Keeping to the brief: architects’ negligence

Architecture. Whilst a laudable profession, is not one in which mistakes never happen. However, what are the extent of those mistakes? Well, that depends upon the particular circumstances. However, recently, the High Court (Martin Bowdery QC ((the Judge)) to be precise) delved into such matters in the case of Freeborn and Another v Marcal [2019]We look at architects’ negligence and how the court will assess liability.

Background to the case

A couple instructed an architect to design a cinema room for their home. However, the architect then went on, without informing his clients, to transform the scope of his instruction from ‘sleek modern’ to ‘wonky industrial’. Unfortunately, for the architect, this was not an episode of ‘Changing Rooms’ where he had an unlimited brief. No; the brief was limited, and it was limited to ‘sleek modern’. Wonky industrial was, definitively, out-of-bounds. The clients’ cinema room would not meet their initial vision/expectations. Aesthetically, or otherwise.

The clients made a professional negligence claim against the architect.

Seven principles

In order to arrive at his decision, the Judge set out seven principles for assessing an architect’s liability. Those seven principles were as follows:

  1. The contract between the parties is the starting point for an architect’s duties.
  2. The architect owed the clients a duty to provide the services with reasonable care and skill.
  3. The architect is not expected to reach a standard of perfection. The standard is of reasonable care and skill. However, it is not enough for a claimant to prove that the architect made a mistake to evidence that there has been a failure to exercise reasonable skill and care. A claimant must prove actual negligence.
  4. Where the project requires specialist knowledge, an architect may recommend that the client appoints a third party with such specialist knowledge. Usually the architect will not be responsible for any work carried out by the specialist which is beyond the expertise of an architect of ordinary competence.
  5. An architect’s duty to supervise or inspect works will depend on a number of things. These will include the type of works, the terms of the contract and the parties’ confidence in the contractor.
  6. A client may only recover that loss and damage caused by the architect’s negligence (causation); and which the client has sought to mitigate.
  7. Finally, the usual damages awarded where an architect’s negligence causes defects in a building is the cost of rectification.

The Judge’s decision

The Judge concluded that an architect should produce a written brief and share this with the client. The architect should then include any changes to the design within that brief for consultation with the client. This requirement could only be departed from in exceptional circumstances with the client’s agreement. In this case, the architect had not done so.

The Judge found that the architect had indeed acted negligently and had caused loss to the claimants. He awarded damages in relation to the cinema room as follows:

  • Just over £430,000 in money spent on designing and building a cinema room that did not comply with the clients’ instructions and would be demolished;
  • £26,000 for actually demolishing the cinema room
  • Plus a further £5000 for distress and inconvenience.

The Judge varied from the usual order that the damages would be the costs of rectification. This was because the end result was “so different… from what the Claimants reasonably expected” that demolition (rather than rectification) was reasonable.

While this case hinges on what the claimants found to be ugly design, it is not the design itself that led the court to find the architect negligent, but the way that the architect went about it. Not least that the architect substantially changed the design without discussing with the claimants.

If you are concerned that your architect has not kept to his brief, or is otherwise negligent, our professional negligence team can assist. Call us today on 0800 988 7756 for a free initial chat.

Money talks: Considerations before issuing a debt claim

It can be extremely frustrating when someone owes you money. However, many people are quick to throw themselves into the idea of suing someone for the money that is owed to them. It is worth considering the following before taking legal action and issuing a debt claim.

Can you settle the dispute between yourselves?

In the first instance, it is always worth having a chat with the debtor. If you give the debtor a chance to explain his situation, you may be able to resolve the matter amicably. For example, if he is coming in to money the following week, you could agree to wait until then. Or perhaps you might agree an instalment plan.
Discussing matters up front can help preserve relations between parties, as well as potentially helping you achieve an early resolution.
An alternative that can be used before or after you have issued court proceedings is to attempt Alternative Dispute Resolution (ADR).  ADR includes negotiation, mediation and other methods of resolving disputes without the need for court proceedings.

