The Court of Appeal in Lejonvarn v Burgess has upheld the first instance decision that an architect who provided professional services to her friends, free of charge, owed them a duty of care in tort to exercise reasonable skill and care.
The Court of Appeal’s decision provides a salutary warning for professionals to exercise caution when giving free advice.
Mr and Mrs Burgess and Mrs Lejonvarn were former neighbours and friends. Mrs Lejonvarn was an experienced American qualified architect who had decided to set up her own practice. The Burgesses asked for Mrs Lejonvarn’s assistance with a landscaping scheme for the redevelopment of their garden after obtaining a quote from a landscape designer of around £175,000 plus VAT.
Free of charge, Mrs Lejonvarn secured a different contractor who provided a quotation for carrying out the earthworks and hard landscaping for a more modest budget. She also visited the site occasionally once the work commenced.
Mrs Lejonvarn intended to provide subsequent design work for which she would charge a fee. However, the project did not get that far before the Burgesses replaced Mrs Lejonvarn, unhappy with the quality and progress of the work and a significant costs overrun.
A trial of two preliminary issues was ordered and Alexander Nissen QC (sitting as Deputy High Court Judge in the TCC) concluded: (1) there was no contract between the parties; but (2) Mrs Lejonvarn owed the Burgesses a duty of care in tort to exercise reasonable skill and care when providing her professional architectural and project management services.
The decision on appeal
The Court of Appeal addressed six grounds of appeal and reached the following conclusions:
- While there was no contractual relationship and no consideration, the services were akin to a contract. They were not provided on an ad hoc basis, but over a lengthy period of time involving significant expenditure by the Burgesses.
- Although there was no payment for the services, Mrs Lejonvarn hoped to receive payment for services to be provided later and to use her involvement in the project to promote and grow her business.
- The facts supported a conclusion that the relationship was a professional one, not informal or social. There was a relationship of proximity and Mrs Lejonvarn held herself out as having professional skills.
- There had been an assumption of responsibility by Mrs Lejonvarn and she was aware that the Burgesses would be relying upon her to properly perform the services. It was fair just and reasonable to impose a duty of care.
- In contrast to a contractual duty, Mrs Lejonvarn was not under a tortious duty to provide any professional services. However, to the extent that she did so, she was under a duty to provide those services with reasonable skill and care.
- Mrs Lejonvarn owed a duty of care to inspect and supervise the works carried out by the contactor to protect against economic loss, even though the contractor owed no common law duty of care to protect against such loss.
- Mrs Lejonvarn was not under an obligation to provide designs but she did so. Therefore, she was under a duty to perform her design work with reasonable skill and care and to enable a fairly firm budget estimate to be prepared.
- In providing the service of receiving and advising on applications for payment from the contractor, preparing a budget for the works and overseeing actual expenditure, Mrs Lejonvarn owed a duty to exercise reasonable skill and care.
It would be easy to read too much into this case and mistakenly conclude that any sensible construction professional should remain tight lipped when asked by a friend for some informal advice down the pub.
However, the court rejected Mrs Lejonvarn’s contention that she had merely provided ad hoc advice in a non-commercial, informal and social context. Instead, the court placed great emphasis on the fact that Mrs Lejonvarn played a significant role in a substantial project and whilst her services were provided free of charge they were provided on a professional footing and with an expectation of future paid work.
Even if intending to provide a service free of charge, it is prudent to set out in writing precisely what will be done and to set out any limits to the scope of your duty and liability. That creates a risk of being sued under that contract and to an allegation that the contract gives rise to concurrent duties in tort if things go wrong and a claim is made. However, at least the professional should know where they stand and if the retainer is carefully drafted, it is probably a risk worth taking.
At the same time, the construction professional should give serious consideration to whether any professional indemnity insurance cover they have in place will cover them for services provided for free to a friend, as most PI policies usually only cover services provided in the course of a professional’s business.