Michael Phillips Architects Ltd v Riklin & Anor

A professional fee must reflect the value of the services actually provided, including the effect of negligent or incomplete performance. Where a fee is calculated by reference to construction cost, the base ordinarily excludes expenditure incurred after the architect abandoned the project, unless the additional work formed part of the original project or resulted from an increased scope executed under the architect’s direction. An agent’s harassment committed while recovering a principal’s debt may fall within the scope of the agency, making the principal vicariously liable.

The claimant architectural practice claimed fees for architectural and interior design services provided during the renovation of the defendants’ home. The defendants disputed the retainer and the proper basis for valuing the services. They counterclaimed for losses caused by failures in design, supervision, cost control and contract administration, including damage caused during a debt-collection exercise. The court determined the reasonable fee, the appropriate construction-cost base, the interior-design claim and the counterclaim.

1. Fee assessment. The claimant had failed to record the terms of its engagement as required by item 11.1 of the Architects Code of Conduct. The reasonable fee therefore had to be assessed by reference to the value of the services actually rendered. The court preferred a pragmatic assessment considering each RIBA stage both individually and as part of the whole service. Negligent or incomplete performance could reduce the value of earlier and later stages, subject to avoiding double recovery.
2. Reasonable percentage and cost base. A reasonable architectural fee was 9 per cent, reflecting a competitive 10 per cent rate, a 2 per cent historic-building uplift and a 25 per cent overall reduction for deficient performance and incomplete later stages. The construction-cost base was £405,451. Expenditure incurred after the claimant’s withdrawal and the contractor’s insolvency could not attract a fee unless it represented original-project construction or a bona fide increase in scope executed under the claimant’s direction.
3. Interior design. Most of the interior-design work fell within the ordinary architectural service. Only £2,500 was recoverable because the claimant failed to prove additional chargeable work or that an additional fee had been agreed.
4. Counterclaim and agency liability. The court awarded the defendants £58,880.98 for breaches concerning design, listed-building work, supervision, procurement, planning appeals and the car damage. Applying Majrverskiv Guys v St Thomas NHS Trust (2006) UKHL34, the court held that harassment by the claimant’s debt-collection agent was within the scope of the authority granted to recover the debt. The claimant was therefore vicariously liable. The claim was assessed at £42,047 plus VAT, and the counterclaim at £58,880.98.

Not stated in the judgment.