In a decision which will be of interest to construction professionals and their insurers, the Court of Appeal has considered questions about the scope of a professional’s duty of care and assessment of damages in the context of a professional negligence claim against a project monitor.
Whilst McBains, the project monitor, was found to have been negligent for failing to draw the lending bank’s attention to the fact that it was being asked to pay for certain work (to a third floor) which fell outside the facility, the real cause of the bank's losses was its funding of a project which it knew, from the outset, would have a shortfall.
In particular, the Court of Appeal found that distinguishing between advice and information (as set out in the well-established SAAMCo decision) did not assist. In SAAMCo, it was held that a professional giving information only (not advice) will only be responsible for the consequences of that information being wrong, and not for any losses which would have occurred even if the information had been correct. In McBains, the Court of Appeal held that the guiding principle in SAAMCo was all that was necessary and that the labels of information and advice are “neither distinct nor mutually exclusive categories”.
On contributory negligence, the bank was held to be two thirds responsible for its own loss, as it had been funding a project “which was never financially viable”.
Our article looking at these points in more detail can be found here.
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