How much is my claim for, realistically?

This may seem obvious, but you need to have a real cause of action in order to bring a claim. If your claim gets to court the judge will look at the accuracy of your claim, including whether you are indeed owed the whole amount.
You will need to prove your claim to the judge. Do you have evidence to show that the full sum is owing?

What can the debtor afford?

Unfortunately even if you obtain a judgment, this does not mean you are guaranteed to recover the money. It will be extremely difficult to recover anything from your debtor unless he has a job, money in the bank, or real estate for example.
Be realistic about what your debtor will be able to afford. If he has no assets, you may need to reconsider issuing a money claim. That being said, there are a number of enforcement options available depending on the debtor's circumstances.

How much does it cost to run a debt claim?

Litigation (court proceedings) should be used as a last resort, not least because there are costs involved.

Court fee

There will be a court fee for issuing proceedings. The level of the fee depends on the amount of debt that you are claiming. It can range from £25 to £10,000 for debts of £200,000 and over. You may be exempt from paying fees, depending on your level of income.

Recovery of legal costs

If you are successful, the Court is likely to order that the debtor pays your legal costs. This will include the Court fee and potentially other costs such as expert’s fees.
In claims under £10,000, the Court will usually order that the debtor pays you fixed costs. This is an amount set by the Court, dependant on the value of your claim. Fixed costs may not cover all of your legal costs, so it is important to bear this in mind before you issue.
For claims over £10,000, the Court will take a look at your legal fees and make a decision about how much you should recover. As a general rule, the Court will usually order that the debtor pays around 70% to 75% of your costs.
As with the main debt, having a costs order against the debtor is great, but not worth anything if the debtor has no money to pay it.
Our specialist debt recovery team can help you with your debt claim, whatever the size. Contact us today for a FREE initial consultation on 0800 9887756.

Professional negligence: claim against a barrister

Among professionals, barristers are some of the most highly trained, and their knowledge of the law is extensive. You should expect their expert skills, representation and knowledge to be used in your case, whether you have instructed them under the direct access scheme, or through your solicitor.

As with all professionals, unfortunately, sometimes mistakes happen. In fact, recent reports suggest that complaints about misconduct by barristers are on the rise. In some cases, you may have a professional negligence claim against a barrister.

What is professional negligence?

In some cases, a barrister may have provided poor service, but may not be negligent. In those cases, you may be able to report the barrister to his chambers, the Bar Standards Board and/or the Legal Ombudsman.

Professional negligence occurs where a professional fails to perform their responsibilities to the required expectations.  It is careless conduct, and a failure to reach these expectations, which ultimately results in a loss caused by this negligence.

We look in more detail at what professional negligence is here.

Duty of care

Professionals owe their clients a duty of care. This means that they are to perform their duties to the reasonable standard expected, and treat their clients with due care and attention.

If a barrister acts negligently and has, for example, given you poor advice on a point of law; incorrectly drafted court documents; or failed to provide the expected standard of representation in court in your case, the outcome can be shattering with lasting effects and financial loss.

Are barristers immune from legal action?

Certainly not. Historically, barristers were immune from being sued in order to protect their reputation. However, the law changed in 2000. This means that people can now bring professional negligence claims against barristers.

How long do I have to make a claim?

The limitation period in most professional negligence cases is six years which starts from the date of the negligence. This can however be extended in certain cases when the negligence only becomes apparent at a later stage.

Making a claim against a barrister

If you have suffered a financial loss because of the negligent actions of your barrister, you may be able to make a claim for compensation. If your solicitor instructed the barrister, there is a possibility that you may also have a professional negligence claim against your solicitor.

Our expert professional negligence solicitors will be able to determine if your barrister has help you find the best remedy to recover the compensation you deserve. Call us today for a FREE initial consultation on 0800 9887756.
claim against a barrister

Where’s my money? Recovering unpaid debt

Are you owed a significant amount of money? Reports show that 9 million people in the UK are in serious debt and the average UK household debt is now at a record of £13,000! So with this increase, how do you recover what is owed to you? We look at the steps you need to take to sue for an unpaid debt.

