Reliability of reports

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BDW Trading v Integral [2018] EWHC 1915. 179 ConLR112, TCC

Facts

Bridgend Council in South Wales wished to sell a brownfield site for development. It appointed consulting engineers, Integral, to carry out a risk assessment to establish if  asbestos containing materials might be present.

The Council showed various tenderers this report, including the eventual purchaser, BDW, a part of the Barratt building group. Unfortunately the report proved to be incorrect and BDW incurred significant expense in cleaning up the site which they had not budgeted for and they subsequently brought proceedings against Integral for negligence in tort.

Integral relied upon the wording of its report which stated that although it would be willing to enter into an assignment with the Council’s purchaser, it would not otherwise accept any third party liability. BDW did not get such an assignment, therefore there was no contractual liability.

As regards negligence, no duty of care was owed because the report stated that it was not to be passed on to third parties without the consultant’s express consent and further that it was only for the use of Bridgend Council.

Held

  1. A duty of care in tort can be acquired where there is sufficient relationship in proximity, [which was clearly not the case here] or alternatively where the “three-fold test” is met. That test is (1) was the loss reasonably foreseeable; (2) was there a sufficient relationship of proximity and (3) was it fair just and reasonable to impose a duty in all the circumstances? The Judge ruled no on all 3 heads of this test.
  2. The wording of the report made it very clear that the consultant was only willing to accept legal responsibility if there had been an assignment put in place. The fact that if the consultant almost certainly would have given a suitable assignment to BDW if asked did not matter. BDW had failed to ask and therefore could not get around the fact that the report plainly excluded on its face any reliance by a third party upon the contents.

Comment

An assignment would have given BDW no greater rights than the Council had under the contract for services between the consultant and the Council. In any event, this contract excluded or limited the consequences of any negligence. Hence, if BDW had received an assignment it would not necessarily have been able to recover the damages it sought in negligence. The clean-up costs were allegedly £140,000. The consultant had limited its liability of clean-up to not more than £30,000.

For more specialist legal advice contact our Construction & Engineering team.