Friendly assistance v contractual obligation

If you are a member of a profession, you may find that it is difficult to ring-fence your professional activities to work hours. As soon as somebody finds out that you have particular expertise, the inevitable questions begin – prefaced with the magic words “Could you just…”

Whilst many professionals would think nothing of helping out a friend, neighbour or family member with free advice, the question of the implications of such advice is often left unanswered – until it is too late. A recent case, Burgess & Burgess vs Lejonvarn [2016] EWHC 40 (TCC) showed what can happen when free advice ends up costing substantially more than had been intended.

What happened

Mr Burgess and his wife were neighbours of Mrs Lejonvarn, who ran an architectural design business. When the Burgesses decided to landscape their garden, they first obtained a quote from a landscaper but this came in at more than £150,000. Aware of Mrs Lejonvarn’s expertise, they asked her for assistance.

It wasn’t long before Mrs Lejonvarn agreed that she and her workforce would carry out the work at a lower price than had been quoted and for the first part of the project, would not charge for her services in the role of project manager. However, as was later raised in court, she had planned to charge for more detailed design work at a later stage of the project, if it got that far. The Burgesses and Mrs Lejonvarn had not signed a formal agreement concerning the works, nor had they discussed a fee for them.

Unfortunately, things did not go to plan. Mrs Lejonvarn’s expertise was not up to the job of the major landscaping project that was the Burgess garden. The costs associated with the project continued to rise and, faced with the situation, the Burgesses ordered the builders to leave the project. Mrs Lejonvarn was replaced with the landscaper whom the Burgesses had originally contacted.

The eventual price of finishing the project, complete with remedial works to make good what Mrs Levonjarn’s workers had done, came to about £265,000. The Burgesses sued Mrs Lejonvarn for damages to recover their costs, claiming that she was legally responsible for architectural design, procurement, project management and supervision, budgeting and cost control of the works. They sued her both in contract and in tort. Mrs Lejonvarn in turn denied any legal responsibility for the provision of the services named by the Burgesses.

The legal decision

The Technology & Construction Court (TCC) had to decide two main issues:

• Was there a contract between the two parties and if so, what were its terms?

• Was there a duty of care in tort owed by Mrs Lejonvarn in her role as project manager to the Burgesses and what was its content?

The judge examined the history of exchanges between both parties, both personal and by email to decide if they had formed a contract for the provision of landscape services. Using the same information, he had to decide whether Mrs Lejonvarn had assumed responsibility for those services and had therefore taken on a duty of care to the Burgesses to carry them out with reasonable skill and care.

His conclusion was that there was no contract. There was no real consensus about how long the services would last, how they could be terminated or any other clause that a hypothetical reasonable professional person would include if they were drawing up a contract. An important point raised by the judge was that there was no discussion about remuneration.

This meant that the relationship between the Burgesses and Mrs Lejonvarn lacked the essential elements of a legally binding contract – offer and acceptance and consideration.

Regarding the claim in tort, the losses that the Burgesses were claiming were economic and therefore they would have to show firstly that Mrs Lejonvarn had assumed responsibility for the services that she was providing and secondly that they relied on her to carry out those services with ‘reasonable skill and care’.

Mrs Lejonvarn argued that if the terms on which the services would be provided were sufficiently unclear for there to be no contract in existence, they must similarly be unclear about the scope of any duty of care.

However, this argument was rejected by the judge; he noted that previous cases showed that a duty of care can arise when services are performed with no fee and where no contract exists.

An email between the Burgesses and Mrs Lejonvarn set out the scope of her design and project management services and she admitted that she was responsible for working in the Burgesses’ best interests.

Mrs Lejonvarn was carrying out the duties of a project manager, not giving ad-hoc, informal advice to friends in a social context. The project was a significant one and her role was central to it.

She had taken on the responsibility for hiring contractors, supervising site activities, monitoring applications for payment and oversight of the budget for the works, a project to which the Burgesses had committed significant financial resources.

She should have been (if she was not actually) aware that the Burgesses were relying on her to carry out those duties in the manner of a responsible and professional person.

The relationship between them was very similar to a contractual one, even though there was no actual contract in existence.

Accordingly, a duty of care existed between them. The judge’s decision opened the way for the Burgesses to sue Miss Lejonvarn for alleged breaches of her professional duty of care.

Implications

Professional persons who offer advice or services should always be aware of the existence of a duty of care to those who take the advice or use the services.

On the practical side, it would be a very good idea for both parties involved in a project of any size or nature to ensure that a formal contract is drawn up and legal opinion sought. As this case has shown, what begins as an informal discussion on the practicalities of a nascent project can become something much more serious very quickly, even if there was no intention of this happening.

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