The case of (1) Beattie Passive Norse Limited and (2) NPS Property Consultants Limited v Canham Consulting Limited  EWHC 1116 (TCC) highlights the crucial importance of factual causation in claims of professional negligence against construction professionals.
It is a reminder of never to overlook and fail to analyse properly this key aspect of negligence claims, both when pursuing such claims and when defending them. This case proves it can sometimes make all the difference to the outcome of claims.
Beattie Passive Norse Limited (BPN) and NPS Property Consultants Limited (NPS), a shareholder of BPN, appointed Canham Consulting Limited (Canham), to act as the consulting engineer in designing the foundations of two PassivHaus blocks (Blocks A and B) of terraced housing in Burwash, Sussex. Canham designed the foundations for both blocks, and BNP and NPS brought a professional negligence claim against Canham in respect of those designs. They alleged that the designs of the foundations were defective and led to the need to demolish and rebuild both blocks. They sought to recover the sum of £3.7 million for the total cost of demolishing and rebuilding, as well as for other consequential losses.
The foundation works were performed by Foxdown Engineering Ltd (Foxdown) in September 2014, acting as groundwork sub-contractors. Foxdown was engaged by Beattie Passive Construction Ltd (Beattie Construction), the company responsible for the construction.
Canham produced two sets of design drawings for the foundations, Revisions A and B, and provided these to BPN. However, Beattie Construction did not provide Foxdown with the Revision B foundation drawings; instead Foxdown was only provided with the Revision A drawings issued to them “for construction”. These superseded Revision A drawings, which had shallower depths and smaller dimensions for the foundation pads, were used by Foxdown for both blocks.
It was accepted by Canham’s structural engineering expert that there were negligent aspects to Canham’s design. In particular, there was a failure to include dowel connections between pads and beams, an error that existed in both the Revision A and B drawings.
During the construction phase it was discovered that both blocks had both defective sub-structures and superstructures. A decision was made in May 2016 to demolish Block A, which was carried out in July 2016. Remedial works had already begun in May 2016 on Block B to remedy the foundation issue arising from the missing dowels, but due to the further severe defects with the superstructure identified during the demolition of Block A, a decision was made to stop the remedial work and demolish Block B as well.
Whilst effectively admitting a negligent error over the missing dowels, Canham’s defence largely focused on arguing that: (i) the foundations had not been constructed in accordance with the Revision B design that they had prepared, and (ii) the two blocks constructed by Beattie Construction were woefully defective in other respects and would have had to be demolished in any event notwithstanding Canham’s negligence. As part of this defence, Canham argued that the ‘dowels defect’ could have been remedied without the need for demolition, and in fact remedial works had already begun. This issue of factual causation was thus at the core of this case.
The Court found that, whilst Canham’s designs were negligent, they were not the cause of the demolition. The effect of Foxdown constructing Block A to the wrong revision of Canham’s drawings meant that the foundations were far shallower than Canham’s final design (as contained in the Revision B drawings). This combined with the other widespread construction defects (which were unrelated to Canham) was the real cause of demolition, not Canham’s error over the dowels.
For Block B, by what the Judge described as a “fortunate coincidence”, even though the wrong Revision A drawings were used, the foundations were to the correct depth. This only left the “dowel issue”. However, limited remedial works would have remedied this. The cost of this work would have been in the region of £4,000 and was in fact partially undertaken by the claimants, before the decision to demolish was taken.
The Court held that the true cause of the demolition of Block B was the failures by Beattie Construction during the construction of both blocks. There were widespread failures caused by them (unrelated to Canham), which resulted in the demolition of Block A and the subsequent uncovering of more “catastrophic” defects, ultimately leading to the decision to demolish Block B as well.
Therefore, the Court held that the only remedial works for which Canham was responsible were those works in fact performed to Block B to retrofit the dowel connections. This work was started, but not completed. The breaches by Canham were not an effective cause of the decision to demolish Block B, nor were they an effective cause of the decision to demolish Block A.
BPN was therefore only entitled to recover the sum of £2,000 in respect of the remedial works to Block B that were performed prior to the decision to demolish that block, as the breaches by Canham were an effective cause of that loss only. This was drastically lower than the £3.7 million claimed and is a salutary example of a professional negligence claim very largely failing on the question of factual causation.
On a wider and more practical point, it also reinforces for defendants the importance of (where possible) having a presence on site when a claimant is investigating or conducting any remedial works, as a means of collating and recording evidence of any additional issues or defects encountered. This may open the door to potential causation defences of the type successfully argued in this case.
This article has been co-written with Shaan Mehra, a trainee solicitor in the Construction and Infrastructure team.