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Professional negligence can be difficult to prove, in particular proving that a project would have turned out differently if the consultant had not been negligent. We consider in this article the recent case of Russell v Stone (t/a PSP Consultants)  EWHC 831 (TCC) and the importance of causation in professional negligence claims and how this can be proved.
The case involved the construction of the Russells’ new home in Hampstead, London. PSP were appointed as the project manager, contract administrators and quantity surveyors and dealt with the tender of the original contractor, Ibex. Problems with progress arose and the works became delayed and over budget. Eventually Ibex withdrew from the project and later became insolvent. Not long after this, PSP ended their own involvement on the project (on the basis of non-payment of fees).
The project was eventually completed but at a cost of around £1m over budget. This led to the Russells bringing a professional negligence claim against PSP. They alleged that PSP were negligent during the original tender process claiming that if it was not for PSP’s actions, they would not have gone over their budget. The basis of the Russells’ case was that if PSP had properly advised them as to the problems within Ibex’s tender, they would have been properly informed of the risks and been able to reconsider the project.
On the facts, the Court ruled that PSP had not been negligent in their management of the tender process and rejected various claims and allegations made by the Russells in relation to the conduct of PSP.
For PSP to be held to be negligent in respect of Ibex’s tender, there would need to be an obvious error in the tender which PSP ought to have noticed in order for the Russells to claim that Ibex’s tender was too low and that they should have been warned of the risks by PSP. The Russells’ expert witness on quantity surveying put forward the argument that there is always a risk in accepting the lowest offer which the Judge rejected as a “remarkable generalisation”. In this case the tender was in reasonable bounds of the cost plan produced by PSP.
In any event, the Court held that even if PSP had been negligent, the claim would have failed on the issue of causation. Mr Justice Jefford found that even if PSP had been negligent, there was not enough evidence or causative link to prove that PSP had caused loss to the Russells.
The court considered the case of William Clark v Dock St PCT in which the difficulty of establishing causation in professional negligence claims was recognised, with the Judge in that case stating that a key difficulty is proving that things would have turned out differently if the professional had not acted negligently. In Russell, the Court accepted PSP’s assertions that causation of loss does not necessarily follow from a finding of negligence without more.
The Russells had not articulated their case as to what they would have done if PSP warned of a risk of cost overrun apart from stating they would have reconsidered or re-evaluated the project. The Russells needed to prove if they were properly advised by PSP that they would have subsequently acted differently as in line with the case of SAAMCO v York Montague.
Mr Justice Jefford used a hypothetical scenario that if the original specification included gold taps and the Claimants were advised that the project would have cost more than originally stated, the Claimants would have decided not to include the gold taps. In this scenario, if the consultant had negligently failed to advise about increased costs and thus the gold taps remained in the specification, the Claimants could have demonstrated causation in respect of the increased costs of having gold taps.
This case provides an example of how difficult professional negligence claims are to prove. It demonstrates the need for a clear line of causation which shows that if the professional had not been negligent, there would be a different course of events and the parties would have acted differently.