A party in breach of a contractual obligation may also be
liable in tort. A claim for defective
works or services in construction cases, might be framed as:
·
a breach of contract (the obligations agreed
between the parties); and
·
as a tort,
which imposes liability for acts of negligence.
Liability in tort may arise separately but will sit
alongside a contractual right (hence concurrent).
A claim in tort may (in some circumstances) have the
advantage of a longer limitation period.
The rules of causation and recoverability of certain types of loss may
also be better for the claimant. So a
claimant may have good reason to pursue a claim in tort as well as one in
contract.
Successive judgments delivered in the QB and in the TCC have
grappled with the application of concurrent liability. More recently, the courts have in a number of
cases restricted the ability of parties to rely on concurrent tortious duties
in establishing a claim, especially in construction disputes.
The Court of Appeal has followed this trend in a recent claim
against a firm of solicitors. It ruled in favour of Withers (the firm in
question). Withers had been instructed
to draw up an agreement on admission of new partners to an LLP. The court said
that the rules for recoverability of damage in tortious claims, which in in
some regards are broader than in contract, are to be limited to the contractual
position when concurrent liability is brought into pleadings.
The court emphasised that on entering into a contract, the parties
have an opportunity to assess whether there are special circumstances for
recoverability. The remoteness test in
contract is “was this loss in reasonable contemplation of the parties at the
time the contract was made”? The court
assumed that parties contract on the basis that their liability will be
restricted to damage of such kind that is in their reasonable contemplation. In
the court’s reasoning, the parties have the opportunity to regulate their legal
affairs and that should not be upset by imposing a greater burden on them than
they have bargained for.
Contractors, consultants and their insurers will welcome
this reassurance as to the level of loss recoverable in tort where there is a
concurrent claim in contract.
