We provide a brief round-up of recent decisions in which the Courts have considered the scope of a professional’s duty. These decisions illustrate the way in which the test set out in Manchester Building Society v Grant Thornton [2021] UKSC 20 (“MBS”) has been applied to date.

BDW Trading Ltd v URS Corp Ltd [2021] EWHC 2796 (TCC)

A structural designer's duty to exercise reasonable skill and care in carrying out design work extended to the risk of economic loss arising from the structural defects caused by its negligent design. However, it was under no duty in respect of any reputational loss the Claimant developer might suffer.

This was a preliminary issue decision which will be welcomed by professionals facing claims for reputational damage tagged on to negligence claims. Such losses may often be too remote to be considered “relevant”.

Knights v Townsend Harrison Ltd [2021] EWHC 2563 (QB)

An accountant introduced its clients to tax avoidance schemes, providing disclaimers to the effect that it was not recommending any particular scheme and that it could not advise as to whether the schemes would succeed. It faced claims from a former client when a number of such schemes failed.

The Defendant’s use of disclaimers was one fact to take into consideration when assessing whether there had been an assumption of responsibility. On the facts here, including the disclaimers, and that the schemes were not inherently unsuitable either generally or for this particular client, the Defendant did not assume a duty to conduct due diligence on or advise as to the efficacy of the schemes.

The Court was concerned principally with the Hedley Byrne test concerning assumption of responsibility, though the decision also addressed more briefly the MBS principles and we consider this unsurprising decision will be welcomed by professional advisers.

Charles B Lawrence & Associates v Intercommercial Bank Ltd [2021] UKPC 30

Losses suffered as a result of a guarantor having defective title over mortgaged property were held to be outside the scope of the Defendant valuer's duty of care and thereby irrecoverable.

Applying the test set out in MBS, the Privy Council found that the purpose of the Defendant’s valuation report was to value the property on the assumption that there was good legal title. It was for the conveyancing lawyers, not the valuer, to advise about the legal title.

The Privy Council considered that the counterfactual ‘SAAMCo’ test - whether the Claimant would have suffered the same loss if the information or advice had been correct – would have led to a different outcome, such that this is a case where SAAMCo (or for that matter the MBS case) is not a helpful cross-check.

Radia v Marks [2022] EWHC 145 (QB)

The Court considered the scope of the duty of care owed by a single joint medical expert, in circumstances where the expert’s evidence conflicted with the Claimant’s case, which contributed to the Employment Tribunal making adverse findings about the Claimant’s credibility.

Applying MBS the Court concluded that the expert’s duty of care did not extend to protecting the Claimant from adverse credibility findings. It was also found on the facts that the Defendant had not breached any such duty had it existed.

The Claimant in this case was found by the ET to have been dishonest in a number of respects and it is unsurprising that his claim failed. However, from the Court’s application of MBS it would appear to follow that expert witnesses will never be liable for damage to a party’s credibility even when the damage is caused by the expert’s error. It seems to us that in different circumstances this may produce some harsh decisions, though this may be mitigated by any available appeals process in the underlying litigation.

Conclusion

This selection of scenarios covers a range of professionals, and there is inevitably risk in reading too much into how such matters would impact on solicitors’ cases. There have, unsurprisingly, been concerns as to whether the outcome in the MBS case might herald a more difficult claims environment for professionals. The early cases applying MBS do not bear this out, and are pleasingly unremarkable in the decisions reached.