PROFESSIONAL NEGLIGENCE IN CONSTRUCTION INDUSTRY

Abstract

Construction industry is complex as construction projects involve a multitude of parties with diverse interests. Given such complexity, not all relationships and interests of these parties are protected by way of contracts. For example, in a traditional construction contract, the developer will enter into two separate contracts with the Architect and the main contractor. There will be no contractual relationship between the architect and the contractor. However, the architect’s performance under the contract will have a bearing on the contractor. Thus, in the absence of a contract, if the contractor suffers some loss due to negligent action of the architect, it is reasonable that he has a cause of action. Law of tort provides this. This research explores the actions and the extent of such actions that can be taken by the parties affected by the negligence of the construction industry professionals. An action in tort is more difficult because the injured party has to establish that the party alleged to have caused the damage owed a duty of care towards the injured party and that this duty has been breached. Further, if the party is seeking the recovery for pure economic loss, it will be even more difficult to convince the courts that the negligent professional owe a duty in preventing pure economic loss. This dissertation explores the legal development in the United Kingdom, Australia and Singapore on the treatment of pure economic loss, and how the courts in Australia and Singapore have departed from the United Kingdom’s position; allowing recovery of pure economic loss. The dissertation will also provide an analysis of the single test developed by Singapore courts that could be applied to tort cases.