Charles Edwards, Barrister and TECBAR Adjudicator, reviews the key case of Riva Properties Ltd & Ors v Foster + Partners Ltd [2017] EWHC 2574 (TCC) concerning a claim of professional negligence against Foster + Partners, worldwide renowned architects. The court reviewed amongst other things (para 10):
- The scope of Foster + Partners’ duty and retainer?
- Whether Foster + Partners were obliged to design the Development within a particular budget?
- Whether Foster + Partners were required to ascertain the budget for the scheme which they had designed during work stages A/B?
- Whether Foster + Partners were aware that their design for the 5-star hotel had to be value engineered to within the client’s budget of £100 Million?
- Whether Foster + Partners warned the client that it was not possible to value engineer their design to be within the client’s budget of £100 Million?
- Whether Foster + Partners were in breach of duty?
- What did the RIBA Job Book require with regard to Stages A and B?
- Whether Foster + Partners had been negligent in their advice/failure to advise?
- What sums if any the client could recover from Foster + Partners?
- … “the budget”. This term can, in the construction industry and in fact in general, have different meanings depending upon its context. In the context of this case, and this project (if not in all or at least most construction projects) it connotes an approximate outturn cost for the project; it can also mean the approximate level of the funds available to the developer or employer. I find that the meaning given to that phrase by the parties during 2007 and 2008 was the approximate outturn cost for the project. It could only be an approximation, certainly in the early stages of any project. A main plank of Fosters’ defence to the claim was that they are architects, not costs specialists, and cannot give costs advice. That is true, but that does not mean that “budget” in the sense that it was used by these parties throughout this project has no relevance to Fosters at all (which is effectively what Fosters were arguing in this case). Indeed, budget is used in the industry in general, and in society in general, as the amount of funds available or the amount which one wishes to spend…”.
- The Defendant failed in their contractual duty to ascertain the budget for the scheme with reference to the RIBA Job Book which as architects the Defendant was required to consider in order to exercise reasonable care and skill in the discharge of its
- The Defendant was in breach of duty for advising the Claimant that the scheme they had designed could be value engineered down to £100 Million from £195 Million.
- Architects are under a duty to ascertain the budget for a scheme in order to discharge their duty of reasonable care and skill.
- Architects will be in breach of duty for advising a client that a design/scheme for a project could be value engineered down to a particular budget if that could not be done.
- Architects if they are aware that their client’s expectations for a scheme/project cannot be achieved for the client’s budget, then they should advise their client accordingly as a failure to do so is likely to have grave consequences as set out above.
Charles Edwin Edwards MSt(Cantab) MSc(Lond) FCInstCES Barrister
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