Case studies

Background

A main contractor operating under a D&C contract was alleged to have produced a defective structural design for a commercial development. The insured's PI insurer instructed us to investigate liability and quantify the remediation cost.

Issues

The central issue was whether the design failure fell within the scope of the insured's professional obligations under the contract, or whether it arose from a change instruction issued by the employer. We reviewed the contract, the design development record, and the site correspondence in detail.

Outcome

Our investigation established that the employer's change instruction had materially altered the design brief after the insured's original design had been approved. Liability was contested on that basis. The claim settled at a figure significantly below the initial demand following our quantum assessment and strategic advice to the instructing insurer.

Background

A surveyor was instructed to carry out a HomeBuyer Report on a residential property. Following purchase, the buyer alleged that the surveyor had failed to identify and report on a number of significant defects, including damp penetration, roof deterioration, and defective drainage. We were instructed by the insurer to investigate the scope of the survey obligation and assess the loss.

Issues

The central question was whether each alleged defect was visible and reportable at the time of inspection, or whether it was latent and therefore outside the scope of a HomeBuyer Report. We reviewed the survey report, the RICS guidance applicable at the date of inspection, and the subsequent building surveys and contractor reports obtained by the buyer. We also considered whether the buyer had relied on the survey or had obtained independent advice before exchange.

Outcome

Our investigation established that two of the five alleged defects were visible at the date of inspection and should have been reported. The remaining three were latent or had developed after the survey. Liability was conceded on a partial basis. We assessed quantum by reference to the reasonable remediation cost of the two reportable defects only, which was substantially less than the buyer's global claim. The matter settled within the reserve we had recommended.

Background

An architect was alleged to have failed to advise a residential developer of a material planning risk associated with a proposed scheme. The developer proceeded on the basis of the architect's advice and suffered loss when planning permission was refused.

Issues

We investigated the scope of the architect's retainer, the advice given at each stage of the planning process, and whether a competent architect in the same position would have identified and communicated the risk. We also examined the developer's own knowledge of the planning position.

Outcome

Our investigation found that the risk had been identified in correspondence but not adequately communicated in terms that the developer could act upon. Liability was conceded on a partial basis. We assessed quantum by reference to the developer's wasted costs and the diminution in value of the site, and the claim settled within the reserve we had recommended.

Background

A professional services firm suffered an uninsured PI claim after its broker failed to renew its PI policy on the correct basis. The firm brought a claim against the broker. We were instructed by the broker's insurer to investigate the circumstances of the placement failure and assess the loss.

Issues

The investigation required us to consider both the broker's conduct — whether the failure to renew on the correct basis fell below the standard of a competent broker — and the underlying PI claim that the firm had faced, in order to assess what loss had actually been caused by the broker's error.

Outcome

We established that the broker had failed to obtain adequate run-off cover following a change in the firm's business activities, and that this failure had caused the firm's loss. Our quantum assessment of the underlying claim — which required us to investigate the firm's own professional liability — formed the basis of the settlement, which was agreed at a figure within our recommended reserve.

Background

A structural engineer was alleged to have produced defective calculations for a residential development, resulting in structural movement and remediation costs. We were instructed by the insurer to investigate liability and quantum.

Issues

The technical issues centred on whether the engineer's calculations had complied with the applicable British Standards and whether any departure had caused the movement complained of. We engaged with the claimant's expert evidence and produced our own assessment of the remediation scope and cost.

Outcome

Our investigation identified that the structural movement had multiple causes, only one of which was attributable to the engineer's design. We apportioned liability accordingly and produced a quantum assessment that reduced the claimed remediation cost by approximately 35% by reference to betterment and the contribution of other causes. The claim settled on the basis of our apportioned figure.

Background

A buyer alleged that an estate agent had made material misrepresentations about the income profile of a commercial property, inducing a purchase at an inflated price. We were instructed by the agent's insurer to investigate the representations made and assess the loss.

Issues

We reviewed the particulars of sale, the agent's file, and the buyer's due diligence record. The central issue was whether the representations were made by the agent or derived from information provided by the vendor, and whether the buyer had relied on them or had conducted independent verification.

Outcome

Our investigation established that the income figures had been provided by the vendor and passed on by the agent without independent verification, but that the buyer's solicitors had been put on notice of the need to verify the figures during the transaction. Contributory negligence was argued on that basis. The claim settled at a reduced figure reflecting the buyer's contribution to their own loss.