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Mates rates: a cautionary tale
Lawyers know as well as anyone that professionals are often approached by friends and family for a little off-the-cuff advice. Whilst everyone wants to help out a friend in need, there is an inherent risk in proffering informal advice – not least, that it can turn the friendship sour if it ends in dispute. The case of Burgess & Another v Lejonvarn  EWHC 40 (TCC) - a recent trial of preliminary issues - considers whether a legal duty of care can arise between friends, and serves as something of a cautionary tale when it comes to providing professional services to friends.
The Burgesses had obtained a quotation from a well-known landscape gardener to carry out a project to landscape their garden – the quotation was for approximately £20,000. Basia Lejonvarn, a neighbour and close friend of the Burgesses who happened to be a foreign-qualified architect who had performed professional services for the Burgesses before, believed this to be too expensive and told the Burgesses that the works could be completed for a smaller budget. Lejonvarn secured a contractor to carry out the earthworks and hard landscaping for the Burgesses and essentially managed the contractor relationship. Her intention was to provide subsequent design input in respect of the “soft” elements of the project, such as lighting and planting, when that stage was reached. She did not charge for the initial work, but intended to charge a fee for the “soft” elements – however, the project never reached that stage.
The Burgesses became increasingly concerned about the quality and cost of the project work, and the relationship between them and Lejonvarn deteriorated. The Burgesses ultimately engaged the landscape gardener who provided the original quote to complete the project, and claimed against Lejonvarn, in both contract and tort, for the increased cost of completing the project.
The judge’s intention was to assist the parties in attempting to avoid a subsequent trial, or at least to minimise the scope for disagreement at any trial. The judge considered five preliminary issues:
- Was a contract concluded between the Burgesses and Lejonvarn?
- If so, what were its terms?
- Did Lejonvarn owe a duty of care in tort?
- If so, what was the nature and extent of her duty?
- Was a budget of £130,000 for the project discussed between the Burgesses and Lejonvarn, and if so when?
In relation to the first two issues, as to whether a contract had been concluded and what its terms were, the judge called on legal precedents that referred not to the parties’ actual intentions, but what those intentions would reasonably be understood to be from the parties’ communications with each other. The judge found that it was impossible to draw out the legal elements required for a contract from the inchoate emails exchanged between the Burgesses and Lejonvarn. Leaving aside the fact that there was no discussion about fees, “nothing was said about the duration of services, provision for their termination or any other clauses of the type typically to be expected in a professional’s terms of engagement. In addition, the parties never discussed, or even mentioned, the notion that they would be entering a contact between themselves.” In short, there was simply no agreement, and the parties did not intend to be legally bound by a contractual relationship.
In light of the judgment that there was no contract, the sole basis upon which legal liability could exist between the Burgesses and Lejonvarn was if a duty of care in tort existed. In relation to the third and fourth issues, the judge called on legal precedents that considered that “if someone possessed of a special skill undertakes, quite irrespective of contract, to apply that skill for the assistance of another person who relies upon such skill, a duty of care will arise.” The judge found that it is well established in case law that, in respect of advice and/or any service in which a special skill is exercised by a professional, a duty of care extends to the protection against economic loss.
The judge also considered the fact that Lejonvarn was providing certain project management services for free, on the basis that she only intended to seek specific payment for the second phase once the earthworks had been completed. The judge found that the fact that the services were free did not mean that they were informal or social in context – in fact, the services were all provided in a professional context and on a professional footing.
Lejonvarn was found to owe a duty of care to the Burgesses to exercise reasonable skill and care in the provision of professional services acting as an architect and project manager. This covered the selection and procurement of contractors and professionals by Lejonvarn, project management and supervision of the works, and detailed design work by her. The judge also held that the Burgesses and Lejonvarn had discussed a budget of £130,000 on two occasions and that Lejonvarn knew that the Burgesses were relying on that figure – she had therefore assumed responsibility to the Burgesses for the accuracy of that budget figure.
Whilst this may serve as a warning to any professional who is preparing to offer informal advice or services to a friend, the judge did note that “this was a significant project…being approached in a professional way. This was not a piece of brief ad hoc advice of the type occasionally proffered by professional people in a less formal context. Instead, the services were provided over a relatively lengthy period of time and involved considerable input and commitment on both sides. They also involved significant commercial expenditure on the part of the Burgesses. It would be wrong to categorise this as akin to a favour given without legal responsibility.”
This perhaps serves as a reminder that, whilst a brief piece of ad hoc advice or work in an informal context might not result in any difficulties, anything more significant – whether between friends or not – should be documented in a contract to avoid any disputes later down the line. In the absence of a contract, it is important to exercise greater care in distinguishing between social and professional relationships.
For further information, please contact Pippa Denny.