No.10 - Costain Ltd v Charles Haswell & Partners Ltd

Ten cases every consulting engineer should know

Costain Ltd v Charles Haswell & Partners Ltd [2009] EWHC 3140 (TCC) 

In summary

This case illustrates how a contractor may be able to claim damages for costs incurred as a result of a consultant’s negligent advice, but only to the extent that causation and loss can be proved.

Facts:

Costain had been invited to tender for the design and construction of water treatment works.  They appointed CHP to carry out the civil engineering design work required, including the design of foundations for the structures.

CHP recommended conventional foundations after surcharging the soil following ground treatment works. Costain submitted its tender incorporating CHP’s recommendations and subsequently won the contract. 

Following commencement of the works CHP produced a settlement analysis report and then advised that piled foundations were in fact preferred over conventional foundations.  CHP went on to provide new designs for piled foundations.  Costain duly installed these and went on to claim compensation from CHP for a number of its losses.  They alleged that since the ground treatment works had failed CHP had breached of its duty of care in having recommended them. 

Costain also claimed that CHP’s design had been defective and failed to work, hence the reason why it had to be abandoned and replaced with piled foundations, causing additional costs and delay to the works.

CHP contended that the parties had not agreed a binding contract because the parties had failed to reach agreement as to all of the essential terms of the appointment. 

The court held that: 

The parties had entered into a binding contract because CHP had in fact agreed to provide all of the services required by Costain. 

CHP was liable to Costain but only in respect of some of the damages claimed.

CHP had breached its duty to exercise reasonable skill and care in a number of respects during the pre-tender period by failing to recommend piled foundations from the outset.  In respect of the post-tender period, Costain had clearly shown that the surcharging scheme designed by CHP had failed to produce its intended result. 

Costain was entitled to recover a sum in respect of the materials laid as part of the ground treatment works and a sum for additional earthworks testing which had been caused by CHP’s negligent advice. 

Costain was also entitled to recover a sum for the cost of piled foundations which should have been recommended by CHP at the outset, although Costain recovered less here than they had claimed.   The damages awarded to Costain were limited to the sum which the court found would have been included within the tender had CHP advised that piling would be necessary.  That sum was less than the actual costs incurred by Costain in carrying out the piling works. 

The claim for prolongation costs was found to be significantly flawed because it was based on the delay up to the stage when the foundations were finished rather than when the project reached completion.   It had therefore not taken into account other events which may have reduced the delay.