This article was first published on Practical Law's Construction Blog.
In recent years there has been increasing interest as to whether construction professionals need to produce an end design that is fit for purpose or simply to show that they exercised reasonable skill and care. The Court of Appeal’s decision to overturn the first instance judgment in MT Hojgaard v Eon (and the first instance decision of Coulson J in MW High Tech v Haase), dampened the excitement somewhat by emphasising the orthodox position that, absent something really quite categorical in the terms, it is the standard of reasonable skill and care that applies.
If construction professionals (and their insurers) gave a sigh of relief at those decisions, then they might want a stiff drink before reading any further.
Passing largely unnoticed in the construction world, there has been a landmark decision of the Supreme Court that signals a significant shift in how the courts approach the question of reasonable skill and care. The reason it has received almost no attention in construction circles is because it concerned a case of clinical negligence. Until recently, it may have been thought that it would have little or no impact outside of that specialist sphere. I don’t think we can be so complacent any longer.
The story starts with what we all thought the law still was. Every professional negligence lawyer will tell you that you need to apply the Bolam test: did the professional act in a manner accepted as proper by a competent body of professional opinion? (Bolam v Friern Hospital). That test derived from a clinical negligence case.
However, it turns out that the law of clinical negligence has moved on.
Montgomery v Lanarkshire Health Board
In Montgomery v Lanarkshire Health Board, the Supreme Court had to consider a claim by Mrs Montgomery that her doctor had failed to warn her, a diabetic, about the risk that diabetics often have larger babies. In a very small number of cases there can be complications at birth leading to such serious conditions for the baby as cerebral palsy, which, tragically, was the outcome on this occasion. The doctor had considered (correctly) that the risk was very small and the greater risk was to raise the concern, resulting in the patient electing to have a caesarean, which came with its own risks.
Crucially, the doctor’s position was accepted as proper by a responsible body of medical opinion and so, applying the Bolam test, there was no negligence.
The Supreme Court reviewed the existing law and found it to be wanting. Instead, they applied what has come to be known as a “test of materiality”. The question was:#
“… whether, in the circumstances of the particular case, a reasonable person in the patient’s position would be likely to attach a significant risk, or the doctor is or should be aware that the particular patent would be likely to attach significance to it.”
In other words, the test of a professional’s duty would not be measured by whether they met the standard expected by their esteemed colleagues, but would, instead, be decided by focusing on the reasonable expectations of their client.
Montgomery approach is benchmark in clinical negligence
Since 2015, the Montgomery approach has been established as the new benchmark for measuring the adequacy of medical advice in clinical negligence claims. It was not long, however, before the first skirmishes began to appear outside of the confines of clinical negligence cases.
Montgomery approach expands to solicitor’s negligence
The initial foray came from Northern Ireland.
In Baird v Hasings, the Court of Appeal of Northern Ireland was looking at a solicitor’s negligence case in relation to a failure to advise in relation to a particular risk. One expert said that the risk should have been raised and, unsurprisingly, the other expert disagreed, arguing that the risk was so obvious that it needed no comment.
At both first instance and on appeal, the courts found the solicitor to be negligent, but the Court of Appeal expressly referred to Montgomery and noted that:
“The doctor/patient relationship is not a full or true analogue of a solicitor/client relationship since the therapeutic duties owed by a doctor to a patient raises different questions from those arising between a solicitor and client. However, a solicitor is bound to take reasonable care to ensure that the client understands the material risks that arise in any transaction which the client has asked the solicitor to handle on his behalf. As in the doctor/patient relationship the test of materiality is whether a reasonable client would be likely to attach significance to the risks arising which should be reasonably foreseeable to the competent solicitor. As in the medical context, the advisory role of the solicitor must involve proper communication and dialogue with the client.”
It was not long before the English courts took note.
Montgomery applied to a financial advisor
In the 2016 case of O’Hare v Coutts, Kerr J was considering the obligations of a financial advisor. He rejected a submission that the Montgomery test should be confined to cases of clinical negligence, albeit that a duty akin to that test would probably have been applied by virtue of the financial regulatory schemes.
The point was mentioned in passing by HHJ Moulder (sitting as a High Court judge) in Healey v Shoosmiths  EWHC 1723, but more substantively by HHJ Havelock-Allan QC in the Mercantile Court case of Thomas v Triodos Bank. The context was once again that of financial advice and, once again, the regulations provided the substantive answer; there had been a breach. However, the judge went on to comment, obiter, that:
“However, in case of doubt as to how far a bank should go in providing information in response to questions from the customer about a product in a non-advised transaction, I would resort to the test of materiality in the Montgomery case. The question to be asked is: would a reasonable person, in the position of the customer, be likely to attach significance to that piece of information?”
So, where does that leave us?
On the one hand, there does not seem to be any case outside the context of clinical negligence where the Montgomery test has been applied so as to achieve a different result to that which would have been achieved under Bolam. I am not aware of any case within the construction sphere at all.
However, based upon the courts’ approach since Montgomery, I think it is inevitable that the test will shortly make an appearance in the construction professional setting. While I can see a legitimate argument that the point should be limited to medical cases, closely linked to concepts of “informed consent”, there has, as yet, been no appetite to confine the new approach to the peculiarities of the doctor/patient relationship and it clearly reflects a wider cultural shift away from a more paternalistic and towards a more “consumer focused” approach.
Engineers and architects would be well advised to consider carefully what level of advice they need to provide in relation to potential risks, by reference to what their client would reasonably view as significant, rather than by reference to any recognisable body of their professional peers.