What will happen?

The court encourages parties to attempt to negotiate and resolve the matter without the need to start court proceedings. This can save debtors and creditors both money and time.

In October 2017, the Ministry of Justice will be introducing a specific procedure for unpaid debt matters. The Pre-Action Protocol for Debt Claims will encourage the parties to agree a reasonable repayment plan. If you cannot agree a payment plan with your debtor, the parties will be encouraged to consider using an Alternative Dispute Resolution (ADR) procedure.
On average over 3,000 consumer County Court Judgments (CCJs) are issued each day. From October, therefore, the court will expect the parties to have complied with the Protocol. The court will take into account non-compliance and may order sanctions on that party. This could include paying the other party’s costs.

What if I cannot settle my debt claim?

We often find that debtors would rather try to settle the debt without you having to issue court proceedings. However, in some cases this is just not possible. At this stage, you may wish to issue the proceedings to sue your debtor.
If the debtor does not defend the claim or pay the debt within the given period of time, you may be able to ask the Court to order a default judgment. Default judgment is a binding judgment in one party’s favour, as a result of the other party’s failure to take a specific action. In this case, it is the Court ordering that the debtor pays you the money as he has failed to defend the claim in time.
On the other hand, if the debtor does defend the claim, the claim will go to a hearing at court.
There is nothing to stop the parties continuing to negotiate a settlement in the meantime.

What should I do?

  • Speak to a solicitor, and make sure the unpaid debt claim is worth pursuing.
  • Collect evidence to show that you are owed money by the debtor.
  • Seek as much information about the debtor as you can in terms of whether they can’t or won’t pay.
  • Are you within the 6-year time limit from the date the debt became due to take action?

If you would like advice on how to recover your money, our specialist debt recovery team can help.  Call us today on 0800 988 7756.
unpaid debt

First things first: The letter of claim

If a professional you have instructed has been negligent, you can sue them in order to recover any losses which their negligence has caused you to suffer. However, it is not always necessary to issue court proceedings in order to recover your losses. It is often possible to reach a settlement through alternative dispute resolution (ADR) prior to court proceedings being issued. In many cases, the professional’s insurer may wish to avoid incurring unnecessary legal costs in fighting a hopeless case and will prefer to simply reach an early settlement.

Before you issue proceedings, parties should follow the Professional Negligence Pre-action Protocol process. This is a specific procedure that the courts encourage parties to follow before issuing proceedings. The idea is so that both parties know exactly where the other stands before the expense of Court. Following the pre-action protocol can assist in early settlement of professional negligence claims.

The first step in the process is writing a letter of claim. This is the Claimant’s first opportunity to set out their case to the defendant; e.g. the client’s letter to the negligent solicitor. The pre-action protocol sets out a number of criteria which the claimant must include within the initial letter of claim. We shall look at what is required within this article, using the example of a claim against a solicitor.

Details of the parties

First of all, the claimant must include in his letter of claim the obvious details such as the names and addresses of the parties involved – i.e. the client and solicitor practice along with the requisite names and addresses. Thereafter, the letter should set out details of any associated parties. These could include other parties involved in the matter or perhaps an expert who was instructed in the initial case.


Within the body of the letter of claim the client should set out the background of the case. The background does not have to give every detail of the case from beginning to end. However, a clear background is required; one which would allow an objective person to understand the nature of the instruction and conduct of the professional.


Following this, the letter should set out the allegations of negligence. It should be clear from reading the letter as to what the solicitor has done incorrectly/negligently. You should also set out what the solicitor’s correct course of action should have been.


The letter should then link the allegations of negligence to loss which the claimant has suffered. The losses should be detailed and exact figures provided. It is this loss which the client is requesting to be remedied.

