Loss Prevention Alerts

Loss Prevention Alert No 12 - CONSULTANTS' ADVICE

This loss prevention alert has been produced by the Loss Prevention Working Group (LPWG) of the AGS.  It highlights issues that the LPWG considers may be of relevance to members.  It is not intended to provide a definitive response to any issues and before taking action members should consider carefully whether they need to seek independent legal advice.

Summary

The case of Holbeck Hall Hotels and Another v. Scarborough Borough Council demonstrates that although consultants may give negligent advice, they will not be liable unless their negligence causes the damage complained of.

Facts of the Case - Holbeck Hall Hotel Ltd and Another v. Scarborough Borough Council

Holbeck Hall was four-star hotel standing 65 metres above sea level on South Cliff, Scarborough which looked out over an expanse of lawn to panoramic views of the North Sea.  Between the grounds of the hotel and the sea lay an area of land owned by Scarborough Borough Council (SBC).  There was evidence of land slips and collapses along this stretch of coastline for many years.  SBC recognised the need for site investigation to establish the best form of remedial action to be taken.  To this end, SBC accepted a tender from Geotechnical Engineering (Northern) Ltd (GEN) to carry out the investigation and to submit a report outlining their recommendations.

The report submitted by GEN suggested that further investigation would be prudent before designing remedial measures.

While SBC did carry out some remedial works on the site, they did not follow any of the recommendations outlined in the report by GEN.  A massive land-slip later occurred in four stages, taking with it the lawn and the entire seaward wing of the hotel.  The rest of the hotel was unsafe and had to be demolished.

Held

The Court of Appeal allowed SBC's appeal and held that a duty of care was owed by a servant landowner who had actual or presumed knowledge of a danger or loss of support.  That duty, however, depended on forseeability and SBC had not foreseen the magnitude of the risk and would not have done so without the expert evidence derived from a geological survey.  The duty might only extend to warning the owner of the dominant land of the foreseen risk and did not necessarily require preventative work.

In a parallel action, SBC claimed that GEN had been negligent in carrying out a site investigation and report.  The judge, though holding that there was negligence on the part of GEN, however dismissed the claim on the basis that the negligence was not the cause of SBC's liability to Holbeck.

Comment

The unusual feature of this case is that the hazard existed on both sides of the boundary.  Holbeck Hotel argued that because SBC occupied land downhill from them, SBC owed them a duty of care to ensure that they would suffer no damage as a result of any land slippage on their side of the boundary.

SBC's duty of care was dependant on foreseeability and recommendations presented by GEN suggesting further investigation should be carried out to assess the full scope of potential hazards.

GEN's report was deemed to be unclear.  One of the causes for finding GEN negligent was that their recommendations were not expressed in firm or positive terms.  Another was that the scope of their report was limited.  However, this did not automatically mean that GEN were liable for SBC's actions.

SBC were left in the position of knowing they needed to take remedial action however they had no way of assessing the extremity or the time-scale of any landslip occurring.  In other words they could not foresee the risk, even with the benefit of a consultant's report, and therefore could not be expected to provide the measured duty of care expected.

Consultants need to be aware that although they may have only been contracted to carry out a preliminary investigation and report of their findings, they could still be involved in subsequent litigation even if their advice has not been followed.  This case highlights the fact that causation needs to be proved before a consultant is deemed liable for negligence.

Reference

Holbeck Hall Hotel Ltd and Another v. Scarborough Borough Council
Court of Appeal, 22nd February 2000.

Prepared for the Members of the AGS by Steven Francis, DLA

Date of Issue: 7 December 2000