The recent court case of Broster v Galliard represents another chapter in the long-running “complex structure theory” debate.
This is a legal principle that often arises when considering the duty owed by a person or organisation to a third party in tort (outside of contract) where damage is caused to property.
Loss that is unrelated to physical injury to a person or damage to another (second) property is called economic loss and is generally irrecoverable in tort, although there are some exceptions.
The complex structure theory is an attempt to circumvent the fact that economic loss is generally irrecoverable in tort. Broadly speaking it seeks to allege that certain structures should be regarded as comprising more than one property and that therefore if one part of the structure (property 1) causes damage to another part (property 2), the cost of the repair of the damage to property 2 is recoverable.
Galliard was the developer employer who employed ECL to design and build a terrace of six three-storey townhouses with a common roof. Galliard sold the properties to individual purchasers, who brought the claim against Galliard and ECL.
The claim was the result of an incident on 8 January 2005 when high winds lifted the terrace roof to a height of 1 metre, before it fell back onto the walls, causing damage to them. ECL were said to have failed to adequately secure the roof to the building.
Galliard had no real assets, having been placed in liquidation. The claimants, who were the homeowners of the townhouses, had to prove that they had a sustainable cause of action against ECL.
The claimants argued that the terrace actually formed a “complex structure” such that the individual properties within the terrace were individual parts, and the roof itself should also be considered to be an individual part. They argued that the roof had caused damage to the walls, alternatively that the failure of fixings in one property had led to damage to the other properties. Without such a finding, the situation would be that the only damage was to “the thing itself” (ie, the terrace of houses) and this would be economic loss and therefore not recoverable in tort.
The court confirmed that it was well established that a builder’s duty of care generally did not extend to damage to the building itself. If a builder carelessly constructs foundations, so the building on top of them is damaged, the loss suffered (save for losses in relation to any physical injury ) (outside of contract) are not recoverable, be that in relation to the damage to the building on top of the foundations, or to the foundations themselves. If the building collapsed injuring a person or damaging a property across the road, the builder's liability would extend to injury to such person, and damage to the property across the road. Whilst this is well established, it can be a difficult to conceptualise. The judge found that the houses were built as one construction, being physically linked to and homogenous with each other and sharing, at the very least, a common roof. He considered that it would be:
“wholly artificial to argue that the segment of the roof over each individual terraced unit was to be considered as separate from the whole roof or indeed that the roof as a whole was to be considered as separate from the walls of the units below. It follows that there is damage "to the thing itself". Put another way, the duty of care does not extend to protect the owners of the property from damage to the roof itself or to the units below caused by the dislodgement of the roof… whether or not the "complex structure" theory still has a material part to play in the law of negligence relating to buildings and structures, it does not extend to a case such as this.“
The judge explained why the decision in the case was not as unjust or unreasonable as it may appear. The homeowners had protection of NHBC warranties, they may also have had some protection under the Defective Premises Act 1972 and could have obtained detailed structural surveys when they purchased. Insurance for storm damage may also have been another avenue for redress.