ADR and time limits

The conclusion of the letter of claim should set out that the claimant is willing to engage in ADR and the dates by which the letter of claim should be acknowledged and responded to. The defendant is required to acknowledge the letter of claim within 21 days and to provide a response within 3 months of the date of the acknowledgment.

The importance of the letter of claim should not be underestimated. It is the opportunity for the client to fully set out its case and its strengths. A strong letter of claim can lead to the insurers of the solicitor deciding that it will have to reach a settlement and remedy the loss which has been suffered by the claimant.

Our professional negligence team can help you through your claim; from the letter of claim, to trial (if required).  Call us today on 0800 9887756 for a FREE no obligation chat about your claim.
letter of claim

Case update: What is accidental damage?

Most buildings insurance policies will insure the owner against ‘accidental’ damage to the property. The Technology and Construction Court (TCC) has recently had to consider what amounts to accidental damage. The case, which concerned a property in Leeds, was Leeds Beckett University v Travelers Insurance Company Ltd [2017] EWHC 558 (TCC).


In the 1990s, the claimant carried out development works on the site of the old Kirkstall Brewery, turning some of the old buildings into new accommodation blocks. The largest building (“the Building”) was along the bank of the Leeds-Liverpool canal. The claimant found the site difficult to develop, not least because it was wet and there were disused mine shafts on the site.
In December 2011, large cracks appeared in some of the walls and ceilings of the Building on the side next to the canal. The cracking was to such an extent that the Building had to be evacuated. Investigations were carried out, and found that an area of concrete foundations had “turned to mush”. As a result, the concrete blocks had no structural strength at all.
The defendant insured the Building, and the claimant made a claim under the insurance. The policy covered property that had been damaged, and defined “damage or damaged” as “accidental loss or destruction or damage”. There were a number of exclusions to the type of damage covered, which included (among other things) damage by gradual deterioration, defective design or materials, latent defect or wear and tear.
The defendant declined to cover the claim. In 2012, the claimant demolished the entire Building and later issued proceedings in the TCC.


The TCC had to consider whether the defendant should cover the insurance claim.
The TCC first considered whether the damage was “accidental damage” in relation to this type of insurance policy. It decided that “accidental” would not cover inevitable events. Looking at the facts of this case, the TCC held that the way that the Building was constructed meant that it was inevitable that the supporting concrete would fail. This meant, therefore that the damage could not be “accidental”.
It went further to say that even if it was wrong, and the damage was “accidental”, the damage was excluded for gradual deterioration and defective design. Unfortunately for the University, the TCC decided therefore that the insurer was correct to avoid the policy.
While the definition of a term in an insurance contract will depend on the wording in each contract, this case gives insurers and insureds some useful guidance on what the court might construe to be accidental damage.
If you have an property or insurance dispute, our specialist dispute resolution solicitors can help. Call today on 0800 988 7756 for a free consultation.
accidental damage

With friends like these… Professional negligence and free advice

The Court of Appeal’s recent judgment in Lejonvarn v Burgess and Another [2017] EWCA Civ 254 decided that the Technology and Construction Court (TCC) had correctly found that a professional consultant owed a duty of care in tort for services that she performed (without charge) for her friends.


Mrs Lejonvarn and Mr and Mrs Burgess had been friends for around 10 years. Over the years, the friends did various favours for each other.
In 2012, the Burgesses started obtaining quotations for landscaping works to their garden. The proposed scheme was looking to cost them over £200,000. Mrs Lejonvarn (who described herself as an architect) told her friends that they could do the works within a smaller budget. She started to provide design and project management services for the project, but the parties neverdiscussed a formal contract. Further, Mrs Lejonvarn did not ask for any payment. This was on the basis that if detailed design work were required later down the line, she would require payment.
Unfortunately, the friendship broke down over costs issues before this point and the Burgesses engaged an alternative designer to complete the works. The Burgesses sued Mrs Lejonvarn, alleging that the work carried out under her supervision was defective. They claimed for the increased cost of completing the project, including remedial works. The claim was valued at up to £265,000.

