Architect negligent for design that exceeds budget

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Is an architect negligent if their design cannot be built within the client’s  budget?

This is the issue that the court had to consider in the case of Riva Properties Ltd & Others –v- Foster & Partners Ltd.

It involved the renowned architects Foster & Partners who have designed a range of iconic buildings, such as London’s Millennium Bridge.

Mr Dhanoa commissioned Fosters to design a 5 star hotel. The build budget was around £70m.  However, Foster’s design was costed at £195m.

Mr Dhanoa had difficulty funding the project and concluded that it would have to be re-designed. He therefore sued the architects for the £4m professional fees paid to Fosters together with loss of the profits that would have been made if the project had gone ahead.

Fosters alleged that they weren’t  told that there was a budget and it was not their responsibility to ask if there was one

The judge found that they had been told, adding that even if they hadn’t been informed it was a contractual obligation to find out. Budgets are an obvious constraint to any building project and the RIBA Job Book specifically states that cost is a key constraint which must be considered at the outset of a project.

The Court therefore agreed that the architects had been negligent.

The judge allowed the claimant to recover the professional fees they had been spent on the design, but not the loss of profits. It was determined that the funding of the project had been affected by the credit crunch and even if the design had come within the agreed budget, funding would still have been a problem.

This case makes it clear that it is “common sense” for an architect to identify a budget for any project.  Failure to do so (or to design something outside of the budget) is likely to lead to a claim for negligence.

Loss of profits are in principle recoverable, subject to there being any other reasons why the project could not proceed.

If you wish to make a claim for negligence against an architect then speak to solicitor Emma Slade on 0808 139 1606 or email her at [email protected]