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Construction PI: Negligence - liability in relation to unforeseen risk

Two recent cases concerning allegations of negligence raise questions as to the court’s approach in respect of risks unforeseen by an entire industry.

The pertinent facts of Greenwich Village Limited v Essex Services Group plc (2013) and 199 Knightsbridge v WSP UK Limited (2014) are remarkably similar. In each case, the claimant hired consultant M&E engineers in connection with the construction of high specification apartment blocks. The designs failed to prevent catastrophic pressure surges (CPS) in the boosted water systems when those systems were restarted after a drain-down. In both cases, a CPS ultimately caused extensive flood damage to the buildings. The risk of CPS was generally unknown to the industry at the time the projects completed around 2005/2006.

In Greenwich, the defendant consultant M&E engineers had become aware of the risk of a CPS post-design as they were alerted to that risk when a CPS occurred on another project. The defendant took steps to mitigate the risk by installing surge arrestor valves, but the revised design still failed to prevent a CPS. The court found the defendant negligent, holding that its unique familiarity with the surge arrestors (the wider industry was not yet familiar with the valves) placed a greater burden on it to ensure a correct design/specification.

By contrast, in 199 Knightsbridge, the defendant had no prior experience of the risk, had not foreseen the risk of a CPS and was not aware of surge arrestors being used in this context to address such a risk. It sought to rely on Bolam (1957): a defendant will not be negligent if it has complied with a practice adopted by a responsible body of opinion within the relevant profession.

On the evidence, the defendant engineer established that the profession was not generally aware, in 2005, of the risks of a CPS in a boosted water system. The claimant could adduce no evidence from an expert engineer, practicing in the field in 2000-2005, who was aware of the CPS risks at that time.

The court found that because the profession as a whole had failed to identify (or consider) the risk, the practice adopted did not constitute a “school of thought” for the purposes of Bolam. Consequently and, in effect, applying Bolitho v City and Hackney (1998), an evidential burden was placed on the defendant to justify on a rational basis what it did and why.

The court held that, whilst expert evidence as to contemporaneous industry practice is relevant to considering breach, only limited weight would be placed on that evidence. Although the defendant had acted in accordance with industry practice, it was, nevertheless, found to have breached its duty since the judge was not persuaded that the risk was unforeseeable (despite the evidence that no-one within the profession had foreseen it). Ultimately, however, the claim was dismissed on causation grounds.

Comment

These cases illustrate that professionals can be found liable for failing to protect against a risk that was unforeseen by the industry as a whole which one might regard as a surprising result mitigated, in the 199 Knightsbridge case, by the claimants’ failure to make good its case on causation. It is likely that the apparent tension between Bolam, Bolitho and “industry awareness” will require further clarification in future.

This article first appeared in Law-Now, CMS Cameron McKenna's free online information service, and has been reproduced with their permission. For more information about Law-Now, click here.

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