Carillion JM Ltd v Phi Group Ltd

A lead consultant retained responsibility for coordinating and reviewing specialist subcontractor design where its contract covered the whole design and contained no effective exclusion. Reasonable skill and care required the consultant to investigate apparent ground instability, challenge unrealistic design assumptions and respond to site failures.

Causation is an evaluative question concerned with the loss for which the defendant should be held responsible, viewed in light of the scope of the relevant duty. A claimant with overlapping technical expertise is not ordinarily contributorily negligent merely because it failed to detect its consultant’s professional negligence. Damages may include reasonable remedial costs, contingencies and operational disruption. Contribution is apportioned by the parties’ relative blameworthiness and causative potency.

Carillion was the main contractor for a railway maintenance depot at Wembley. Phi designed and installed soil-nailed slope stabilisation works. Robert West Consulting Ltd (“RWC”) was retained as consulting engineer and later lead consultant.

Shallow slope failures occurred during construction in 2005. Later investigations identified an unaddressed deep-seated instability. Carillion settled its direct claim against Phi for £3.8 million and pursued RWC for the remaining loss. Phi and RWC also pursued contribution proceedings against each other.

The issues included RWC’s contractual responsibility for Phi’s specialist design, breach of duty, causation, contributory negligence, the construction of an indemnity clause, the reasonable cost of future remedial works and the proper contribution between Phi and RWC.

1. Liability. RWC’s agreement required it to develop the outline proposals into a fully detailed design and it had become lead consultant. It therefore retained contractual and professional responsibility for the overall design, including vetting and carefully checking Phi’s soil-nailing design. RWC could not contractually wash its hands of that design.
2. RWC breached its duties by failing to advise on further site investigations, failing to recognise evidence of previous instability and counterfort drains, failing to challenge Phi’s inadequate water-pressure assumption and failing to review the design after the January and October 2005 slips. The October failures should have prompted a review capable of identifying the deep-seated instability. Phi was also liable for failing to allow for shallow and deep-seated instability and for using an unjustifiably low ru value.
3. Causation. The court applied a pragmatic and evaluative approach. The question was whether RWC should be held responsible for the need for the remedial works, having regard to the scope of its duties. The fact that Phi, Carillion, CLA or other consultants might also have detected the problem did not break the chain, since none had actually done so and RWC’s own breaches materially caused the loss.
4. Carillion was not contributorily negligent. Its possession of personnel with overlapping engineering expertise did not make it responsible for failing to detect negligence by consultants expressly retained to design, review and check the works.
5. The indemnity in clause 3(5) covered liabilities and claims arising by reason of RWC’s breach. Carillion’s established liability to its employer was within the first limb of the indemnity, but future claims and unincurred losses were not yet actionable under the second limb. It was nevertheless appropriate under the overriding objective to assess the future damages in the present proceedings rather than defer quantification.
6. The reasonable remedial scheme, subject to a credit for the cost that would have been incurred without the breaches, was recoverable. Reasonable programming constraints imposed by the railway operator, contingency, overheads, historic remedial costs and operational disruption were allowed to the extent proved.
7. Judgment was entered for Carillion against RWC for net damages of £3,250,863.93. As between RWC and Phi, the just and equitable contribution was 40% from RWC and 60% from Phi. Phi’s prior payment was credited, leaving a balance of £570,518.36 as between the contributors. Costs and interest were reserved for further hearing.