Last edited 09 Jun 2015

Gable House Estates Ltd v The Halpern Partnership and Another

In Gable House Estates Ltd v The Halpern Partnership and Another, Judge Esyr Lewis QC derived the following principles from Henderson and Others v Merrett Syndicates Ltd and Others:

A concurrent duty in tort can exist where the parties are in a contractual relationship if the terms of the contract do not preclude it.
That concurrent duty in tort will arise and enable a plaintiff to recover damages for economic loss where, for example, in a contract for services, certainly where the defendant has special knowledge or skills, the defendant assumes responsibility to the plaintiff. The assumption of responsibility to perform those services with due skill and care will arise from the very nature of the services which the defendant undertakes to provide.
There must, however, be a 'concomitant reliance' by the plaintiff to enable them to establish their claim.
‘Reliance' may take different forms in different circumstances.
The assumption of responsibility and the duty to take care is not confined to cases concerned with erroneous information and advice. For example, a solicitor may be liable if they fail to do something that it was their responsibility to do for their client, which causes loss. In this kind of situation, the fact that the solicitor had been retained and what they failed to do was within the scope of the duties their retainer required of them will be sufficient to establish reliance.
However, where the complaint is that there has been negligent advice or negligent misinformation, the plaintiff must show that they specifically relied on that advice or were actually misled.

Principles 2 to 5 appear to some commentators to be 'propping open the rear window'. Certainly this was the view, albeit obiter, of Bedlam LJ in the case of Barclays Bank pic v Fairclough Building Ltd, where he stated:

'A skilled contractor undertaking maintenance work to a building assumes a responsibility which invites reliance no less than the financial or other professional adviser does in undertaking his work. The nature of the responsibility is the same though it will differ in extent... I would hold that [the sub-contractor] in performing the work ... sub-contracted to it owed a concurrent duty in tort to avoid causing economic loss by failing to exercise the care and skill of a competent contractor.’

By way of contrast, in Plant Construction plc v Clive Adams Associates and JHM Construction Services Ltd the court at first instance held that the facts of that case did not disclose a relationship which would give rise to any duty of care between a third party sub-contractor, JMH, and the employer, Ford. Judge Humphrey Lloyd QC considered that the imposition of a duty of care on the basis of an assumption of responsibility was wholly inconsistent with the contractual structure between employer and main contractor. The court was acting on the constraint enunciated by Lord Goff in Henderson and Others v Merrett Syndicates Ltd and Others. It would appears to some that the ratio in Junior Books Ltd v Veitchi Co Ltd is being 'laid to rest' slowly but with dignity.