UK: The Client Must Get Who It´s Promised

Last Updated: 13 August 2009
Article by Rupert Choat and Daniel Guilfoyle

Consultants' appointments and construction contracts often specify that certain individuals will work on a given project. This is because the client wants to ensure that, say, the big name architect he engages actually leads the design of his new building or the contractor's project manager he knows and trusts is the same person who oversees the works. Without a material representation or contractual provision as to who will be involved, the consultant or contractor usually has free rein as to how it resources the project.

A recent case underlines the significance of assurances that certain people will be involved on a particular project.

Fitzroy Robinson were engaged as the architects for the development of three iconic buildings in London and Buckinghamshire. The Fitzroy team assigned to the project was led by Mr Jeremy Blake. However, while it was estimated that the project would take around three years, Mr Blake had in fact tendered his resignation before Fitzroy's appointment was concluded. This meant he would be available to the project for no more than the first year.

The Court found that Fitzroy did not tell the client that Mr Blake was leaving because it feared losing the appointment. Mr Blake was the principal reason the client had contacted Fitzroy in the first instance and one of the main reasons it was appointed. The judge agreed that Mr Blake's involvement was fundamental to the client's decision to engage Fitzroy and had they known of his early departure from the project an alternative firm of architects may have been appointed. According to the Court, Fitzroy should have brought Mr Blake's decision to the client's attention but instead a conscious decision was made to withhold this information. This amounted to fraudulent misrepresentation and deceit.

The client is now entitled to damages for the losses it suffered as a result. These may be modest. Even on the basis that but for the misrepresentation/deceit Fitzroy may not have been appointed, it was not proven that Mr Blake's departure caused any delay to the project. The client's entitlement may be limited to a reduction in Fitzroy's fees representing the disruption within Fitzroy and duplication of its work arising from Mr Blake's departure.

The reputational issues raised by this case are obvious. But, to compound matters, the Court also found that Fitzroy's chief executive "knowingly and dishonestly failed to correct the false representation as to Mr Blake's involvement in the project" before Fitzroy's contract was concluded and gave evidence that he knew to be untrue.

This decision is a warning to consultants and contractors to give careful consideration to the resources that they agree to utilise when carrying out work for a client. We recommend the following:

  • If an individual is proposed as a central part of the project team the simplest thing for the consultant/contractor to do is to make it clear that team members may change. However, the client may want to ensure that a key individual is involved on the project. In that case, it makes sense to provide expressly in the contract for that key individual to be involved and not replaced without the client's consent (not to be unreasonably withheld). While it is hard to ensure that a key individual remains involved, contracts occasionally provide for liquidated damages to be paid if a key individual leaves the project early (although it remains to be seen if such a provision is enforceable).
  • An individual may be named in the contract without providing for his replacement (if, say, an organogram in the tender becomes a contract document). The consultant/contractor may then breach the contract by failing to involve the promised individual. However, terms are likely to be implied requiring the consultant/contractor to notify the client promptly of a change in personnel and for the client to approve or reject a replacement in its reasonable discretion. The judge found such implied terms given that Fitzroy's contract named Mr Blake as team leader but said nothing about his replacement. Fitzroy also breached this implied term.
  • Overall: if it becomes apparent that a key individual will be not be available as proposed, it is advisable to inform the client as soon as possible especially if the relevant contract has yet to be concluded.

A client is unlikely recover substantial damages for a misrepresentation by a consultant/contractor that an individual would be involved in a project who was then not. However, in extreme cases, the client may avoid the entire contract. Alternatively, the client may have the right to injunct the consultant or contractor against involving a replacement until someone to its reasonable satisfaction is engaged. If the project is delayed or disrupted while a satisfactory replacement is found complications can arise as to who is responsible. As ever, it makes sense for all concerned to make as clear provision as possible in the contract for key individuals and their replacement.

Reference: Fitzroy Robinson Ltd v Mentmore Towers Ltd [2009] EWHC 1552 (TCC)

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq

Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.

The original publication date for this article was 13/08/2009.

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