The Civil Division of the Court of Appeal handed down judgment in the case of Robinson v P E Jones Contractors Ltd [2011] EWCA Civ 9 on 18th January 2011. The appellant had entered into an agreement with the respondent contractor to build a house, an annex to that agreement containing a number of building conditions, including that the purchaser was to have no liability for any defect, error or omission in the completion of the work, aside from that applicable under the contract itself. In September 2004, a surveyor engaged by the appellant found that the flue runs had not been constructed in accordance with good building practice or in accordance with the Building Regulations in force at the time when the house was constructed.

The appellant was out of time to claim against the contractor for breach of contract but a claim in tort might be possible based on the date of discovery of the defect under Section 14A of the Limitation Act 1980. The crucial question, arising, therefore, was whether the contractor owed a duty of care in tort to the homeowner for economic loss.

Jackson LJ, giving the leading judgment, analysed conflicting case law from the Technology and Construction Court, finding that the relationship between client and contractor was primarily governed by the contract between those two parties. A duty of care in tort could arise but, unless there was an assumption of responsibility, the duty would only extend, under section 2(1) of the Unfair Contract Terms Act 1977, to taking reasonable care to protect the client against personal injury or damage to other property, and would exclude damage to the house itself. in order to ascertain whether the contractor or sub-contractor “assumed responsibility” to its counter-parties, so as to give rise to duties identified in Hedley Byrne and Co Ltd v Heller and Partners Ltd [1964] AC 465, it was necessary to look at the relationship and the dealings between the parties.

The parties here had entered into a normal contract, the defendant’s warranties of quality and the claimant’s remedies in the event of breach of warranty being set out. The parties were not in a professional relationship whereby, for example, the claimant was paying the defendant to give advice or to prepare reports or plans upon which the claimant would act. It would therefore be inconsistent with the whole scheme of the contract if the law were to impose upon the defendant duties of care in tort far exceeding the defendant’s contractual liabilities.

Stanley Burnton LJ, concurring, held that it must now be regarded as settled law that the builder/vendor of a building did not by reason of his contract to construct or to complete the building assume any liability in the tort of negligence in relation to defects in the building giving rise to purely economic loss.

The Court thus dismissed the appeal.