Thursday, October 23, 2008

What Liability Does A Quantity Surveyor Have If A Certificate Is Overvalued Or Incorrectly Valued?

The employment of a Quantity Surveyor arises from his appointment by the Employer or by someone authorised on his behalf to make the appointment. The express and implied terms of the appointment govern the rights and obligations of the parties; the express terms are of course the starting point. The GC/Works/5, 1998 and 1999 versions, sets out the duties of the Quantity Surveyor in Annex 3. This Annex, together with the General Conditions of GC/Works/5, comprise the express terms. 

The Supply of Goods and Services Act 1982 provides that a duty to serve the Employer with reasonable care and skill is implied in a contract for the supply of a service where the supplier is acting in the course of a business. Thus, even where the construction professional may have been engaged without reference to any standard form conditions, the duty to act with reasonable care and skill is implied by statute. 

As described in Hudson, generally, an owner under a building or engineering contract will have four main interests which he employs his professional adviser(s) to secure, namely:- 
"a design which is skilful and effective to meet his requirements, including those of amenity, durability and ease of maintenance, reasonable cost and any financial limitations he may impose or make known, and comprehensive, in the sense that no necessary and foreseeable work is omitted; 

obtaining a competitive price for the work from a competent contractor, and the placing of the contract accordingly on terms which afford reasonable protection to the owner's interest both in regard to price and the quality of the work; 

efficient supervision to ensure that the works as carried out conform in detail to the design and the specification, and 

efficient administration of the contract so as to achieve speedy and economical completion of the project." 

Insofar as any act or omission of the construction professional prejudices any of these 
interests, and is due to lack of skill or care on his part, he will be failing in his obligations and will, if a breach of duty is clear, be liable to the Employer for any damage which he may suffer (save, possibly, for pure economic loss). 

The precise degree of care owed by those holding themselves out as specially qualified in a particular trade or profession has been described in a number of different ways. 

It is a question of fact which "appears to us to rest upon this further enquiry, viz: whether other persons exercising the same profession or calling, and being men of experience and skill therein, would or would not have come to the same conclusion as the defendant" (per Tindal C J in Chapman -v- Walton). 

In England, the House of Lords has adopted as definitive, in the case of professional people generally, the following direction to a jury by McNair J:- 

"Where you get a situation which involves the use of some special skill or competence ... the test is the standard of the ordinary skilled man exercising and professing to have that special skill. A man need not possess expert skill ... it is sufficient if he exercises the ordinary skill of the ordinary competent man exercising that particular art." (Bolam -v- Friern Hospital Management Committee) 

"Architects, doctors, engineers, attorneys and others deal in somewhat inexact
sciences and are continually called upon to exercise their skilled judgment in order to anticipate and provide for random factors which are incapable of precise measurement. The indeterminate nature of these factors makes it impossible for professional service people to gauge them with complete accuracy in every instance. Thus, doctors cannot promise that every operation will be successful; a lawyer can never be certain that a contract he drafts is without latent ambiguity; and an architect cannot be certain that his structural design will interact with natural forces as anticipated. Because of the inescapable possibility of error which inheres in these services, the law has traditionally required, not perfect results, but rather that exercise of that skill and judgment which can be reasonably expected from similarly situated professionals ... Until the 
random element is eliminated in the application of architectural sciences, we think it fairer that the purchaser of the architect's services bear the risk of such unforeseeable
difficulties." (City of Mounds View -v- Walijarvi) 

Under GC/Works/5, at Condition 10 (1.10 in the 1999 form) "The Consultant shall perform the Services in accordance with all Statutory requirements and with the reasonable skill, care and diligence of a properly qualified and competent consultant experienced in performing such Services on projects of similar size, scope, timescale
and complexity as the Project." 

Relevant duties of the Quantity Surveyor in relation to the over valuation or incorrect valuation of a certificate include those set out in A3.4.3, A3.4.4 and A3.4.6; in Stage 5, relating to the Contractor's final account, the Quantity Surveyor's obligations are set out in A3.5.1, A3.5.2 and A3.5.3. 

There is a dearth of authority upon the standard(s) of skill or care owed by a Quantity Surveyor to the Employer. Since, however, his task involves very large numbers of arithmetical calculations, it seems that an occasional slip or error may be insufficient to sustain an allegation of professional negligence against him. 

In the case of London School Board -v- Northcroft in 1889 a school board employed a Quantity Surveyor for measuring up buildings of a value of [pounds sterling]12,000 which had been completed. They brought an action against him for negligence in making two clerical errors in the calculations, whereby the board had overpaid two sums, one of [pounds sterling]118 and the other of [pounds sterling]15. It was held that as the Quantity Surveyor had employed a competent skilled clerk who had carried out hundreds of intricate calculations correctly, the Quantity Surveyor was not liable for these two errors. 

Given his professional status and skills, it is argued that a Quantity Surveyor must employ them for the Employer's benefit, should he have an opportunity to do so, even though some other adviser, such as the A/E, must bear the prime responsibility. If he notices defective work while visiting for the purposes of making his valuations, for example, he should bring what he has seen to the A/E's attention, in case the latter has missed it. Considering the high degree of skill professed by Quantity Surveyors in the detail of construction methods, there would seem to be no reason why they should not also be joined as defendants by an Employer where, for example, the defects were so glaring that they should have been seen by them in the course of valuation inspections, as well as by the A/E. 

The mere fact that the mistake in question may be a simple mathematical error will not be sufficient to rebut an allegation of negligence. In Tyrer -v- District Auditor of Monmouthshire there were a number of successful claims against the Quantity Surveyor, including the allegation that the Quantity Surveyor had approved excessive quantities of prices which led to irrecoverable overpayments to the Contractor. There was, in addition, a simple mathematical error in issuing an interim certificate. The Judge found that the error could have happened at any time, but "the obligation was on the appellant to ensure that adequate checks were made". 

To read further articles and papers from Fenwick Elliott, please visit our website - 

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances. 

Ms Victoria Russell 
Fenwick Elliott LLP  


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