BDW Trading Ltd v Integral Geotechnique (Wales) Ltd

A professional adviser who prepares a report for one contracting party does not necessarily owe a tortious duty to a prospective purchaser who receives and relies on it. The court must objectively assess the whole commercial, contractual and factual context, including any assignment mechanism, third-party rights exclusion, liability limitation and disclaimer. Where the parties contemplated legal reliance only through an assignment, reliance without that document may not establish an assumption of responsibility. A professional’s duty is also defined by the purpose for which the report was commissioned. Advice prepared to inform site development does not automatically include advice on whether a prospective purchaser should acquire the site or on the financial risks of doing so.

BDW Trading Ltd, a housebuilder, claimed in professional negligence against Integral Geotechnique (Wales) Ltd, consulting engineers who had prepared a geotechnical and geo-environmental report for the site owner. There was no contract between the parties. The report concerned a proposed residential development and was supplied to prospective purchasers. It stated that it could be assigned to the eventual purchaser, but also contained restrictions on use and passing on. The contractual terms included an exclusion of third-party rights and a liability limitation.

After acquiring the site, BDW discovered asbestos-containing materials in the ground and claimed remediation and consequential losses. The issues were whether IGL owed BDW a duty of care, whether the report was negligent, what loss was recoverable, and whether BDW was contributorily negligent.

1. Duty of care. The claim was dismissed because IGL had not assumed responsibility to BDW for legal reliance on the report. The objective assessment included the report’s statement that it was for Bridgend’s use and should not be passed on without consent, the statement that it could be assigned to the eventual purchaser, the contractual exclusion of third-party rights, and the liability limitation.
2. The assignment statement conveyed that the eventual purchaser could place legal reliance on the report only through an assignment or another appropriate legal document, such as a reliance letter, novation or collateral warranty. BDW knew, or ought to have known, that it needed to obtain such protection. Its failure to do so resulted from internal oversight or confusion. IGL’s willingness to provide an appropriate document if asked did not alter the objective position.
3. The relevant inquiry was whether IGL had assumed responsibility in the particular circumstances. The report’s purpose was to provide a geotechnical and geo-environmental appraisal and a basis for design. It did not impose a duty to advise a prospective purchaser about whether to acquire the site, the financial risks of acquisition, or the terms on which it should bid.
4. Alternative findings. Even if a duty had existed, IGL would not have been liable for clean-up costs beyond the contractual limitation. The court also found that the report was not negligent. Although it should have identified asbestos in made ground as a potential contamination source, the trial pits revealed no asbestos, the remaining risk was hypothetical and unquantifiable, and the report recommended further inspection and testing across the site during clearance.
5. If liability had arisen, the loss would have been assessed as a lost chance that Bridgend would have agreed a reduced purchase price after further investigation and costing. The court would have valued that chance at 75 per cent and awarded approximately £1 million, but this was unnecessary because the claim failed on duty and breach.