What happens if the nominated team leader for a project
leaves during the course of the project?
In this UK case, a firm of architects nominated a project leader
who then did not lead the project in question. The owner sought to
refurbish a private members' club in London and entered into
discussions with the architects, Fitzroy Robinson. The architects
represented both orally and in bid documents that Mr Blake, who was
a director of the company, would be the team leader for the
Mr Blake tendered his resignation to the company in March 2006,
at about the time when Fitzroy Robinson was to commence works and
before contracts had been finalised. Mr Blake's contract of
employment required him to stay on for a further 12 months after
tendering his resignation.
The contract between the owner and Fitzroy Robinson for the
provision of professional services was signed in May 2006. Fitzroy
Robinson did not inform the owners until November 2006 that Mr
Blake had resigned. Mr Blake continued employment with Fitzroy
Robinson until March 2007, but at this time the project had at
least two years left to run.
Disputes arose between the parties, partly due to the
significant delay that had occurred in procuring the planning
approval for the project. Fitzroy Robinson brought an action to
recover its fees. The owner counterclaimed in the action for,
amongst other things, fraudulent misrepresentation in connection
with Mr Blake's resignation, stating that Fitzroy Robinson
"knew when it signed the contract that Blake had resigned
but decided not to tell us until six months after the contract had
been entered into."
It was held that in the time prior to the execution of the
contracts, Fitzroy Robinson knowingly and dishonestly failed to
correct the false representation that was made that Mr Blake was
going to remain as team leader throughout the course of the
project. In the view of the court, there was a false representation
that was deliberate, and made for the specific purpose of ensuring
that Fitzroy Robinson was awarded the work. On this basis, the test
for fraudulent misrepresentation was satisfied.
Any commitment to involve certain personnel in a project will be
binding and the significance of providing assurances in relation to
the involvement of key personnel is highlighted by this case. Where
an individual is identified as taking a central role in a project
team, it is preferable that it be made clear that members within
the team may change from time to time.
However, this may be unacceptable to a client who seeks greater
certainty that a key individual will remain involved in the
project. In these circumstances, it is advisable to seek a
commitment from key personnel that they will remain employed
throughout the duration of the project.
Further, an unavoidable loss of a key member of the project team
should be immediately communicated to the principal, especially if
the contract has yet to be concluded. A failure to notify of the
resignation of a key team member may give rise to a damages claim
for fraud, based on this authority from the English High Court.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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