Confronting vistas of liability

John Powell QC writes from Hong Kong on the ever-changing coastline of the international professional negligence scene.

Occasional acquaintance with the world’s major time zone centres – Hong Kong, Tokyo, London and New York – confirms that we live in a world dominated by professionals. Their magnificent multi-storey edifices are the castles and palaces of the present age, proclaiming their influence and power.

‘Professional’ is an acquisitive concept, acquisitive of aspirations and expectations – but also of liabilities. Claims for professional negligence are common. They will become more so – a product of increasing demand for services, specialisation, higher standards and intolerance of bad performance by highly educated societies.

In an architect’s negligence claim arising from a roof collapse, Justice Erle said in 1853: “…if you employ [an architect] about a novel thing… failure may be consistent with skill. The history of all great improvements show failure of those who embark in them.” The claim failed. In contrast Lord Edmund Davies remarked in 1980 (in a claim arising from the collapse of a television transmitter mast) that: “The law requires even pioneers to be prudent.” The claim succeeded.

That contrast summates the revolution in attitudes to professionals when things go wrong. Progress may be traced along a path of achievement from the possible to the probable and to the expected, absent culpable error. Professionals have walked it, confronting new vistas of liability. Thus investment was once perceived as speculation by the rich. Judges were unsympathetic to negligent investment claims. But change the word from investment to savings or pensions. The perspective changes.

The coastline of liability, however, does not constantly erode against professionals. There are also accretions in their favour. Developments relating to scope of duty, causation, loss of chance, contributory negligence, contribution and statutory relief provide succour. The perennial problem is to devise an appropriate policy which does not impose impossibly burdensome and uninsurable liability. Judges strive at proportionality: a negligent professional’s liability in damages should bear a reasonable relationship to his culpability.

Practising overseas as well as in London brings a comparative perspective to familiar problems. Take characterisation of loss. What is the position in a negligent design claim arising from a latent defect discovered a decade after a building is completed, when it materialises into a major danger and necessitates expensive repairs?

Did the owner incur loss on original acquisition (as in negligent valuation cases) or when physical damage occurred, or only on discovering the defects? The Hong Kong Court of Final Appeal recently split 3:2 on the issue [Bank of East Asia Ltd v Tsien Wui Marble Factory Ltd [2000] 1 HKC 1]. One’s perspective sharpens by seeing the 23-storey building in question and contemplating the effect of granite cladding falling on the main street below. May a later purchaser recover the costs of repairing a dangerous defect from the original builder or architect? Canadian and Australian courts permit recovery. The House of Lords has meandered

on the issue, eventually giving a negative answer. Were their Lordships influenced by low-rise suburbia?

Professional negligence (or, more accurately, liability for inadequate services) is enriched by overseas case law, for example Antipodean accountants negligence cases. Emerging is an international common law in this field. The Hong Kong practice of inviting distinguished judges from other jurisdictions (such as Lords Hoffman and Nicholls) to sit in the highest appellate court should be encouraged in the UK.

Hong Kong is a part of China. International arbitration is burgeoning. The speed of determination with impressive analysis of issues, including by mainland Chinese arbitrators, is commendable. I suspect Lord Woolf has noticed this (maybe there is a bit of Genghis Khan in his genes).

On another note, today’s South China Sunday Morning Post contains an article by the chairman of the Hong Kong Bar Association entitled: “It’s unfair to lump solicitors’ fees with silks’ charges.” Is the legal world any different here?