William Clark Partnership Ltd v Dock St PCT Ltd

A professional client may defend a claim for fees by showing that a discrete professional service was not performed, or was so poorly performed that it was worthless. That is distinct from abatement, which is unavailable as a defence to a claim for payment for professional services. A client cannot obtain a reduction merely because a service was performed imperfectly. A global professional-negligence claim for a project cost overrun remains permissible in principle, but the claimant must prove breach, causation and loss on the balance of probabilities. A cost overrun cannot simply be attributed to professional breaches without analysing other possible causes and identifying the loss caused by the breaches.

William Clark Partnership Ltd, a quantity surveying and project management practice, claimed the balance of its fees under a deed of appointment relating to the construction of a primary healthcare centre. Dock St PCT Ltd alleged defective and incomplete services, sought damages for professional negligence and claimed deductions from the fees.

The dispute concerned pre-construction tendering and cost planning, construction-phase cost control and allegedly unnecessary variations, and post-construction analysis of the contractor’s final account. The central questions were whether Clark had substantially performed its services, whether Dock Street could deduct sums from the fees, and whether the alleged breaches caused the claimed project overrun and settlement losses.

1. Clark substantially performed its pre-construction services and was entitled to invoice the balance of its fee. The literal references in the deed to competitive tendering were qualified by the contractual context, the retrospective nature of the deed, the prior negotiated tender process and the parties’ conduct. Even if there had been a breach, Dock Street had not proved causative loss.

2. Following Multiplex v Cleveland Bridge [2006] EWHC 1341 (TCC), abatement was unavailable as a defence to payment for professional services. However, a client could resist payment for all or a discrete part of services which had not been performed or were worthless. It could not seek a price reduction merely because performed services were incomplete or defective. Clark’s cost-estimating work was not a wholly worthless or wholly omitted discrete service, so no pre-construction deduction was allowed.

3. Clark seriously failed to provide the required monthly cost reports during the construction phase. That was a discrete omitted service, valued by agreement at £25,000, and that sum was deducted from the fees. The wider global claim failed. Although global claims were permissible in principle, Dock Street had not proved which parts of the overrun were caused by Clark rather than design development, client and tenant changes, other consultants, the contractor, prior value engineering or Dock Street’s own decisions.

4. The unnecessary-variations claim succeeded only for the courtyard works (£10,000) and internal door veneers (£42,023.46), producing damages of £52,023.46. The other alleged variations were not proved with sufficient evidence of breach and causation.

5. Clark failed to undertake a proper analysis of the contractor’s final account. That failure caused Dock Street to lose the opportunity to settle at the lower figure agreed in July 2012. Damages of £37,500 were awarded. The later attempt to increase that award by reference to pre-contract suspension costs was rejected as an unpleaded and unsupported enlargement of the claim.

6. Clark was entitled to £132,500 net fees after the construction-phase deduction. Dock Street was entitled to £89,523.46 damages. After set-off, judgment was entered for Clark in the principal net sum of £42,976.54, subject to precise quantification, VAT and interest.