve any new principles of law but rather involves the application of existing principles as to when a party will be found to owe a duty of care to third parties. It is a welcome reminder that the circumstances in which the Courts will impose on a party a duty of care to someone who is not their client are tightly circumscribed and will not readily be expanded. It is also a useful reminder of the need to look closely at the relationship between a party and those to whom he is alleged to owe a duty of care, to see whether the requirements of foreseeability and proximity exist, before moving on to consider whether it would be just and equitable to impose a duty. Where the parties are in what is essentially an adversarial relationship, it is unlikely that a Court will conclude that a duty of care exists, either to the third party or the general public.fore moving on to consider whether it would be just and equitable to impose a duty. Where the parties are in what is essentially an adversarial relationship, it is unlikely that a Court will conclude that a duty of care exists, either to the third party or the general public.