17th July 2017
Free advice can be costly
In a warning to all professional advisers, in the recent case of Basia Lejonvarn v Peter and Lynn Burgess an architect who provided friends with some freebie advice ended up on the receiving end of a claim for negligence. It was found that despite the absence of a contractual relationship, the advice had not been given with the requisite duty of care.
The Architect had agreed to help her friends with a garden landscape project. She arranged for a contractor to undertake earthworks and hard landscaping. The intention had been that a fee based arrangement would be put in place for the later design work stages, but the project never got that far. Friends do from time to time fall out and that is what happened here. Legal action was commenced against the Architect over the quality and progress of the landscaping work.
The Court decided that there was insufficient evidence to support the existence of a contract between the parties – the arrangements had been too informal – but due to long standing principles of law the Architect still owed her friends a duty of care given that she possessed a special skill and had assumed responsibilities on which her friends had relied. The Architect had acted not just as a facilitator, but as a project manager and simply because she was not charging for her services that did not devalue their importance.
Although provided free of charge the services undertaken were provided on a professional footing and it was relevant that the Architect had an expectation that the free of charge stage would lead to later paid work. The Court said that although not her clients in a contractual sense, the friends were the Architect’s clients in a professional capacity. There was an assumption of responsibility and it was appropriate, fair, just and reasonable for a duty of care to arise to exercise reasonable skill and care in the advice provided.
The other issue the Court had to tackle was the principle that to recover what are termed economic losses (i.e. financial losses relating to the costs of repair, reinstatement) that it is necessary to base such a claim on the existence of a contract. There are though some exceptions to that principle including where the loss in question arises from negligent professional services. The Architect had a duty to exercise reasonable skill and care in directing, inspecting and supervising the contractor's work, including its timing and progress and the losses in question could be recovered on that basis.
The Architect had produced designs for the landscaping works and knew that costs and an accurate budget were crucial to her friends. She had also provided, having offered to do so, a service which included receiving applications for payment from the contractor and advising the respondents about their payment.
A cautionary tale which all professionals need to account for. Many do give preliminary advice for free, with a view to being able to charge at later stages. A perfectly valid and understandable commercial stance. Just ensure that for advice of any substance that you ensure that suitable terms and conditions of contract are in place before going too far, just in case!
For more information please contact Colin Jones on 01223 461155 or click here to email Colin.