Arrogant professionals

The case of Riva Properties v Foster & Partners concerned a successful professional negligence claim against the world-renowned architects, Foster & Partners.  It is a cautionary tale of the consequences of failing to follow a client’s instructions. Whilst the case concerns architects, it is applicable to professional advisers of any specialism. 

Riva Properties had instructed Foster & Partners to design an iconic 5* hotel at a site near Heathrow Airport in 2007, to be opened in time for the 2012 London Olympics.  Riva’s director, Mr Dhanoa, informed Fosters that he had a budget of £100 million.  Fosters assured him that they would be able to engineer the scheme within that budget and Riva subsequently obtained planning permission.
It turned out that Fosters’ complex design would cost in excess of £195 million and that there was no prospect of engineering the scheme down to £100 million.  The scheme therefore fell through and Riva sued Fosters for the £4 million that they had incurred in professional fees and the £16 million loss of profit.  Fosters denied that they had provided any binding assurance that the scheme could be completed within a budget of £100 million.  
The Court agreed with Riva and held that Fosters had failed to comply with its contractual duties of care and skill.  The Court held that Fosters were liable to Riva for the professional fees that had been incurred.   
What sets this case apart from other high profile negligence cases is the Judge’s finding that Foster’s breaches of duty were the direct result of the very low regard in which they held their client.  The Judge found that Fosters considered Mr Dhanoa to be “beneath them as a client”.  It was clear from the outset that Fosters held him in low esteem with various witness statements making express reference to the initial client meeting at Mr Dhanoa’s “semi-detached house in Hayes”, suggesting that Mr Dhanoa was not a client of a suitable calibre.
Nevertheless, Fosters were happy to take Mr Dhanoa’s money and to accept the instruction as his architect.  The Foster’s low opinion of Mr Dhanoa was also evident in their defence of his claim.  The strategy in their defence appeared to be based on attacking Mr Dhanoa’s credibility as a businessman and describing him as treating the litigation as a “game of high stakes poker”.  The attempted character assassination in Fosters’ witness statements was evident in the descriptions of Mr Dhanoa as being “out of his depth”, as being subservient to his wife, and as being a previous bankrupt with a rather cavalier attitude to business. 
This strategy backfired.  The Judge was extremely critical of Fosters’ conduct and their defence to the claim.  A number of the witnesses were described as “extraordinarily enthusiastic… to twist the facts”. 
Salutary lessons for all professionals concerned.
If you have any questions about this article please contact Andrew Turner on 01242 586841 or email him here. 

This article features in the Hughes Paddison Spring 2018 Property Disputes Update. You can view a summary of the full content of the newsletter and download a copy here.