Introduction
In STV Central Ltd v Semple Fraser LLP and CBRE Limited [2014] CSOH 82, Semple Fraser ('SF') failed to claim a contribution from CBRE after settling a professional negligence claim by STV relating to an erroneous rent review clause.
The Facts
In 2003, STV decided to relocate to new offices at Pacific Quay, Glasgow, and SF and CBRE were instructed to act to obtain a lease, which was concluded in 2006.
The lease contained an RPI-linked rent review clause. However, an error in the formula would have resulted in a rent liability of £100m by 2025. After making this discovery, STV and the landlord entered mediation, with the landlord agreeing to a new formula in exchange for STV paying various charges.
In 2012, STV raised an action for professional negligence against SF. SF admitted liability and paid to settle the action. SF then sought a contribution from CBRE for their role in the conclusion of the lease.
The Issues
SF asked CBRE to provide advice on the wording of the formula. CBRE said they were happy in principle with the use of RPI, but did not specifically comment on the wording. SF again asked for commentary, but CBRE did not reply.
SF accepted that CBRE had no duty to draft or revise the lease. However, SF claimed that, as part of the professional team advising STV, CBRE had a contractual duty to provide expert advice. Alternatively, under delict, SF claimed that CBRE had voluntarily accepted responsibility to STV based on previous advice they had provided.
The Decision
Lord Woolman rejected both legs of the claim. The court must determine if CBRE would have been found liable if STV had sued them directly. SF could not point to any document in which STV instructed CBRE, or where CBRE provided advice to STV. There was nothing to suggest CBRE had any contractual duty to STV.
It was also held that while CBRE responded to e-mails, it resisted providing direct advice on the rent review formula. As CBRE never expressly approved the formula, it was doubtful that CBRE assumed responsibility. There was also no suggestion of reliance by STV on CBRE.
Comment
Professionals should take heed of Lord Woolman's comments on contractual duty of care and assumption of responsibility when asking for, or being asked to provide, advice and information which may be relied on. You should also ensure that every question asked is properly answered and, if it is not, report that back to your clients.
Disclaimer
The material contained in this article is of the nature of general comment only and does not give advice on any particular matter. Recipients should not act on the basis of the information in this e-update without taking appropriate professional advice upon their own particular circumstances.
