May 3, 2021

A recent decision between Multiplex Construction Europe Ltd v Bathgate Realisations Civil Engineering Ltd [2021] EWHC 590 (TCC) considered whether warranties and a duty of care provided by RNP Associates Ltd (RNP) extended to a head contractor (Multiplex), where RNP was discretely engaged by a subcontractor (Bathgate) for design certification services.

Multiplex was the D&C Contractor for a substantial construction project of three buildings in a large public space in London (the Project). In 2015, Multiplex engaged Bathgate as the subcontractor for the concrete works on the Project. Under the terms of the subcontract, Bathgate was responsible for designing both the sub-structure and superstructure works.

Pursuant to clause 2.13.1 of the subcontract, Bathgate warranted to Multiplex that it had “exercised…all reasonable skill, care and diligence to be expected of a properly qualified and competent architect or other appropriate designer experienced in designing work of a similar size, scope, nature and complexity” to the design of concrete works.

Bathgate engaged RNP to provide design-certification services for the concrete works. There was no contractual relationship between Multiplex and RNP.

In mid-2016, Multiplex exercised its contractual right to terminate the subcontract following Bathgate entering administration. Bathgate had only completed 7 of the 37 levels of the core works and Multiplex subsequently appointed Byrne Brothers Ltd (Byrne) to complete the remaining works.

Byrne identified defects in the construction and design of some of Bathgate’s works (the Slipform Rig Works) that needed to be rectified before any works could continue. Relevantly, the Slipform Rig Works formed part of RNP’s design certification scope of services. RNP entered liquidation in 2018, but was insured.

In the absence of a contractual link between Multiplex and RNP, Multiplex sought to advance a tortious claim for pure economic loss against RNP (through RNP’s insurer) for neglecting to identify Bathgate’s failures to exercise reasonable skill and care in designing the Slipform Rig Works. Multiplex claimed that:

  •   RNP were in breach of a duty of care and/or warranties set out in its design certificates provided to Bathgate, as RNP had not used reasonable skill and care in the design check to ensure that Bathgate’s design of the Slipform Rig Works accorded with the head contract design brief, current industry practice and relevant design codes.
  •   RNP knew or ought to have known that its design check certificate(s) would be seen and relied upon by Multiplex; and
  •   therefore, RNP owed Multiplex a duty of care, arising from an assumption of responsibility.

Ultimately, the English High Court held that RNP did not owe Multiplex a duty of care. In reaching this decision, the Court noted (amongst other things) that:

  •   this Project had a large number of participants, and the ‘consciously created contractual relationships’ between these participants did not include any contractual relationship or responsibility between RNP and Multiplex;
  •   Multiplex was not involved in selecting RNP to act as an independent design certifier, nor was it involved in negotiating the terms of the design certification services agreement;
  •   it would be inconceivable that any reasonable businessman would have considered RNP to have voluntarily assumed an unlimited responsibility towards the main contractor on a highly complex construction project; and
  •   RNP did not provide any warranties to Multiplex in its certificates; such warranties only applied as between RNP and Bathgate.

The decision confirms that Courts will be reluctant to find that parties providing services in a discrete part of a major construction project owe a duty of care to other project parties, with whom no direct contractual relationship exists. This may be distinguished from cases where parties have had an opportunity through direct contractual relationships to protect themselves from identifiable types of pure economic loss, but have failed to do so. In these circumstances, as it was in Brookfield Multiplex Ltd v Owners Corporation Strata Plan 61288 & Anor [2014] HCA 36, Courts may also be reluctant to find a duty of care is owed.

The full decision can be accessed here.

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