The Dangers of Mixing Business and Friendship… Professionals Beware!

31 / 01 / 2018

Burgess v Lejonvarn [2017] EWCA Civ 254

Background

Mrs Lejonvarn, an American qualified architect, was a friend and former neighbour of the Burgesses, who intended to carry out landscaping works in respect of their private garden. In 2013, after negotiations broke down with a garden designer, the Burgesses decided to ask for Mrs Lejonvarn’s assistance with the works, who obliged and secured a contractor to carry out the landscaping. Mrs Lejonvarn remained informally engaged as project manager and designer, although she had agreed not to charge a fee for her services.

Unfortunately, the project had not gone well by July 2013 and the Burgesses replaced Mrs Lejonvarn with the original garden designer. The Burgesses subsequently claimed that much of the work completed during the time of Mrs Lejonvarn’s involvement had been defective and that the increased cost of completing the works (£265,000) should be borne by her.

First Instance Decision

In 2016, the first instance judge decided that, although there had been no contract between the parties (formal or otherwise), Mrs Lejonvarn nevertheless owed the Burgesses a duty of care in tort. The reasoning behind the decision was that “a duty of care extends to the protection against economic loss in respect of both advice and any service in which a special skill is exercised by a professional”, irrespective of whether or not the exercise of that “skill” is intended to be gratuitous.

Appeal

On appeal, Counsel for Mrs Lejonvarn argued that it was not fair, just and reasonable to impose a duty of care where (1) there was no intent to enter into a contract; and (2) neither the builders nor the original garden designer would owe such a duty of care in respect of their works. Additionally, it was argued that an important distinction must be drawn between contractual duties (which require parties to undertake positive obligations) and tortious duties (which are concerned with negative obligations, such as avoiding doing something).

Decision

The appeal was dismissed and the court found that duties equivalent to contractual ones could be imposed on Mrs Lejonvarn since (1) she had provided professional services in a setting which was more than merely informal or social; and (2) she had known that the Burgesses were relying on her to perform those services properly. The court also found that Mrs Lejonvarn, as a professional adviser, had assumed a different scope of responsibility to that of the builders, who were not engaged to provide professional or advisory services. Finally, had the Burgesses engaged the original garden designer to complete the works, such designer would have been contractually responsible for all of the works (including those carried out by the builders), meaning a direct comparison could not be drawn between that hypothetical role and Mrs Lejonvarn’s more limited role in fact.

Practical Tips

This case serves as a reminder to be cautious when asked for professional advice by a friend. Where services are provided in a professional context, it is best practice to document the terms of service (even if services are to be provided free of charge) and to ensure that professional indemnity insurance is in place.