Damages of £3.6m awarded against ‘negligent’ architects

Published: 15 November 2017

Category: News

A developer has been awarded £3.6m damages from a firm of architects in a professional negligence case.

The developer had engaged the architects on a major hotel project. No budget was specified in the contract, but the developer claimed to have told the firm that it was £70m.

However, the architects produced a scheme costed at £195m. The developer said he then increased the budget to £100m after the architects assured him that the scheme could be "value engineered" down to that figure.

That proved to be impossible and the developer was unable to obtain funding for the scheme. He sought repayment of £4m expended in professional fees.

The High Court found in his favour. It said the architects had embarked upon the design project with no consideration for the budget and had therefore failed to perform the contract, which amounted to a breach of duty.

They had then advised that value engineering could reduce the cost of the scheme to £100m. On the expert evidence, that advice was negligent. As they had specifically advised the developer that value engineering would result in a reduction in the cost of the scheme, it was entirely reasonable for him to have continued to incur professional fees in reliance on that advice.

Those fees of £3,604,694 were therefore recoverable as damages for breach of contract.

Please contact Matthew Sigsworth in our Dispute Resolution Team if you would like more advice about the issues raised in this article or any aspect of professional negligence claims.