Case Law Update Construction And Property 2012

2012 saw a number of important decisions made in the Courts which may affect those involved in the construction and property sectors. This article sets out a brief summary of some of those cases.

Claims consultants and legal professional privilege

Walter Lilly & Company Ltd v Mackay & Anor [2012] EWHC 649

This case is a reminder of the scope of legal professional privilege. The claimant in this case was a building contractor who had been engaged to construct a house for one of the defendants. The defendant had engaged a claims consultant (Knowles) for "contractual and adjudication advice". The defendant claimed that the majority of the Knowles documentation was privileged and did not disclose it. The contractor applied for an order requiring disclosure of these documents and the Court agreed, holding that legal professional privilege did not apply. The Judge gave weight to the fact that Knowles was not retained to provide legal advice and had not held itself out as a firm of solicitors or barristers. It was immaterial that the people providing the advice had trained at the Bar and that the defendant honestly believed that it was engaging Knowles to provide legal advice. It is therefore very important that all parties are clear as to the services they to be provided to avoid any surprises as to what documentation could subsequently be subject to disclosure.

Quantity surveyor's duty to obtain a bond

Sweett (UK) Ltd v Michael Wight Homes Ltd [2012] EW Misc 3 (CC)

The quantity surveyor (QS) was obliged by its appointment to "prepare contract documentation and arrange for such documents to be executed by the parties thereto". The contractor became insolvent before providing the performance bond in favour of the employer. The court rejected the employer's argument that the QS was under an absolute obligation to procure the bond from the contractor. The QS was subject to the implied test of reasonable skill and care and had satisfied its duty in these circumstances (as he had chased the contractor for this and advised the employer of the importance of the bond). If you wish to imply an absolute obligation on another party to procure something, very clear wording should be used.

Professionals' duty to review previous work

Shepherd Construction Ltd v Pinsent Masons LLP [2012] EWHC 43

Shepherd argued in this case that their solicitors were under an ongoing duty to review the suitability of clauses in standard sub-contracts that had been drafted by the solicitors some time ago, but which were now ineffective due to a change in the law and left Shepherd facing claims from third parties. The Court did not agree, finding that on the facts there was no general retainer to review and revise previous work stating "there is something...