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Reasonable skill and care vs fitness for purpose - what is the difference?

27 June 2014

One of the most important terms in any designer's appointment is the standard to which it must carry out its services.

In the absence of any express clause, the law implies that a professional consultant must carry out its services using the reasonable skill and care of a competent professional designer. This is commonly 'amplified' by an express term to make the standard specific to the size and complexity of the project in question.

In either case, to demonstrate a breach, an employer would need to show that the designer was negligent.

Contrast that with fitness for purpose. This is the standard implied on design and build contractors in the absence of an express term to the contrary. Here the contractor effectively guarantees the design will meet the employer's requirements. If the requirements are not achieved, even without negligence, the contractor will be in breach.

Unsurprisingly, designers are reluctant to agree fitness for purpose obligations and their  professional indemnity cover rarely extends beyond reasonable skill and care. The difference between the standards and the risk to designers was highlighted in the recent case of MT Højgaard (MTH) v E.On. [1]

The Case

E.On engaged MTH for the design, fabrication and installation of the foundations for 60 wind turbine generators in the Solway Firth.

The contract contained, in separate parts of the documentation, two material clauses regarding design liability. The first provided that MTH carry out the design using reasonable skill and care. The second was an obligation on MTH to ensure a design life of 20 years.

The works were found to be defective. MTH however, was not negligent - they had followed an international standard referred to in the contract which was subsequently found to contain an error. The question for the court was whether, having exercised reasonable skill and care, MTH would still be liable because the design life did not last 20 years.

The court held that MTH was liable. Irrespective of the obligation to exercise reasonable skill and care, the design life clause was clear. The court reasoned that absolute obligations and obligations to exercise reasonable skill and care were not necessarily incompatible and in this instance they could co-exist.

Steven Carey, Partner in our Construction, Engineering & Projects team, commented:

"The lesson here for designers is to take care when negotiating terms. Fitness for purpose obligations are not always obvious and designers must ensure they are identified. An obligation to exercise reasonable skill and care will not necessarily displace an express absolute obligation."

[1] MT Højgaard A/s v E.On Climate and Renewables & Others [2014] EWHC 1088 (TCC)

This article was written by Christopher Busaileh. 

For more information please contact Christopher on +44 (0)20 7427 4546 or christopher.busaileh@crsblaw.com.