Advising traditional procurement: Have I really been negligent?

Rudi Klein’s article (17 September, page 57) suggesting that advisers who recommend traditional procurement routes could well be negligent reaches a striking conclusion. It is
also wrong.

Rudi’s starting point is that traditional procurement is wasteful, confrontational and ignores collaborative working practices. He poses an exam question involving design-and-build procurement where the successful contractor and its subbies are chosen after they have submitted the lowest priced bids. As often happens in design-and-build projects, the main designers - the architect and engineers - are novated to the contractor. The design they produced prior to novation is defective and inadequate and the project is hit by disputes and delays, resulting in the overall project cost doubling; a scenario that we are told occurs (with varying severity) on most construction projects in the UK.

Relying on Constructing Excellence’s demonstration projects, guidance from the Strategic Forum for Construction, the Wembley litigation between Multiplex and Mott MacDonald and a National Audit Office report from 2001, Rudi concludes: “In principle, all the weight of modern recommended practice supports the case that there has been a breach of the duty to take care” - the existence and breach of that duty being two key components to a negligence action. He also alleges that the advisers who recommended that procurement route (architects
and solicitors are singled out) can expect claims.

I should, at this stage, declare an interest. I often assist clients involved in what Rudi would categorise as traditional procurement. And I don’t think that my firm or other construction
solicitors doing similar work are negligent.

Here’s why.

There are three legal hoops to jump through to establish a claim in negligence: that the wrongdoer owed a duty of care, that the duty was breached and that the breach caused the innocent party (the client in this case) loss. I accept that I owe the client a duty of care; broadly speaking, to act to the standard of a reasonably competent construction solicitor. I also owe a similar duty as a result of my contract with my client.

Have I breached my duty of care?
This is a difficult argument for Rudi to prove, notwithstanding the evidence he cites. There are lots of reasons why, not least that many solicitors help clients with projects like this. Rudi
may not like it, but there is a strong body of opinion that the traditional method of procuring buildings, despite its flaws, still has a role to play. While that opinion exists, a negligence case is difficult to prove.

More importantly, it would be rare for the solicitor’s advice on its own to decide the procurement route taken by the client. We certainly have input, we explain the legal issues that may arise and draft and negotiate the contracts, but we don’t make the decision. Our clients - many of whom are informed and experienced purchasers of construction services - decide which course of action they want to pursue.

That said, let’s assume I have breached that duty of care. Has my defective advice caused my client its loss? This is an even bigger hurdle for Rudi to overcome. Key to his argument is that the contract documents - and the balance of risk and reward they establish - are the sole cause of the delay and disruption.

But not even the most arrogant of lawyers would ascribe that much power and influence to the contracts they draft. In Rudi’s example, poor decisions by the contractor and subcontractor and the defective design appear to be the root cause of the problems. Indeed, the lawyers may have helped the contractor and the client get adequate compensation.
A well-drafted deed of novation and the client’s collateral warranties will ensure that both have recourse against the architect and engineer for any defects or inadequacies in their design.
I accept traditional procurement has its problems. But the lawyers aren’t one of them.

Stuart Pemble is a partner at Mills & Reeve