New controversial court fees for monetary claims will come into place on 9th March 2015.…
Most professionals have, at some point, been asked for some free advice as a favour. This case demonstrates the possible pitfalls with doing so, albeit with a relatively happy outcome for the professional in question.
The Defendant in this case, Ms Lejonvarn, was an architect and former friend of the Claimants, Mr and Mrs Burgess. The Burgesses were looking to landscape their garden and Ms Lejonvarn assisted on some elements of design and project management. The Burgesses became unhappy with Ms Lejonvarn’s work and she withdrew from the project. The Burgesses subsequently sued Ms Lejonvarn for breach of contract and negligence.
The preliminary issues
The first hearing in this case was on the preliminary issues, which were as follows:
- Was there a contract between the Claimants and the Defendant?
- If so, what were its terms?
- Did the Defendant owe a duty of care to the Claimants?
- If so, what was the nature and extent of her duty?
- Was a budget of £130,000 discussed and if so when?
The High Court found that no contract existed but the Defendant did owe a duty of care to the Claimants in relation to her acting as an architect and project manager for the garden works. It was also found that the budget had been discussed previously.
The Defendant appealed in relation to the duty of care and was largely unsuccessful, save that the Court of Appeal clarified that Mrs Lejonvarn could only be responsible for negligence in the case of services she provided but not for any omissions. Essentially, Mrs Lejonvarn was under no obligation to provide any services, but when she did so she had to exercise reasonable skill and care.
The substantive hearing and costs
At the substantive hearing of this case, the Court found that the Defendant had actually only provided a relatively small number of services to the Claimant. More importantly, the Defendant was found to have acted with reasonable skill and care in providing those services.
This was not the end of the matter. Having failed to win their claim, the Burgesses were now liable to Mrs Lejonvarn for her costs incurred in defending the claim. These were substantial- the dispute began in 2013, court proceedings were issued in 2015 and the matter was not resolved until 2020. Compounding matters was Mrs Lejonvarn’s offer to settle the case for £25,000 in 2015, shortly after proceedings were issued. Following a further appeal, this resulted in Mrs Lejonvarn being awarded indemnity costs from May 2017 (shortly after the first appeal). This means that when deciding the costs to be paid, the court would resolve any doubts as to whether they were reasonable in favour of Mrs Lejonvarn. The Court of Appeal even went so far as to suggest that the Burgesses continued this claim as long as they did in order to punish Mrs Lejonvarn.
As set out above, the pitfalls of free advice are numerous. If there is a dispute, even when the work has been carried out correctly, the time and money that will be spent defending a claim will be significant. Here, Mrs Lejonvarn’s costs totalled over £700,000. Even in cases where costs are recovered from the opponent there is often a shortfall that will need to be paid.
Field Overell LLP have a wealth of experience in civil litigation matters. If you have a matter you wish to discuss please contact our offices on 024 7622 5034