When may an architect or engineer be liable in negligence for recommending a procurement route inappropriate for the project?
Procurement advice given at the outset can decide whether a project meets its budget. Whether a professional is liable for the wrong method turns on the duty to advise and, more often, on proving that a better method would have cost less.
Yes: a professional advising on procurement can be negligent for recommending a method unsuited to the client priority, in particular one that surrenders required cost certainty, but the client must prove that a different method would have cost less and that it would have taken the advice
Yes, an architect or engineer can be liable for advising a procurement method unsuited to the project, but the claim is difficult. The adviser owes a duty to recommend a method that fits the project and the client's priorities, and where cost certainty is paramount to steer towards a method that delivers it and to manage the decisions the client must make. A court found an architect negligent for advising a two-stage tender with approximate quantities on a project whose overriding requirement was a cost ceiling, where most of the bill was provisional and the final account ran far over budget; the architect should have advised a phased approach and had to pay the difference. The hard part is causation: the client must prove that a different method would have cost less and that it would have taken the advice. Without that proof, even poor advice recovers nothing.
| The duty | Recommend a method suited to the project and the client priority |
| Cost certainty | Where it is paramount, steer to a method that delivers it |
| Breach | The wrong method, or failing to manage the client decisions |
| Causation | The client must prove a different method would have cost less |
| Loss | Without proof of loss, poor advice recovers nothing |
The problem
An architect or engineer usually advises on procurement at the very start of a project: lowest price or partnering, employer design or contractor design, which standard form. The choice can drive the whole outcome. If the method chosen turns out to be wrong for the project, can the client sue the professional for negligent advice? It can, but the claim is harder than it looks.
The duty to advise on procurement
A professional advising on procurement owes the client a duty to recommend a method suited to the project and its priorities. Where cost certainty is the client's overriding requirement, the adviser must steer towards a method that delivers it, and must tell the client what decisions are needed and by when. Getting the method wrong, or failing to give the advice that would have protected the client's priority, is a breach of that duty.
The leading case
An architect advised a two-stage tender leading to a contract with approximate quantities for the redevelopment of a store that had to stay open during the works, where the overriding requirement was that the cost should not exceed a set ceiling. Because of the tight timescale most of the approximate bill was provisional, and the final account ran far above budget with thousands of variations. The court held the architect negligent: its overriding obligation was to keep the cost within the ceiling, it should have advised a phased approach giving cost certainty even at the price of later completion, and it had failed to tell the client which decisions were needed and when. Comparing the actual cost with the cost of the phased approach, the architect had to pay the difference.
The difficulty of proving loss
The obstacle in these claims is causation. The client must show that a different method would in fact have cost less, and that it would have taken the better advice, which is often hard. A pre-tender estimate of piling costs in one case was half the actual cost, yet negligence was not established. In a further case, the client would have taken the same course whatever the adviser said, so there was no loss. Even in the store case the court had to reconstruct what a phased approach would have cost, helped by the experts, and to assume the client would have accepted advice it never received. The claim succeeds only where the loss caused by the wrong method can be proved.
Practical steps
Advise on procurement against the client's stated priority. Where cost certainty is paramount, recommend a method that delivers it.
Tell the client what decisions are needed and by when. Failing to manage those decisions is part of the negligence.
Do not let a tight timescale push you into a method, such as approximate quantities with heavy provisional content, that surrenders cost control.
As a client, record your priority at the outset. It defines the advice you were owed.
To recover, be ready to prove that a different method would have cost less and that you would have taken the advice.
Keep the records that show the cost of the road not taken. Without them, causation and loss are hard to prove.
Authorities
| Authority | Citation | What it decides |
|---|---|---|
| Plymouth and South West Co-operative Society Ltd v Architecture Structure and Management Ltd | [2006] EWHC 5 (TCC) | An adviser was negligent for recommending a procurement method that surrendered the cost certainty the client required, and for failing to manage the client decisions |
| Copthorne Hotel v Arup Associates | (1996) | A pre-tender estimate that proved half the actual cost did not, on the facts, establish negligence |
| Gable House Estates Ltd v Halpern Partnership | (1996) | No recovery where the client would have taken the same course regardless of the adviser advice |