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Cases involving the giving of negligent, but gratuitous advice by professionals do not often frequent the law reports. The giving of gratuitous but negligent advice can give rise to liability and cannot therefore disregarded by the Professional in the performance of his/her duties, or in the procuring of adequate and sufficient professional indemnity cover. This article will be of interest to professionals and professional indemnity insurers.
The court found that it had been impossible to extract from the various written communications between the parties "any clear form of offer or acceptance". In the court's view there was not a sufficient consensus about the broad basis upon which the Defendant was being retained by the Plaintiffs.There had also been no discussion about the fee which was decisive in this respect.
The question therefore was: did the Defendant owe the Plaintiffs a duty of care in tort, as that would remain the sole basis upon which legal liability could arise?
The Court found that :
The Court accordingly gave judgment in favour of the Plaintiffs.
It is useful to quote certain passages from the judgment as they emphasise the importance placed on the element of reliance and underscore the "Cautionary Tale":
"[The defendant] contended that she was only really involved … on an informal basis which had to be seen in the light of the friendship which existed between her and the Plaintiffs. She said she was merely involved as a friend who happened to have a professional background".
"I agree that the provision of services by her was gratuitous in the sense that she only intended to seek specific payment for the second phase once the earthworks element had been completed. But I am clear that the fact that the services were gratuitously provided did not mean that they were informal or social in context. In my judgment the evidence is that the services were all provided in a professional context and on a professional footing".
"Although [the Defendant] denied that the Plaintiffs ever relied on her in respect of the Garden Project, I reject that submission. The Defendant was and, in any event should have been, well aware that the Plaintiffs were relying on her to properly perform those services. The trust they placed in her was manifest."
"And I therefore conclude that the Defendant assumed responsibility to the Plaintiffs for performing professional services in respect of the Garden Project and that they specifically relied on her for that purpose".
"This was not a piece of brief ad hoc advice of the type occasionally proffered by professional people in a less formal context. Instead, the services were provided over a relatively lengthy period of time and involved considerable input and commitment on both sides. They also involved significant commercial expenditure on the part of the Burgesses. It would be wrong to categorise this as akin to a favour given without legal responsibility".
In the South African context, and with reference to the same facts our Courts may have determined that a contract had been concluded, as our Law, unlike the English Law, does not require that there be agreement on the fee (or price) in order to found a contract.
While this judgment is one of an English Court, our Courts would come to the same conclusion were they not able to conclude that a contract had been entered into.
The judgment sounds an important cautionary :
A further and important cautionary is this :