Lejonvarn v Burgess & Anor

The absence of a contract does not preclude a tortious duty to protect against pure economic loss where a professional assumes responsibility for services in a relationship akin to contract. The relevant inquiry is assumption of responsibility, assessed from conduct and all the circumstances; in core cases it subsumes any separate fair, just and reasonable inquiry. The duty is not an obligation to provide services. It is a duty to exercise reasonable skill and care in services actually undertaken and performed. That may include project management, site inspection and supervision, design, payment advice and cost control. The content of the duty must remain tied to the detailed services actually provided.

The Burgesses engaged their friend, Mrs Lejonvarn, to assist with landscaping works at their home. She selected contractors, prepared design material, managed the project, advised on payments and monitored costs. The works were provided without a concluded contract, although Mrs Lejonvarn expected payment for later stages and was operating in a professional context.

Following a preliminary-issues trial, the Technology and Construction Court held that no contract had been formed but that Mrs Lejonvarn owed a tortious duty to exercise reasonable skill and care in providing specified architectural and project-management services. The appeal concerned whether any duty could arise without a contract and the nature and extent of the specific duties.

Hamblen LJ, with whom Irwin LJ and Gloster LJ agreed, dismissed the appeal, subject to recasting the answer to preliminary issue (iv).

1. The appropriate framework was assumption of responsibility. A relationship akin to contract may arise without a contract, including where professional services are provided gratuitously. The relevant matters included the professional context, the services actually undertaken, the clarity of their scope, the Burgesses’ reliance, the proximity between the parties and the foreseeability of economic loss. The absence of consideration and contractual intention was relevant but not determinative.
2. In the core categories identified in Henderson v Merrett Syndicates Ltd [1995] 2 AC 145 and Customs and Excise Commrs v Barclays Bank plc [2007] 1 AC 181, assumption of responsibility may subsume the threefold approach in Caparo Industries Plc v Dickman [1990] AC 605. Fairness, justice and reasonableness are considered when drawing the legal inference of responsibility, so no separate inquiry was required.
3. The duty was not a positive obligation to provide architectural or project-management services. It was a duty to exercise reasonable skill and care in services actually provided. The distinction between contractual positive obligations and tortious duties was preserved, applying the reasoning in The Zephyr [1985] 2 Lloyd’s Rep. 529.
4. The absence of an equivalent tortious duty on a builder did not prevent a professional from assuming responsibility for separate architectural and project-management services. The builder and professional performed different functions. The relevant distinction was supported by Murphy v Brentwood District Council [1991] 1 AC 398 and Robinson v PE Jones (Contractors) Ltd [2012] QB 44.
5. The specific duties were confined to services actually provided: project management and supervision; design sufficient for a fairly firm budget estimate; design for construction; advice on contractor payment applications; and cost control. The duty could not be defined in overly specific terms before the detailed evidence of what had been done was considered. Reliance did not require proof that another person would have provided the same services.

The preliminary issue was therefore recast to state that, in providing those professional services, Mrs Lejonvarn owed a duty to exercise reasonable skill and care. Subject to that revision, the appeal was dismissed.

• Court of Appeal (Civil Division): The appeal was dismissed, subject to recasting the answer to preliminary issue (iv).
• Queen’s Bench Division, Technology and Construction Court: The court held that no contract had been concluded but that Mrs Lejonvarn owed a tortious duty of care in providing specified professional services: [2016] EWHC 40 (TCC).