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The end of a builder’s concurrent liability in contract and tort?

Can it really be true? Can there really be settled law in the vexed area of the tortious liability of building contractors?

Ever since the House of Lords’ decision in Murphy v Brentwood in 1991 there has been much debate, case law and ink spilt on this question. Cases in the TCC go one way and then the other, and case law in other areas is regularly brought into play by analogy to justify one or other of the opposing views.

Was there a concurrent duty in contract and tort?

The question was whether a contractor, having entered into a contract with its employer, could owe a duty of care in tort not to cause economic loss and thus be liable to the employer for a longer limitation period. At the time of Murphy v Brentwood, most people would probably have answered “no” to the question and (save for personal injury or damage to other property) it seemed the law of tort was dead as regards building contracts.

However, the battle was not over. Subsequent cases indicated first that professionals (see Henderson v Merrett) and then contractors themselves (for example, see Tesco v Costain) could be liable in tort concurrently with their duties in contract as regards defects.

The Court of Appeal’s judgment in Robinson v Jones refers to several first instance cases in which this issue had been addressed in the construction context. It is only in this latest judgment that the Court of Appeal has finally had an opportunity to pronounce on this question.

Robinson v Jones

In Robinson v Jones, the claimant was a house owner who had entered into a contract with the contractor to purchase a house from him and to enter into an NHBC Agreement. Crucially, the contract provided that the contractor would not be liable to the owner for any defect beyond what was provided for in the NHBC Agreement.

The question for the Court of Appeal was whether the contractor still owed a duty of care in tort to the owner for defects found in gas fire flues that fell outside the scope of the owner’s rights and remedies in the NHBC Agreement.

Jackson LJ’s judgment

The court concluded that the “heroic” age of the law of negligence (as it put it) has passed. Now the court must consider whether tortious duties should be imposed by law as a matter of policy in specific situations.

In the context of a building contract, the court said that it is wrong to subordinate the law of tort to the law of contract so as to provide co-extensive tortious duties with the contractual terms. Here, there was unlikely to be any question of an assumption of responsibility (in the Hedley Byrne v Heller sense) since the contractor’s warranties of quality and the owner’s remedies were set out in the contract.

The court concluded that even if the contract did not refer to the exclusive effect of the NHBC conditions, there would probably be no duty of care in tort, but those clauses put the matter beyond doubt.

Consequences of Robinson v Jones

So the battle would seem to be over for contractors unless this (relatively minor) case goes to the Supreme Court. The result of Robinson v Jones is that, in the absence of special circumstances indicating an assumption of responsibility, a contractor will probably not owe duties of care to avoid economic loss concurrent with those it owes in contract to its client. However, the court considered that in contracts of professional retainer, there is commonly an assumption of responsibility that generates a duty of care to protect the client against economic loss.

Thus, professionals are still on the hook and, of course, the importance of this finding is that the longer limitation period in tort can still be applicable as against them. There may also be some potential for the debate to continue in relation to design and build contractors, which the court did not expressly deal with.

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