Proving that an architect or engineer was negligent is only half of a claim. The other half is showing what the negligence cost, in a form the law recognises. This guide explains the principles the courts in England and Wales apply. It does not, and cannot, say what any claim is worth.
The starting point
In contract, damages aim to put the claimant, so far as money can, in the position they would have been in if the contract had been properly performed. In Riva Properties Ltd v Foster + Partners Ltd [2017] EWHC 2574 (TCC), the judge described both the usual "expectation" measure and the alternative of claiming expenditure wasted in reliance on the contract as ways "to put the claiming party in no worse a position than if the contract had been properly performed".
The question is always a comparison. What would have happened with a competent design, inspection or piece of advice, and how does that compare with what actually happened? The answer depends on the client's own likely choices as well as the professional's error: see budgets and cost estimates for an example where part of a claim failed on that comparison.
Cost of repair, or loss of value?
Where a design or inspection failure leaves a building defective, the claim is often for the reasonable cost of putting it right. The courts will not award that cost where it would be unreasonable to incur it.
In Ruxley Electronics and Construction Ltd v Forsyth [1995] UKHL 8, a swimming pool was built shallower than the contract required. The trial judge found the pool was safe to dive into, that there was no evidence the shortfall had reduced its value, that the only way to achieve the specified depth was to demolish and rebuild it, and that this cost "would be wholly disproportionate". The House of Lords restored his judgment, which refused the rebuilding cost and awarded a modest sum for loss of amenity instead.
Lord Bridge said that to hold that the loss is the cost of reinstatement, "however unreasonable it would be to incur that cost, seems to me to fly in the face of common sense". Lord Jauncey put it this way: "If it is unreasonable in a particular case to award the cost of reinstatement it must be because the loss sustained does not extend to the need to reinstate."
Ruxley was a claim against the builder of the pool. The same question, whether it is reasonable to measure the loss by the cost of putting things right, can arise when that cost is claimed from a designer or inspector.
Where the complaint is about a report relied on when buying a property, the courts have generally focused on the difference in value rather than the cost of repairs: the surveyor guide on diminution in value explains that approach.
Wasted expenditure and other losses
Other heads of loss can include fees wasted on a design that could not be used, the cost of alternative accommodation while remedial work is done, additional professional fees for putting the problem right, and delay costs. Each has to be shown to have been caused by the breach and to be the kind of loss the law allows. In Riva, fees on the abandoned scheme were recovered because they would have to be spent again, while a claim for lost hotel profits failed on causation.
Claims in tort: the economic loss limit
A client with an appointment can usually claim in contract and, alongside it, in negligence, because a professional is taken to have assumed responsibility to the client (Robinson v P E Jones (Contractors) Ltd [2011] EWCA Civ 9). The tort claim matters mainly for time limits.
The position is different for someone with no contract, such as a later buyer. In Murphy v Brentwood District Council [1991] UKHL 2, Lord Bridge said that if a defect "becomes apparent before any injury or damage has been caused, the loss sustained by the building owner is purely economic". He went on: "These economic losses are recoverable if they flow from breach of a relevant contractual duty, but, here again, in the absence of a special relationship of proximity they are not recoverable in tort."
People who did not engage the professional may still have a claim through:
- the Defective Premises Act 1972, s.1 (new dwellings) or s.2A (work to existing dwellings completed after 28 June 2022), which impose duties owed to later owners;
- a collateral warranty, a separate contract the professional gives to a buyer, tenant or funder; or
- the Contracts (Rights of Third Parties) Act 1999, where the appointment "expressly provides" that a third party may enforce a term, or a term "purports to confer a benefit" on an identified third party (s.1).
Caps and exclusions in the appointment
Appointments often limit the professional's liability, for example by a financial cap or a net contribution clause.
- Consumers: a term "is not binding on the consumer to the extent that it would exclude the trader's liability" for failing to perform the service with reasonable care and skill (Consumer Rights Act 2015, s.57(1)). A term restricting that liability is not binding if it would prevent the consumer from recovering the price paid (s.57(3)), and an unfair term "is not binding on the consumer" (s.62(1)).
- Businesses: a term restricting liability for negligence must satisfy the requirement of reasonableness in the Unfair Contract Terms Act 1977, as the Court of Appeal explained in West v Ian Finlay & Associates [2014] EWCA Civ 316.
What a solicitor will want from you
- The appointment, including any cap, exclusion or net contribution clause.
- Expert evidence on what is wrong and what it would reasonably cost to put right, with more than one quote.
- Invoices for anything already spent: remedial work, fees, accommodation, storage.
- Any valuation evidence, if the property's value is said to be affected.
- What you would have done differently with competent design or advice.
- For a later owner: how and when you acquired the property, and any warranty or rights you were given.
This guide is general information about the law of England and Wales. It is not legal advice. CasePoint does not value claims. What is recoverable depends on the facts, the contract and expert evidence.
Frequently asked
Will I get the full cost of putting the building right?
Often the reasonable cost of remedial work is the measure, but not always. In Ruxley Electronics v Forsyth the House of Lords refused to award the cost of rebuilding where that cost was out of all proportion to the benefit and it would have been unreasonable to incur it. What is reasonable depends on the facts and expert evidence.
I bought the house from someone else. Can I sue the original architect in negligence?
It is difficult for the cost of repairs. In Murphy v Brentwood DC the House of Lords treated the cost of repairing a defect discovered before it causes injury or damage to other property as pure economic loss, recoverable for breach of a contractual duty but not, without a special relationship of proximity, in tort. A later owner may have other routes, such as the Defective Premises Act 1972, a collateral warranty or a right under the Contracts (Rights of Third Parties) Act 1999.
Can the architect's contract cap what I can recover?
It can try. In a consumer contract, a term cannot exclude liability for failing to use reasonable care and skill, and an unfair term is not binding. In a business contract a limit can apply if it satisfies the reasonableness test in the Unfair Contract Terms Act 1977. The wording and the circumstances matter.
Can CasePoint tell me what my claim is worth?
No. CasePoint does not value claims. How much is recoverable depends on the documents, expert evidence and the choices you would have made with competent advice, and only a solicitor who has seen them can advise.