Burgess v Lejonvarn – Architect Vindicated but at What Cost?

Disproportionate Costs

I have been involved over some 7 years as architect expert witness in a litigation which has been heard twice in the Technology and Construction Court and twice in the Court of Appeal. The case has been the subject of many publications ranging from tabloids to the legal press. The case set and then modified precedents on a professional’s liability for negligence in tort. In January 2020, Lord Justice Coulson summarised it an example of a construction case “with echoes of the bad old days”, when construction litigation “was a byword for expense and delay, and where the costs were often out of all proportion to the sums at stake”.

Expert Evidence

Although the expert evidence has not featured significantly in the written commentaries on the case, it was material to the outcome. ArchiFACT’s client, Mrs Basia Lejonvarn, a Netherlands registered architect, was the defendant. She appointed us in good time, allowing me to judge the quality of the work by inspecting it. All others’ expert testimony on matters of architecture and build quality was limited to document studies.

After the architect experts’ joint statement was close to completion, the claimants directed the architect expert witnesses to confine themselves to a discussion of the duties and standards required of architects and project managers and how those standards applied to the project, rather than to address, as we had, each particular as set out in the claim. The Court of Appeal had already defined such duties and standards in relation to this case. Its conclusion was that, in what she did, the defendant should have exercised reasonable skill and care but that she had no duty to undertake any task.

Consequently, in my view, our discussions ought to have been limited to opining on the competence with which the defendant performed that which she did – not to considering what architects / project managers might have done. An example of the questions the claimants wished us to address was; “What would the relevant standard of care have required, in relation to the Garden Project, in relation to the manner in which site visits or inspections ought to have been carried out”. The court had already decreed that she was not obliged to carry out any inspection. The question sought to resurrect, through the architectural expert witnesses’ testimony, issues which the appeal court had ruled out. While I can understand the claimants’ wish not to be bound by the court’s ruling, I did not think it appropriate for the claimants to try to do this by way of directing expert testimony.

After some debate a compromise was agreed. The architect experts were directed to complete their joint statement dealing with the pleaded issues and to prepare a further joint statement dealing with claimant’s directions to the experts. This delayed the finalisation of joint statements, which, if issued earlier, might have encouraged settlement before trial.

It was claimed that the built work contained defects and deviations from the design due to the defendant’s negligence in project management, design and supervision and that it would never have been commissioned but for the defendant’s negligent budgeting. This last lead to a global claim. The other items were better particularised but appeared to overlap with the global claim. All was addressed by the architect expert witnesses.

The claims that the work was defective because of the defendant’s negligence in design and inspection were wonderfully intricate. Much extracting from contemporaneous documents, legal precedent and codes of practice, etc had been woven into an elaborate tapestry of culpability. In court this unravelled in the face of straightforward expert testimony and an impartial analysis of the facts. In cross-examination, I was taken through the claimants’ propositions of what architect / project manager might have been expected to do and how non-performance thereof might be detrimental to the project. All to no avail. I had inspected the relevant parts of the built work. No faults requiring intervention by an architect were apparent. What matters hypothetical questions over what an architect should have drawn and inspected if nothing went wrong as a consequence of what she did or did not do? In addition, the architect expert witnesses did not support the allegation that the defendant undertook periodic inspections or that her ‘survey’ drawings were design details.

The claims of negligent inspections and design failed.

I confirmed to the court that the building cost budget distinguished: the elements which were priced by the builder, those which were provisional estimates and those which were contingent on client input. Following this the court was not persuaded that the budget was negligently prepared (or in fact wrong).

While none of this was reviewed in the press, on the internet, etc., appointing competent experts in good time was, in the view of the defendant’s team, fundamental. The result of so doing may best be summarised in the defendant’s own words.

“I was extremely fortunate to have found Mr. Evans and ArchiFACT early on in a litigation process that culminated in Mr Evans acting as Expert Witness in the TCC in 2018. Not only was Mr. Evans thorough and diligent in his initial reporting on site, his observations and analysis precise and detailed, he was also able to offer in crystal clarity his depth of knowledge, experience and insight to the final report. On the witness stand, Mr. Evans demonstrated his expertise with such gravitas that nothing was left in dispute. …”

Garden as left after the project team were dismissed

Part of the finished garden terracing

Indemnity Costs

Following a successful outcome in the TCC in 2018 in which the defendant was awarded cost on the standard basis, I was invited to attend the Court of Appeal in 2020. The court addressed the arguably inequitable rules on cost awards which so far had left the architect, although fully vindicated, substantially out of pocket. On 6 February 2020, the Court handed down its judgment in favour of ArchiFACT’s client Mrs Basia Lejonvarn on the issue of indemnity costs.

In addressing the application for indemnity costs, the Court of Appeal reviewed three distinct issues:

Whether the claimants’ pursuit of what were said to be “speculative, weak, opportunistic or thin claims” could properly be described as out of the norm such as to warrant indemnity costs,
Whether their failures to accept or subsequently beat the defendants Part 36 offer, made at a very early stage in the proceedings, meant that an order for indemnity costs was warranted and
The relevance, if any, of an approved costs budget.

On the first issue, the Court referred to the judgement in the same dispute in the Court of Appeal on 7 April 2017. The outcome of this April Judgment had so damaged the claimants’ case that they subsequently advanced; “a wholly new and inconsistent case” described later as “thoroughly unmeritorious”, “wholly unsupported” and lacking “credibility and conviction”. In February 2020 the Appeal Court found the claims, put after the April judgement, were so speculative, weak or thin that reasonable Claimants should have realised they should no longer be pursued. The court noted that the claimants’ two Part 36 offers made after the April court of appeal judgement (one of which was for one fifth of their original claim), were “eloquent testimony… that all that really mattered now was costs”.

On the second issue, the court noted that when proceedings were commenced against the defendant, confident she had done nothing wrong, she made a “sensible and proportionate” Part 36 offer. The reasons for this were to (a) avoid the stress of litigation, and (b) protect herself in relation to costs. The claimants unreasonably rejected this, choosing to pursue litigation (costing many hundreds of thousands of pounds) and won nothing. In these circumstances, the claimants’ failure to accept or beat the defendant’s Part 36 offer was enough to bring the case ‘out of the norm’ because a reasonable claimant would have concluded that the offer represented a better outcome than the likely outcome at trial.

This is significant because under the Civil Procedure Rules, litigants are not treated equally in respect of part 36 offers. A claimant beating its Part 36 offer gets indemnity costs automatically, an enhanced rate of interest on costs, an enhanced rate of interest on damages, and an additional sum of up to 10% of the sum awarded (with a cap of £75,000). It is not the same for defendants who, if they beat their Part 36 offer, are not automatically entitled to indemnity costs, etc.

On the issue of the costs budget, no clear costs management order with an approved costs budget was found. In any event, there is, as a matter of principle, no overlap between a costs budget and the actual costs to be assessed by reference to the indemnity basis.

The effect of the order requiring payment of costs on the indemnity basis is to disapply the requirement that, in addition to costs being reasonably incurred, they should also be proportionate to the sums and issues at stake in the litigation. Also, in the event of the assessment judge having a doubt as to whether or not an item of cost has been incurred reasonably, the benefit of such doubt should go to the receiving rather than the paying party.

Garden after completion

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