The purpose of the City of London Law Society novation agreement, according to Paul Cowan and Marc Hanson (18 March, page 54), is for the consultant to be regarded as always performing services for the benefit of the contractor.
The objection to this is that it would involve a retrospective variation in the scope of the consultant’s duty. That is obviously unfair to the consultant, as it would be to any professional person. A professional is generally liable for the kind of loss that was within the scope of their duty at the time. Prior to novation, that duty is owed to the employer. Whether the CLLS agreement makes the consultant liable for a wider range of loss than this is questionable, but consultants should not take the risk.
These points are developed further in a talk on novation recently given to the Society for Construction Law, now published on its website.
Rachel Barnes, Beale & Company Solicitors
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