A QS can go to great lengths to get a contractor to put a performance bond in place. But if the contractor won鈥檛 pay for the bond, why blame the QS when the proverbial hits the fan?

Tony Bingham

Just how far does a QS have to go for his client? When a main contractor isn鈥檛 doing what he is supposed to do according to the contract, how much cajoling, coaxing, palavering, hitting the roof, is the employer鈥檚 QS supposed to do?

Cyril Sweett Ltd, top dog quantity surveyors (now called Sweett UK Ltd) got into a to-do with its developer client, Michael Wight Homes Ltd because the main contractor did the not uncommon foot-dragging when supposedly putting the performance bond in place. It was for nigh-on 拢100,000 being 10% of the contract value for building six houses in Somerset. Actually, the bond never did get in place. Then, guess what? The main contractor went bust.

Let鈥檚 face it, you QSs, architects, engineers, project managers have got an entire kit-bag of cock-ups that you ought to share with your client

The developer turned on Sweett because Sweett was the QS and employer鈥檚 agent. Seemingly there was a promise in the professional services contract that the QS would 鈥減repare contract documentation and arrange for such documentation to be executed by the parties thereto鈥. 鈥淵ou failed to do that,鈥 said Michael White Homes Ltd. 鈥淵ou also failed to tell me what the risks are of not having the bond in place.鈥 And by now the client was deprived of 拢100,000 which almost certainly would have been paid out by the bondsman to the developer to pay for completing the works.

It鈥檚 fairly clear that a QS is supposed to think about the risks that are consistent with the particular construction works by a developer client - and jolly well point them out. The risk that a builder might go down the pan is a first-rate example. And when it came to the usefulness of a bond Sweett won all the brownie points by telling the developer how that device reduces risk. Let鈥檚 face it, you QSs, architects, engineers, project managers have got an entire kit-bag of cock-ups that you ought to share with your client.

Interestingly, the judge listed Sweett鈥檚 schedule of duties to the developer. It was here that duty No. 4 said (in short) 鈥渁rrange for contract documents to be executed鈥. That鈥檚 where the bond was included in the contractual bundle of stuff. Neat too was Sweett鈥檚 list of 鈥渆xclusions鈥. In other words, they told their client precisely what they were not going to do as well as what they were going to do. The judge also picked up on the fact that the Sweett folk were members of the RICS. The judge seemed impressed and expected old-fashioned professional behaviour. It鈥檚 both a privilege and a burden being a professional; you are easily sued if you fall below the standards expected.

It鈥檚 both a privilege and a burden being a professional; you are easily sued if you fall below the standards expected

Counsel for the developer argued that Sweett鈥檚 contract provided a strict duty to see that the bond was executed - meaning more than merely take reasonable care to arrange for it to be put in place. Well now, let鈥檚 look at the law as to professional services. First, there is what鈥檚 known as the default obligation on professionals; it is limited to taking, and exercise of, reasonable care. Second, it requires special facts or clear language to impose an obligation on a QS, architect, engineer, project manager, stricter than that of reasonable care. Third, that a professional man will not readily be supposed to undertake to achieve a guaranteed result, and fourth, that if he is undertaking with care that which he was instructed to do, he will not readily be found to have warranted to be responsible for a misfortune caused by another.

So, the court then examined the words that were being relied on to see if they could be construed as imposing an obligation on Sweett to ensure the main contractor executed the bond. Counsel for the developer argued the words meant 鈥渆nsure鈥, 鈥渂ut鈥 said the judge, 鈥渢he word 鈥榓rrange鈥 is used鈥 - 鈥渁rrange for the bond to be executed鈥. That鈥檚 not the same as ensure. That meant there was no language enough to impose a special obligation on Sweett. The duty was that 鈥渄efault鈥 rule only. And when the judge looked at how hard Sweett tried to get the main contractor to stump up the cash to the Bondsman Insurance Company and sign up, he was entirely satisfied as to their endeavours. They chased and chased. The contractor simply didn鈥檛 want to fork out the premium. Eventually he simply refused to do it and by now the work was well under way.

What about withholding the 拢100,000 from interim payments to cover the risk? Well, the job itself was going well and promises about the bond had been made by the builder. So it was no failure by Sweett to recommend that type of aggressive action. Sweett had behaved impeccably. Claim dismissed.

Tony Bingham is a barrister and arbitrator at 3 Paper 黑洞社区s, Temple

 

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