Galliford Try Infrastructure Ltd & Anor v Mott MacDonald Ltd

A consultant does not ordinarily owe a tortious duty to a contractor for economic loss merely because the contractor receives and may use tender drawings, specifications or informal advice. The court must examine the commercial, factual and contractual context, including the contractual structure, the purpose for which information was supplied, reliance, the scope of any assumed responsibility and any disclaimer. Foreseeability alone is insufficient. A duty may arise from an objectively established assumption of responsibility or a relationship akin to contract, but the duty must correspond to the kind of loss claimed. Disclaimers are relevant evidence when deciding whether responsibility was assumed; they are not necessarily exclusion clauses. On the facts, no duty or actionable reliance arose between the consulting engineer and the design-and-build contractor.

The claimant, formerly Morrison Construction Ltd, was the design-and-build contractor for the redevelopment of the former Birmingham Children’s Hospital. The defendant, Mott MacDonald Ltd, had been retained by a developer-related company as consulting structural and building-services engineer. No novation of Mott MacDonald’s appointment to the claimant was completed.

The claimant sought damages in tort for economic loss allegedly caused by deficiencies in advice and design information concerning the permanent support of piled retaining walls and the retention of the hospital façade. It also alleged reliance on representations made during the tender and pre-contract period. The court also considered the claimant’s liability for liquidated damages and the defendant’s contribution claim against the steelwork subcontractor, Rowen Structures Ltd.

1. Claim dismissed. Judgment was entered for Mott MacDonald against the claimant. Mott MacDonald’s Part 20 claim against Rowen was also dismissed.
2. In an economic-loss claim based on negligent statements or services, foreseeability is insufficient. The court must examine the whole commercial, factual and contractual context, including the contractual nexus, what was said and why, any disclaimer, the purpose for which information was sought, and actual reliance. The scope of any duty must correspond to the kind of loss claimed (paras [190]-[191]).
3. An objectively assessed assumption of responsibility, or a relationship akin to contract, may establish a duty independently of a contract. Reliance remains important, particularly where the claim concerns information or advice. A proposed novation which was never agreed, and negotiations for additional services and fees, pointed against any such relationship (paras [322]-[327]).
4. The drawings and specifications were prepared by Mott MacDonald for its contractual client and contained clear restrictions on use. Those disclaimers were relevant factual pointers against an assumption of responsibility. They were not exclusion clauses to which the reasonableness requirement in Unfair Contract Terms Act 1977 applied, because no duty of care arose in the first place (paras [328]-[333]).
5. The claimant failed to prove negligent advice, material reliance or a duty extending to the pile-bracing losses. The diaphragm concept was not negligent in principle, and the evidence did not establish reliance on the alleged representations. The same failures defeated the façade claim. The claimant knew, or should have known, that the façade and retained structure had not been fully investigated or designed (paras [313]-[338], [380]-[384]).
6. Had liability been established, the claimant’s adoption of the independent bracing solution would have been reasonable because it followed Mott MacDonald’s unequivocal advice as to the appropriate solution. However, the claimed liquidated damages would not have been recoverable: subsequent agreements made payment contingent on a direction by the claimant’s parent, and the claimant had not shown that the loss would probably be incurred (paras [394]-[422]).

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