In January 2011, the Court of Appeal handed down judgment in Robinson v Jones, which concerned the extent to which a building contractor could be held, in addition to its contractual obligations, to owe a duty of care in tort not to cause pure economic loss.
In delivering the leading judgment, Jackson LJ emphasised that the case amounted to a restatement of principles, set out by the House of Lords in the 1970s and 1980s. However, Robinson v Jones has generated interest because this is an area where there has been a degree of confusion. Even after Robinson v Jones, there still seems to be a fair degree of uncertainty in what is an evolving area of law.
What went before?
In a series of decisions between 1995 and 2005, various TCC judges analysed the duties owed by building contractors:
- In Storey v Charles Church Developments plc [1995] 73 Con LR1, HHJ Hicks QC held that builders did owe concurrent duties not to cause economic loss.
- In Samuel Payne v John Setchell Limited [2002] BLR 489, HHJ Humphrey Lloyd QC held that they did not.
- In Tesco Stores v Costain, HHJ Seymour QC held that they did.
- In Mirant-Asia Pacific v OAPIL, HHJ Toulmin CMG QC held that, while engineers owed concurrent duties of care in contract and tort, a contractor might be in a different category.
As Jackson LJ said in Robinson v Jones, the editors of Keating on Construction Contracts (Sweet & Maxwell, eighth edition, 2006, paragraph 7-018) had noted that the point needed to be resolved by the higher courts.
Facts in Robinson v Jones
In December 1991, Mr and Mrs Robinson agreed to purchase a house being built by the defendant builder. The contract included terms requiring the defendant to build in an efficient and workmanlike manner, completing the work shown on certain drawings and the specification. It also provided that the parties would enter into an NHBC standard form of agreement. The defendant’s liability to the claimant was limited to the NHBC agreement “on which alone [its] rights and remedies were founded.”
The works were completed in April 1992. In September 2004, a routine British Gas inspection revealed that the gas flues had not been constructed in accordance with good building practice. Remedial works included the reconstruction of the flues and approximately £35,000 was claimed.
Proceedings were commenced in December 2006, well over six years after any breach of contract on the defendant’s part, but within three years of the claimant’s discovery of the defect. It is the availability of section 14A of the Limitation Act 1980, enabling a claimant to bring a claim outside the initial six-year period, which makes the distinction between a cause of action framed in contract and one in tort significant in certain factual scenarios.
The Court of Appeal’s reasoning in Robinson v Jones
The Court of Appeal held that the builder owed no concurrent duty of care in tort not to cause pure economic loss. In doing so, it started from the position that a builder of a building is to be equated with a manufacturer of a product. In each case, the contract is the primary determinant of legal responsibilities. The law of tort imposes a duty that is more limited than any contractual duty, namely to take reasonable care to protect the purchaser against suffering personal injury or damage to other property. This duty is owed not just to the first person to acquire the chattel or building but also towards others who foreseeably own or use it.
Jackson LJ indicated that, absent authority to the contrary, he would take the view that these should be the only tortious obligations imposed in the context of a building contract. However, he recognised that in the light of Henderson v Merrett, that position was not open to the court. Instead it was:
“necessary to look at the relationship and the dealings between the parties, in order to ascertain whether the contractor or sub-contractor ‘assumed responsibility’ to its counter-parties, so as to give rise to Hedley Byrne duties.”
The essential elements, therefore, were an assumption of responsibility coupled with reliance on the party who assumed that responsibility. It is worth noting that Jackson LJ said his conclusion would have been the same even if the parties’ agreement had not contained clauses that provided that the builder would only owe the duties set out in the NHBC agreement.
What does this all mean?
The decision in Robinson v Jones makes it clear that when considering the duties that builders owe, the starting point will be that there is no duty owed in tort not to cause pure economic loss. On facts which are the same or similar to Robinson v Jones, it now seems very unlikely that any such duty of care in tort will be found.
However, the outcome may be different where, for example, the builder has at least some design responsibility, whether by virtue of having drawn up plans, amended existing plans or having provided advice on the need for building regulations approval.
Jackson LJ expressly left open the possibility that, in appropriate circumstances, it will be debatable whether a duty of care should be imposed. Builders are not being put in a category all of their own. Rather, whereas with professionals there is a presumption – difficult but perhaps not impossible to rebut – that there was an assumption of responsibility and reliance, with builders, the starting point will be that there was no such assumption and reliance.
