Pearson Education Ltd v The Charter Partnership Ltd

A professional designer may owe a duty of care in negligence to later owners, occupiers or users whose property is physically damaged by a latent design defect. The defect remains latent for each claimant until that claimant knew, or ought reasonably to have known, of it. Knowledge acquired by another person does not automatically end the duty or break causation.

Whether an inspection should reasonably have discovered the defect depends on its purpose, context and scope. A designer of a roof drainage system must select capacity by reference to the building’s design, use, location and susceptibility to water ingress. Where the ordinary assumption is inadequate, the relevant design guidance must be applied. A later act or omission in approving or co-ordinating the design may fall within the statutory longstop period.

Pearson Education Ltd occupied a large distribution warehouse and stored books there. The warehouse’s siphonic roof drainage system had been designed with a capacity of 75 mm per hour, although a capacity of 150 mm per hour was required for the building and its use. The gutters overflowed during severe storms in 1994 and 2002, causing substantial damage to the stock.

The defendant architects admitted negligent design but disputed duty of care, causation and limitation. The latent under-capacity had been discovered by a surveyor acting for insurers after the 1994 flood, but the information had not been communicated to the successive lessees. The issues were whether that discovery affected the claimant’s position, whether a survey should have been undertaken during later intra-group transfers, and whether the claim was within the statutory longstop.

1. Judgment for the claimant. The claimant established breach of duty, duty of care, causation and recoverable damage. The agreed damages were £2.1 million, with interest to be assessed.
2. The drainage system was defectively designed because it provided only 75 mm per hour rather than the 150 mm per hour required for a Category 3 building under BS 6367. The Building Regulations 1985 applied to siphonic as well as gravity systems. The 75 mm per hour assumption could not properly be used where the building’s design, use and susceptibility to water ingress made it inadequate.
3. The defect was the concealed under-capacity of the drainage system, not the flooding risk viewed independently. A defect remained latent until it was, or could reasonably have been, discovered by the particular claimant through an appropriate inspection or survey.
4. The discovery of the defect by insurers’ agents after the 1994 flood did not automatically end the duty owed to the claimant or break causation. The position of each potential claimant had to be examined individually. The claimant had neither learned, nor reasonably been expected to learn, of the defect.
5. Whether a survey should have been commissioned depended on the nature and purpose of the transaction and the inspection reasonably expected in that context. No evidence established that surveys capable of revealing the defect should have been undertaken during the relevant intra-group transfers or due diligence exercise. The claimant was not contributorily negligent.
6. The claim was not statute-barred. Although the original design decision occurred before the fifteen-year period, the defendant subsequently omitted to reassess the capacity when the siphonic system was selected, when calculations were submitted for building-regulation approval, and when the specialist subcontractor was nominated. Those later omissions occurred within the applicable longstop period and were attributable to the damage.

First-instance decision. No prior appellate decision is stated in the judgment.