The Technology and Construction Court’s (TCC) decision

A trial of preliminary issues was held at the TCC. The judge decided that there was no contract between the parties. However, he held Mrs Lejonvarn owed the Burgesses a duty of care in tort and this duty gave rise to liability for pure economic loss.

What is pure economic loss?

By way of example, say an electrical contractor negligently cuts through cables in a factory, leaving the factory unusable. A claim for pure economic loss here would be for the potential earnings the company could have gained if the cable were not damaged, and the factory was usable.
There is a general rule that a negligent defendant will not be liable for pure economic loss suffered by a claimant. This is to prevent entirely disproportionate claims being brought. In the above example, the factory’s potential loss of earnings could be colossal, compared with the damage that was actually caused.
In cases where there is a special relationship between the parties, there will be liability for pure economic loss. A special relationship arises if there is an assumption of responsibility by a defendant (if he knows that the claimant is relying on his special skill); and the claimant reasonably relies upon the defendant’s skill.
In Lejonvarn v Burgess, the TCC found that Mrs Lejonvarn had assumed responsibility and she therefore owed a duty of care that gave rise to a liability for pure economic loss. Mrs Lejonvarn appealed.

The Court of Appeal’s decision

The Court of Appeal unanimously agreed with the TCC judge. It found that Mrs Lejonvarn did owe duties of care to the Burgesses to prevent pure economic loss. The Court of Appeal, in considering Mrs Lejonvarn's points, clarified the law on a duty of care and liability for pure economic loss. The key points to be taken from the Appeal judges’ decision are set out below.

In the absence of a contract, there can still be a duty of care

The TCC had concluded that there was no contract, but that the parties’ relationship was “akin to a contractual one”. Mrs Lejonvarn had assumed responsibility to the Burgesses and therefore owed them a duty of care in tort.
The Court of Appeal agreed and found that even if there was no contract, a duty of care could still arise in tort.

The correct test on pure economic loss

The TCC decided that Mrs Lejonvarn was liable for pure economic loss in tort as the “assumption of responsibility” test had been satisfied.
In her appeal, Mrs Lejonvarn said this was the wrong test to apply. The Court of Appeal disagreed with Mrs Lejonvarn and held that the assumption of responsibility test was appropriate in two main areas:

  1. Where there was a fiduciary relationship, and
  2. Where someone voluntarily provided services in circumstances where he knew or ought to have known that an identified person would rely on his advice.

This claim clearly fell into the second of these two cases, and therefore the assumption of responsibility test was correctly applied.

Distinction between contract and tort

A basic distinction between contract and tort is that a contract can impose positive obligations on a party (e.g. to carry out a specific job). Contrastingly, tort can only impose a negative obligation – e.g. a duty to act with reasonable skill and care.
Mrs Lejonvarn appealed the TCC’s decision on the basis that it had decided that she owed positive duties, that was only possible if there had been a contract (which the TCC had said there was not).
The Court of Appeal recognised the importance of this principle and emphasised that it did not find that Mrs Lejonvarn had a duty to carry out the services. It found that if she chose to perform the services, then she must act with reasonable skill and care.


The TCC described its own decision as a “cautionary tale” to those giving free advice to friends and family. However, it did note that this was more than a “piece of brief ad hoc advice”. The Court of Appeal’s decision reaffirms this, and helps clarify how to test whether it is reasonable to impose a duty of care.
If you have received advice or services from a professional (whether formally or not) and are concerned that they have caused you a loss, our professional negligence team can help. Call today on 0800 988 7756 for a FREE consultation.
Royal courts of justice

Misuse of a Deceased's Money

Unfortunately, probate disputes are becoming increasingly common. Particularly claims which arise from the misuse of a deceased’s money prior to their death. Such claims generally relate to an elderly individual (perhaps with a degenerative condition) who relied upon someone for their care.

