The industry's black sheep

Rachel Barnes produced the last in a series of three columns about the Blyth & Blyth case, currently under appeal by Carillion (31 August, page 51). Contrary to John Stirling and myself, Rachel argues that the judge was right to relieve the engineer of any liability for the consequences of inaccuracies in its pre-novation design work, even though the contractor picked up substantial additional costs as a result of those inaccuracies.

She argues (rightly) that an engineer cannot be expected to serve two masters. We would all accept that novation under design-and-build contracts cannot create a new set of duties to the contractor.

But she also argues that, even when in breach of its duty of care to the employer, it is still perfectly reasonable for the engineer to get off scot-free on a technicality (this being because the design-and-build contract transferred the risk of inaccuracies to the contractor, the employer no longer had a loss, and so the contractor's claims fall into the proverbial legal black hole). By way of justification, she asserts generally that it is all the employers' fault for using a procurement route that seeks to transfer responsibility for consultants' pre-novation design to the contractor. Contractors should resist or price the risk they are being asked to assume, but they should not pass it on to the consultants.

In other words, the guilty consultant should escape liability and the innocent employer and contractor should be left with the problem. Am I alone in finding this argument unacceptable? All that the employer and contractor are asking is that the consultant assume the responsibility for losses suffered by a contractor which, but for a particular contract structure, would have been suffered by the employer. Of course, if you asked the employer before novation whether it wanted to be able to sue the engineer for negligent errors even though responsibility for a design was being transferred to the contractor, it would have replied "of course".

The engineer knew about the novation in advance. It consented to it. So why should it be unreasonable to expect it to stand up for its mistakes? It seems to me that this sort of argument does the professions no favours. There are employers and contractors who ask consultants to accept unreasonable terms. But if they are not prepared to accept responsibility for losses flowing from negligent design, why should employers and contractors not seek these provisions? If a contractual free-for-all ensues, the professionals are at risk of losing their special professional status.

The guilty consultant escapes and the innocent contractor is left with the problem. Am I alone in finding this unacceptable?

A defensive response to issues of liability appears to be becoming more prevalent among sections of the profession – led by their advisers. The refusal of the professional bodies to accept a standard collateral warranty, acknowledging responsibility – on an optional basis – beyond the cost of repair for losses resulting from their negligence, raises a similar issue. Firms accept this responsibility in most of the collateral warranties in circulation, but professional bodies will not. Due to the structure of property documentation, such losses may disappear into a black hole, leaving the consultant in the clear.

The standard terms of appointment assert that consultants should have no responsibility for any design carried out by subcontractors and suppliers. This is fine if the employer knows which sections of the building are to be designed by the consultant and which by the contracting industry, and can make an appropriate adjustment to the consultant's fee – but is there not some deception in claiming a full fee for the design of the project, subcontracting that design to others, and then disclaiming responsibility for it?

Professionals rightly express fears about the litigation culture spreading from the USA. They quite properly complain about onerous terms, and decisions by the courts that expect infallibility.