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26 February 2016

Giving friendly advice free of charge: are you at risk?

Many professionals are willing to use their skills to help out their friends - without a contract in place. In a recent case, Ms Lejonvam, an architect, offered two long-standing friends free project management services to assist with landscaping works at their £5 million home. In doing so she was found to have owed her friends a duty of care, the negligent discharge of which led to a claim for £265,000 being brought against her.

What happened?

At a preliminary hearing in January, Mr Alexander Nissen QC held that the architect owed her former friends a duty of care even though:

  • she had made no charge for her services'
  • no contract had been entered into; and 
  • there was a history of previous dealings whereby the claimants had helped the architect and her husband without charge in relation to personal and business matters.

Following some protracted and ultimately defective works undertaken by a contractor sourced and overseen by Ms Lejonvam, the claimants brought a claim for damages on the basis that she hadn't properly supervised the contractor and had failed to control costs.

The court's conclusion

The claimants argued that emails between the parties, together with Ms Lejonvam's presence and conduct on site at the start of the works, constituted a contract. However, Ms Lejonvam successfully argued that there was no contract as there had been no formal offer and acceptance of any defined terms, nor was there ever any intention to form contractual relations.

Ms Lejonvam was less successful, however, in her argument that no duty of care had arisen. Mr Nissen QC found that Ms Lejonvam did owe a duty of care to exercise reasonable skill and care when acting as an architect and project manager on the basis that:

  • Ms Lejonvam had acted as more than simply a conduit between the claimants and the contractor;
  • Ms Lejonvam had gone further than providing that brief ad hoc advice which is often proffered by a professional to a friend in a more informal context; and
  • if those services for which she had assumed responsibility and upon which the claimants relied were performed negligently, then it was right that a remedy should be available to the claimants who had consequently suffered loss, such protection extending to claims for pure economic loss.

The moral of the story

The judge described this case as "something of a cautionary tale".

It may seem obvious, but the benefits of a well drafted contract are clear. No matter what the size or deemed complexity of a project at the outset, or whether services are being offered gratuitously, a contract protects the interest of both parties and provides a framework within which works can be clearly defined, agreed and completed.

A good contract will be proportionate to the work - no need for war and peace each time - and free from ambiguity not only in relation to the works to be carried out and expected roles and responsibilities, but also what steps the parties agree to take should things not go to plan; a much easier conversation to have whilst relations are still good.

If a professional is simply offering some friendly advice, and a contract would be inappropriate, then it would be prudent to tactfully record that the advice is given without liability.

This article was written by Laura Marchant.

For more information, please contact Laura on +44 (0)1483 252 622 or