Contractual Interpretation And Lead Consultants' Liability For Others

Contractual Interpretation And Lead Consultants' Liability For Others

The recent Scottish decision in Midlothian Council v Bracewell Stirling [2018] CSIH 21 has confirmed what any lead consultant would have hoped in relation to his responsibility for others on the construction team.

Midlothian Council (Midlothian) pursued a claim against Bracewell Stirling (Bracewell) as architects and lead consultants in relation to losses sustained on a social housing development. A number of its occupants had required hospital treatment after the effects of Carbon Dioxide poisoning. The scheme was later condemned and demolished, and Midlothian pleaded loss at around £12 million.

Two architects inside an empty building

The Appeal to the Inner Court in Scotland related to whether Bracewell had assumed responsibility for all other consultants on the project and any negligence caused by them. In this case the installation of gas membranes would have prevented the ground gases from entering the property but there was a dispute over who should bear responsibility for their omission.

Bracewell’s Appointment

The terms of Bracewell’s appointment provided that they assumed responsibility for the co-ordination of the works carried out by all of the consultants and for arranging ground investigations. Midlothian argued that Bracewell were thereby responsible for the negligence of those other consultants.

Bracewell argued that they merely had an ordinary obligation to co-ordinate the consultants; it could not have been in the contemplation of the parties that broad liability would attach to Bracewell in the event of any failure by any of them, including consultants appointed directly by Midlothian and/or consultants appointed before Bracewell themselves had been engaged.

The Court’s Decision

The Court determined that Bracewell could not be found to have accepted liability for all consultants who would be engaged on the scheme. Whilst there could be an obligation implied relating to sub-consultants engaged directly by Bracewell, it would be too onerous to imply an obligation for consultants with whom they had no contractual relationship.

Commentary

Whilst this is a good outcome for consultants and their PI insurers, and avoided what would have been a difficult position for any lead consultant, the outcome should be tempered with caution for two reasons.

  1. The Court went on to say that it would be possible in principle for lead consultants to bind themselves in to such a broad obligation provided that the contract contained explicit terms to that effect; and
  2. Consultants continue to be vicariously liable for the negligent acts/omissions of their own sub-consultants in the usual way.
Graphic of man selecting building icon

The first point reflects the well-established principle of freedom of contract – unless the contract wording is ambiguous or unenforceable (e.g. unfair or illegal) then the courts will simply attribute ordinary meaning to that wording on the basis that it accurately reflects what the parties intended. The fact that the words might convey an onerous obligation will not in itself dissuade a judge for giving force to the relevant term.

Similarly, the second point is nothing novel, and whilst consultants will generally enjoy rights of recovery against their sub-consultants they may in practice experience difficulties if those sub-consultants are inadequately insured and/or no longer trading.

Precedence

It should be noted that as this is a Scottish Inner Court decision, it is binding as a precedent only in Scotland. However, it is likely to be considered persuasive on lower courts in England & Wales.

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