A friend in need? A cautionary tale for professionals when giving informal advice to friends

I am sure that employment lawyers are not the only professionals who are regularly asked for advice on the hoof, or receive calls from long lost friends who remember that we might be able to have a chat when employment problems arise. Of course, we all like to assist our friends if we can when they are struggling with legal issues and if we have professional skills that can assist them. However, while not a strict employment law case, this cautionary tale relates to a professional consultant who was held to have owed a duty of care in tort for professional services that she performed for her friends.

In the case of Burgess and another v Lejonvarn [2016] EWHC 40 (TCC), the Technology and Construction Court (TCC) has held that a professional consultant owed a duty of care in tort for professional services that she performed for her friends.

The TCC itself described this case as a "cautionary tale", in which Ms Basia Lejonvarn (a professional consultant) was a Netherlands-registered architect living in London. Ms Lejonvarn had two friends, Mr and Mrs Burgess, and over time the friends did help each other out with various projects. In 2012 Mr and Mrs Burgess obtained a preliminary design and quotation for work on their back garden, for substantial work which was estimated to amount to over £200,000. Ms Lejonvarn was setting up her own business and suggested that the work could be done for less. No contract was entered into and Ms Lejonvarn did not ask for payment, although at the hearing it was suggested that she had planned to charge for detailed designs at a later stage.

Unfortunately, Mr and Mrs Burgess became concerned about the advice being given, the friends' relationship broke down and Mr and Mrs Burgess instructed an alternative landscape designer to complete the project. They then claimed against Ms Lejonvarn for the increased cost for completing the project, including the cost of remedial works – a total claim of £265,000.

The TCC were asked to determine five key preliminary issues:

1. Did the parties agree a contract?

2. If there was a contract, what were the contractual terms?

3. Did the professional consultant, Ms Lejonvarn, owe a duty of care in tort?

4. If so, what was the extent of that duty?

5. Did the parties agree to a project budget of £130,000?

The Court decided that the parties had not agreed to a contract and there was no binding contract as there had not been any offer and acceptance capable of giving rise to a contract and there had not been any consideration. Consequently, there could not be any contractual terms.

However the Court did conclude that the professional consultant did owe a duty of care in tort. The Court confirmed that a professional designer can owe a duty of care in respect of pure economic loss on a construction project. It also held that such liability is not restricted to advice given by the professional consultant, but can also cover other services that it performs. Having established that the duty of care was capable of existing, on these facts the court found that the duty in this case covered design services and project management services such as: selection and procurement of contractors and professionals, attending the site to oversee progress, directing, inspecting and supervising the works, advising the clients in relation to paying contractors and exercising cost control.

Clearly this judgment highlights that there can be a risk for any professional offering informal advice. However, it is also important to note that the Court emphasised that "this was not a piece of brief ad hoc advice of the type occasionally proffered by professional people in a less formal context". Instead, the Court determined that this was a significant project approached in a professional way, with services provided over a relatively long period and involving considerable commitment on both sides. In addition, the professional consultant had hoped to receive payment for services that might be necessary later in the project. Also interesting is the fact that the Court concluded its judgment by stating that it could not think of "a more appropriate case to which mediation is suited".

What can we take from this case? Realistically, an initial informal chat with a friend is unlikely to result in a successful claim for professional negligence. However, if more detailed, formal professional advice is required of whatever kind, it might not be a bad idea to use your professional skills to recommend someone else who can take on the job in a formal capacity rather than take the matter further as a favour...