In a recent Court of Appeal decision (Robinson v PE Jones (Contractors) Limited), Jackson LJ, formerly judge in charge of the Technology and Construction Court (TCC), has brought much needed clarity on the long disagreement between respective TCC judges as to the issue of builders’ liability and whether they can owe concurrent duties in tort as well as those in contract for pure economic loss.
D built and sold a house to C in 1992. In 2004, the house needed major remedial works due to alleged latent defects in D's work. C sued D for the costs of rectification in tort relying on an extended limitation period, any claim in contract being plainly statute-barred. At first instance, the judge decided that a concurrent duty to avoid damage in the form of pure economic loss can arise between the parties to a building contract in relation to workmanship. Further, there was no basis in principle for distinguishing between the case of a professional designer and a nonprofessional builder in relation to the existence of a concurrent duty of care.
In a characteristically crisp decision, Jackson LJ confirmed that, unlike the position applicable to professional persons/retainers, it would be nonsensical to say that a builder, by virtue of its contract assumes any tortious duty of care to the client. Building contracts come in all shapes and sizes and the law does not automatically imposed upon builders tortious duties of care creating a liability for economic loss.
The settled law is that a builder, by virtue of his contract to build a building, does not assume any liability in tort in relation to defects in the building giving rise to pure economic loss. Indeed, Stanley Burton LJ went further by saying that the House of Lords decisions in Anns v Merton and Junior Books v Veitchi must now be regarded as heretical.