Jenni Glover & Anor v Fluid Structural Engineers & Technical Designers Limited

On an application for strike-out or summary judgment, the court applies the same legal test where the alleged defect is that the claim is bad in law. Summary determination remains inappropriate where the issue concerns developing or fact-sensitive principles, or disputed evidence requiring a trial.

Losses arising from investigation, litigation or dispute resolution may in principle fall within a structural engineer’s duty of care. The question is whether, applying the purpose and scope of duty principle, the losses have a sufficient nexus with the risks against which the duty was undertaken.

A repayment claim for professional fees requires proof that the relevant services were not performed or were performed so poorly as to be worthless. The application of that rule may itself require factual investigation, including analysis of any severable contractual stage.

The claimants, residential owners, brought claims against their structural engineer arising from alleged failures to monitor, inspect and record construction works. They claimed legal, expert and investigation costs said to have been incurred because the defendant’s breaches created confusion about the works, together with repayment of fees for construction-phase and later inspection services.

The defendant applied to strike out or obtain summary judgment, arguing that the costs fell outside the scope of its duty and that the repayment claims could not succeed because services had been provided. The issues were whether the pleaded losses were legally recoverable and whether the repayment claims were incapable of succeeding on the pleaded and available evidence.

1. The application was dismissed. Both the costs claim and the repayment claim were to proceed to trial, subject to any settlement at mediation.

2. For strike-out under CPR r 3.4(2)(a) and summary judgment under CPR r 24.2, there was no material difference between the tests where the complaint was that the case was bad in law. Strike-out or summary judgment may be appropriate where, assuming the facts pleaded or established, the claim cannot succeed. The court should not conduct a mini-trial on disputed evidence, and should exercise particular caution in an area of developing jurisprudence.

3. The losses claimed were unusual enough to justify consideration by reference to the purpose and scope of duty checklist in Manchester Building Society v Grant Thornton UK LLP [2021] UKSC 20. The relevant questions were the risks of harm against which the defendant assumed responsibility and whether there was a sufficient nexus between the claimed harm and the subject matter of the duty.

4. On the assumed facts, the construction-phase duties arguably extended beyond identifying and remedying structural defects. They arguably included protecting the claimants’ interests against confusion concerning the as-built works and the consequences of damage claims by neighbours and claims involving contractors, professionals and insurers. Legal fees, expert fees, opening-up costs and the costs liability arising from discontinuing against an insurer were therefore arguably within the scope of duty and sufficiently connected with it. Whether breach, factual causation and legal responsibility were established remained matters for trial.

5. The repayment claim was governed by the common law because the Consumer Rights Act 2015 did not apply. Abatement was unavailable as the basis of a damages claim. Repayment could nevertheless be available where the relevant services were not performed or were so poorly performed as to be worthless. In a severable contract, the analysis could relate to a discrete stage, but the proper contractual allocation and valuation required consideration.

6. The evidence, including the expert’s criticism of the apparent absence of inspection records and fortnightly visits, meant that it was at least possible that the claimants could establish that relevant services were worthless. The legal and factual difficulties did not justify summary dismissal.