Who can bring a claim?

If the Personal Representatives (PRs) of the estate believe that someone has taken money from the deceased, either before or after death, they may bring a claim against that person on behalf of the estate. Alternatively, a beneficiary of an estate who believes that there is money missing from the estate can raise this issue to the PRs so that they can resolve it.

What do I need to be able to show?

Unfortunately, by their very nature, such claims can be difficult to pursue. This is simply because the best evidence of the suspected wrongdoing would have come from the deceased themselves.

A beneficiary to a deceased’s estate will very rarely have access to the deceased’s bank accounts. It will therefore be difficult to know what was spent from the deceased’s accounts prior to their death. However, PRs have a duty to keep accounts for the estate. These will show the funds available within the estate and record the use of funds from the estate (namely, the deceased’s bank accounts).

In order to pursue a claim, you would need to show that the deceased’s funds, were used on other purposes than for the deceased. In order to be able to do this, a forensic analysis of the deceased’s accounts will be required, along with corroborative evidence. For example, it may be possible to obtain receipts/invoices from companies/individuals identified within the bank accounts – such as companies who provide respite care or assisted living services.

To be successful in a claim, it is not simply enough to establish that funds have been used without the deceased's authority. It has to be shown on the balance of probabilities (i.e. it is more likely than not) that those funds have been used for other purposes other than for the benefit of the deceased. To this end, the following may be tell-tale signs that funds have been misused:

1. Unusual items you would not have expected the deceased to have purchased;
2. A proliferation of cash withdrawals;
3. Large, unexplained transfers; or
4. Transfer of sums to the individual you expect to have misused sums.

How can I get this information?

A beneficiary can request that the PRs provide an account. An account means an explanation/details as to the use of the deceased’s estate/funds. If they do not, you can make and application to the Court, who may compel the PRs to do so. The account should then provide the evidence (if there is such evidence) that funds have been misused. The court can order that funds be repaid to the estate if the court deems it appropriate to do so.

Finally, if you believe that someone has improperly taken money from a deceased, this may be a criminal offence. It is worth considering reporting matters to the police, who can also investigate.

If you are dealing with the administration of an estate, and believe that someone has misused the deceased’s money, contact our specialist solicitors on 0113 244 9931.


Money | Compensation Claim

Boundaries - Your Questions Answered

I heard that every house owns the fence on its left side. Is this correct?

This is not correct. Unfortunately there is no hard and fast rule as to who owns which boundary.

How do I find out who is responsible for the boundary fences?

The first step would be to look at the property title deeds. Within the historic documents, there may be information on who is responsible for which boundary structure (i.e. the fence or hedge separating the two properties).

In some documents, the responsibility for the boundaries is shown by “T” marks. The plan below shows that Number 10 is responsible for the front boundary, as it is marked with a “T” facing in to the property. The boundaries with 9 and 11 are marked with a “T” on each side of the boundary, forming an “H”. This means that the neighbours are jointly responsible for the boundary.

T Marks

My neighbour is responsible for the boundary. Can I make him repair the fence?

In short, no, unless there is something in his deeds which means that he must keep his fence in good repair. However, there is nothing to stop you, for example, leaving the old fence where it is, and erecting a new fence on your side of the boundary.

Do the Land Registry plans show where my boundary line lies?

In most cases, the Land Registry title plan will not show you exactly where the boundary lies, but will just give you an indication as to where it is.

Where the two neighbours have agreed where the boundary lies, this agreement can be lodged at the Land Registry and will be recorded on the title to both properties.

The Land Registry can ‘determine’ a boundary. It will not get involved in a dispute, but if it is satisfied by the evidence given by the property owners, it will confirm the correct location of the boundary. If this has happened, a determined boundary plan will be filed at the Land Registry, showing the exact location of the boundary.

How do I find out where the boundary line lies?

