The importance of meeting professional obligations

The judgment handed down in January this year in the case of Phillips Architects Limited v Riklin and another provides a salutary warning and a timely reminder of the obligations of professional consultants to establish in writing the nature and extent of the services they will provide and the fees – and the basis on which they are calculated – charged for those services.

In this case, the architect sued for his fees for his architectural services provided to the defendants in respect of renovations and improvements to the defendants’ investment property, which was also to be their second home. The architect’s original claim, based on hourly rates, amounted to £128,162. This was later limited to £94,430.21, as a percentage charge, but also included a sum for design services. The defendants said that the charges were excessive:  they were based on a construction cost that was too high; and that the services rendered were within the obligations undertaken.

Not only had the defendants had made clear to the architect that they had a budget (which was significantly exceeded) for the works to their property; but also, after the building contractor went into administration, it was found that that there had been overpayments. To cap it all, there was the cost of alternative contractors to complete the works. Pausing here, the court found that the architect had not performed any cost control or certification duties, and that the architect had withdrawn from the project only partially completing work stage K and had not undertaken work stage L.

The  court found that the architect had not complied with his professional obligation under the Architects Code of Conduct to record the terms of his retainer in writing as to (among other things) the scope of the work he was to do and the fee or the method of calculating it.

The court then had to decide the reasonable value of the professional services provided. The expert evidence of both sides agreed that the services the architect agreed to provide were the full suite of services of the RIBA. The court found that the defendants required the architect to provide on site supervision of the contractor, and that the architect had assured the defendants that there was no need for an independent project manager.  

The experts also agreed that value of the services should be calculated on a percentage of the contract price. The RIBA scale current in 2007, the date of the claim was the 2004 version, and the court used this version in relation to the assessment of a lump sum fee and in the apportionment of any stages properly completed.

The judge took the view that, in the absence of any certification and project management which led to a lessening of the value of the work actually undertaken, there had to be a significant reduction in the percentage fee. As regards the construction costs, the judge adopted the defendants’ expert’s view “that where there is no architect’s input there should be no architect’s benefit”, so the construction cost against which the percentage was applied was considerably less than the out turn cost.

In relation to the claim for the extra fee on a time charge basis for landscaping services, in the course of the hearing the architect accepted that this should be taken as part of the overall architectural full service.   

We have now come to the end of this cautionary tale, and it only remains to say that there was a counterclaim, which succeeded in recovering a larger sum than that awarded to the architect. If the architect had fulfilled his professional obligations in the first place by setting out in writing the work he was to undertake and the fees he was going to charge then the outcome may have been quite different.