Plymouth & South West Co-Operative Society Ltd v Architecture, Structure & Management Ltd

An architect advising on a complex construction project must give clear, timely and sufficiently detailed advice about design decisions, procurement, programming, cost risk and cost-control measures. Previous dealings with the client, or the client’s general experience, do not justify reducing that advice unless the client gives informed instructions to receive a limited service.

Where a two-stage tender has produced a contract that remains substantially provisional and cannot provide reliable cost control, the architect must consider and advise on an alternative procurement strategy. In this case, the appropriate advice was to proceed first with the sufficiently designed Argos works and defer the remaining works until they could be designed, priced and tendered with reasonable cost certainty.

Plymouth & South West Co-Operative Society Ltd claimed damages from its architect, Architecture, Structure & Management Ltd, for negligent performance of professional services during the redevelopment of Co-operative House in Plymouth.

The project was undertaken using a two-stage tendering process. In practice, the second stage was substantially truncated. When the building contract was entered into, approximately 87 per cent of the contract sum remained provisional, while the design and phasing arrangements were incomplete. The project was subsequently carried out with extensive piecemeal instructions, disruption and substantial cost escalation.

The principal issues were whether ASM had breached its professional duty by failing to advise on the cost risks and the alternative “Argos first” strategy, whether that breach caused the additional costs, and the proper assessment of damages and recoverable cost savings.

1. Breach of duty. ASM owed a duty to use reasonable skill and care in providing architectural, structural engineering and quantity surveying services. That duty included giving clear and continuously updated advice on the decisions required from Plymco, the dates for those decisions, the reliability of budget and provisional sums, the implications of the procurement method, and the measures needed to control costs.
2. The parties’ previous working relationship and Plymco’s limited experience of simpler refurbishment projects did not alter or reduce ASM’s ordinary professional duty. A reduced service could only be provided following an express and informed instruction from the client.
3. The purpose of two-stage tendering was to permit early contractor involvement while the design was incomplete, but to produce a sufficiently detailed and priced contract at the second stage. The process adopted here did not achieve that purpose. The contract remained almost entirely provisional, and there was no reliable mechanism for controlling the final cost.
4. ASM should have advised in late October or early November 1996 that the proposed contract could not provide a predictable cost outcome. It should have advised Plymco to proceed immediately with the sufficiently designed Argos works and defer the balance until the design, phasing and pricing had been completed. That strategy was commercially and technically feasible, and Plymco would have adopted it.
5. The failure to give that advice caused the cost overrun. The court assessed the loss by comparing the actual cost with the reasonable hypothetical cost of works carried out under an Argos-first arrangement. The absence of documents caused by ASM’s failures did not prevent a reasonable assessment of loss.
6. ASM also breached its obligation to advise on reasonable cost savings. Plymco recovered £173,290 for savings which would have been adopted had clear advice been given.

Judgment was entered for Plymco in the total sum of £1,392,088.