In the case of Fitzroy Robinson Limited v Mentmore Towers Limited, the High Court considered whether a service provider would be liable for failure to inform its client of an employee's inability to continue to take a key role in the provision of that service.
Fitzroy Robinson Limited (FRL) were architects. Mentmore Towers (MT) was their client. FRL was engaged to act as architects in connection with a scheme to develop various properties for MT. The key member of FRL's team was Jeremy Blake, a director who put together the two FRL bid documents and was involved in all the pre-contractual meetings with MT. MT was told that Mr Blake would be the team leader throughout the project on behalf of FRL. Prior to the contracts being signed, Mr Blake resigned. FRL did not tell MT about the resignation as it feared that MT would pull out of the project. The contract for the work was signed. FRL subsequently told MT about Mr Blake's resignation. MT brought proceedings against FRL for breach of contract and negligent and fraudulent misrepresentation in respect of FRL's failure to inform them of Mr Blake's resignation.
The High Court held that FRL were in breach of contract and had made a fraudulent misrepresentation by deliberately withholding information about Mr Blake's resignation from MT.
This case was decided on its facts but a general practical point does emerge from this case. Businesses should be aware that if one of their employees is key to a project they should keep their client appraised of any changes in that employee's ability to act in that capacity. Otherwise they could find themselves liable for breach of contract and (depending on the timing of the resignation) misrepresentation.