If it is not clear, it is usually advisable to instruct a specialist surveyor and/or solicitor who will investigate. They will usually consider all of the historic documents, look at what is on the ground, and potentially look at what has historically been on the ground (where it is thought that someone has moved the boundary fence for example).

Is there a maximum height for a boundary fence?

Sometimes there will be a clause in your deeds which sets out the type and height of fence, which you should adhere to. If there is not, then there is no height limit, although you will need to obtain planning permission to erect a boundary fence over 2 metres high, as well as in other circumstances, for example where your property (or your neighbour’s) is listed.

Can I take the boundary fence down?

If the fence is your responsibility, then, in theory, yes you can take the fence down. Unless there is something in the deeds to your property, there is no obligation for a boundary to be marked by a fence or hedge.

If the fence belongs to your neighbour, we would not normally advise you to remove the fence as doing so could be construed as an act of trespass. Further, if you damaged the fence, this could potentially be a criminal offence.

It is advisable to speak to your neighbour before taking any action in order to avoid disputes down the line, and if in doubt, seek legal advice.

I have a dispute with my neighbour about the boundary. How can I resolve it?

The first step would be to discuss the matter with your neighbour. It may be that there has been a simple misunderstanding.

If relations are good between neighbours, but the matter cannot be resolved, the parties could jointly instruct a surveyor to advise where the boundary lies, and enter into a boundary agreement, which can be sent to the Land Registry.

If matters cannot be resolved and are causing you difficulties, we would advise you to seek legal advice. There may be various options available, including seeking further expert opinion, proceedings in a tribunal or a court for a determination of the correct location of the boundary, proceedings for an injunction to stop your neighbour encroaching over your boundary, or mediation.

I am selling my property and have had a dispute with my neighbour. Do I need to tell my buyer?

When you sell your house, you will need to complete the Seller’s Property Information Form ('SPIF'). Within this, you should set out any disputes you have had with your neighbour, including boundary disputes. If the dispute has been resolved, then you should mention this. If you do not disclose a dispute, your buyer could potentially bring a claim against you in the future. Your conveyancing solicitor will be able to advise you on this further.

If you would like some advice regarding your property boundaries, please contact our property disputes team on 0113 244 9931 to arrange a free consultation. Boundary fence


Yesterday the Court of Appeal heard the case of Balfour Beatty Regional Construction Limited (“BB”) v Grove Developments Limited (“Grove”).

Grove was a property developer who had engaged BB as a contractor to design and build a hotel and apartments. The dispute concerned whether BB had a contractual right to submit further interim applications for payment following the expiry of dates for doing so within an interim payment schedule (the “Schedule”) appended to the contract. The contract works had become delayed and the Schedule had not made provision for delay. The difficulty for BB was that it faced the proposition of completing the works without receiving further payment until the final payment mechanism under the contract was triggered – potentially a number of months down the line and after significant costs had been expended.

What did the Technology and Construction Court say?

Earlier this year, the Technology and Construction Court (the “TCC”) held that BB had no contractual right to submit further interim applications for payment in the absence of defined dates for doing so within the Schedule. The TCC held that BB should have negotiated with Grove to extend the Schedule and dismissed BB’s argument that the provisions within the Scheme for Construction Contracts 1998 (the “Scheme”) should apply in the absence of further interim payment dates within the Schedule. BB appealed against this decision.

The Court of Appeal's decision

The Court of Appeal dismissed BB’s appeal. The Court of Appeal held that the parties had no agreement as to how interim payment applications would be dealt with following the expiry of the Schedule and that the parties needed to know the dates with certainty. The Court of Appeal also held that the Schedule had provided an adequate mechanism for defining payment dates and therefore the Scheme did not apply and it was impossible to ascertain any new agreement from the parties' conduct following expiry of the Schedule.

The lesson to be learned from the case is that when contracts are drafted it is imperative to provide provision for delay when agreeing to a schedule for interim payment application dates.

If you have a contractual or construction dispute, contact our experienced Dispute Resolution team on 0113 2449931 to set up a free initial consultation.