A builder, as a mere tradesman, is not subject to assumptions of responsibility and owes no tortuous duty of care to its clients
Key points |
? A builder’s duty in tort does not normally cover pure economic loss ? Assumption of responsibility applies to professional advisers, not to contractors |
Section 5 of the Limitation Act 1980 provides that an action for breach of contract will be statute-barred unless it is started within six years of “the date on which the cause of action accrued”. That means six years from the date on which the defendant breached the contract.
Under section 2 of the Act, an action in the tort of negligence must also be started within six years of “the date on which the cause of action accrued”. However, for reasons that are unrelated to limitation periods, that means six years not from when the defendant breached a duty of care but from when that breach caused loss or damage to the claimant. In tort cases involving latent damage, section 14A means that the claimant may have even more time to start proceedings, namely three years from the date on which the damage was discoverable.
The result is that a defendant’s potential liability for breach of contract may have expired when its potential liability in the tort of negligence is still running. This prompts the obvious question: is a negligent breach of contract also a tort and, if so, can the victim opt for the latter and thus obtain the benefit of the longer limitation period?
Breach of contract
To answer the second question first, the House of Lords, in
The first question is more problematic. It would be nice to think that contracting parties will always take all reasonable care to fulfil their contractual obligations, but turning this aspiration into a source of liability in tort is another matter.
For one thing, claims for breach of contract are typically concerned with financial losses, but the tort of negligence does not usually extend to the causing of pure financial loss (that is, loss suffered by someone who has not been physically injured and whose property has not been damaged).
These issues have surfaced most frequently in the context of buildings, mostly because building defects can take a long time to surface. A recent decision of the Court of Appeal settles, for the time being at least, a particular issue that has troubled lawyers for the past 20 years.
Robinson v PE Jones (Contractors) Ltd [2011] EWCA Civ 9; [2011] 04 EG 100 (CS) arose out of a contract made in 1991, whereby the claimant purchased from the defendant builder a house that was under construction. The contract provided that the defendant would efficiently and in a workmanlike manner carry out the work shown on certain itemised drawings and specifications and also made it possible for the claimant to order extra work or variations to the original specification. The contract further provided that the parties would enter into the standard National House-Building Council agreement and that the defendant would not be liable for any defect in the house except as provided for in that agreement.
While the construction work was in progress, the claimant asked the defendant to construct an additional chimney flue to serve a gas fire in a room that had not been intended to have one. This was done and the claimant contracted directly with British Gas to supply and install the extra fire.
The house was completed and transferred to the claimant in April 1992. Whether the gas fire (and another one that had been included in the original specification) functioned satisfactorily is not known. However, in September 2004, the extra fire failed a spillage test, following which both gas fires were disconnected for safety reasons. According to the claimant, further investigations revealed that the problem lay with the flues, whose construction failed to measure up to good building practice or the building regulations that were in force at the time of construction. The cost of remedial works would, it appeared, be substantial, since the only effective remedy lay in the complete reconstruction of the flues.
Having failed to obtain satisfaction from the defendant, the claimant started legal proceedings in December 2006, some 14 years after the house was completed. The defendant raised the defence of limitation, but the claimant argued that his claim was in the tort of negligence and had been commenced within three years of the discovery of the defective flues. The crucial question for the courts was whether the claimant had any claim in tort.
The trial judge held that, in principle, a builder would owe a client a duty of care in tort concurrently with its duty in contract. On the facts of the case, however, he ruled that the contract excluded any such duty. Moreover, since the limitation period for claims in contract had long expired, the claim failed.
Mere tradesmen
The Court of Appeal reviewed case law on concurrent liability in contract and tort and concluded that although this was possible as a matter of principle, a duty of care in tort could arise only where the defendant had assumed responsibility for its services. Further, while such an assumption of responsibility (and reliance on it by the other party) was to be found in the relationship between a client and a professional adviser, the balance of authority denied it in respect of a builder.
All very clear, but one may perhaps be forgiven for asking: Why? Had an architect or specialist engineer designed the offending flues in Robinson, the designer would have assumed responsibility for the design and would thus have owed a duty of care in tort as well as in contract.
However, because exactly the same work was done by a “mere” builder, there was no such assumption of responsibility and no tortious duty of care. Is there really a good reason for this or does the distinction reflect a Victorian view of the difference between “members of learned professions” and “mere tradesmen”?
John Murdoch, professor emeritus, Reading Univeristy
