2 South West Building & Construction SOUTH WEST
June-July 2011
BUILDING & CONSTRUCTION
Tavistock Newspapers Ltd, 14 Brook Street, Tavistock, Devon, PL19 0HE. Tel: 01822 613666 Fax: 01822 618222
INSIDE THIS ISSUE
■ Aspects of Construction - Page 4 ■ Bradfords opens new branch - Page 6 ■ Tamar Trading - Page 8 ■ Focus on Exeter and Crediton - Page 16 ■ Tinhay Building Supplies - Page 20 ■ Business to business - Page 23 ■ Cornwall in focus - Page 24 ■ Environment Topics - Page 26
CAPTION FOR FRONT PAGE PICTURES: News and information from the businesses on the front cover is featured in this issue of South West Building & Construction magazine.
Quote of the month
‘
Celebrity is the new religion - Writer Martin Amis
Dispute over fees STEPHEN
HOMER
Stephen Homer, a former chairman of the CIC South West (Devon & Cornwall), discusses a recent case.
How you can contact us
EDITORIAL Editor: Paul White
Main contributor: Andrew Townsend Paul White Communications
PO Box 40, Callington, PL18 9WB ADVERTISING:
Judith Jewell Tel/Fax 01837 658941 E-mail
judithjewell@btinternet.com
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THE case of Michael Phillips Architects Ltd v Riklin and another involved a dispute over architect’s fees in which the court had to consider the appropriate approach to calculating the ‘reasonable’ fees payable where a dispute had arisen due to the failures of the architect, Michael Phillips Architects Ltd (MPAL), throughout a project. The facts of this case were that the Riklins engaged MPAL to assist with the renovation and refurbishment of a Grade II listed property. The Riklins requested that MPAL provide a project manager and assist in selecting a contractor. MPAL’s director Michael Phillips was also the director of Lowe E Life Ltd, another director of which had his own construction company, Rimus Ltd. As a result, MPAL recommended Rimus as the contractor. However, four months after starting the works, Rimus went into liquidation. It was alleged that MPAL must have been aware of Rimus’s financial problems when making the recommendation. Further, MPAL failed to
execute a formal professional appointment with the Riklins or to agree whether its fees were chargeable on an hourly or lump sum basis. This was contrary to the requirements of the Architects Registration Board. Following difficulties on the project, including delay and the liquidation of Rimus, whom the Riklins had overpaid by £80,000, a dispute arose between the parties in terms of MPAL’s fees. Following non-payment by the
Riklins and prior to trial, MPAL engaged a debt collection agency to recover the sums due. MPAL brought a claim for the sum of £94,430.21 from the Riklins who were in turn counterclaiming, which included a claim for £15,000 of damage caused to Mr Riklin’s car by debt collection agents employed by MPAL. The court awarded £48,353 to
MPAL for services rendered. However, the court then awarded damages of £58,880.98 to the Riklins. The court considered the following questions: how should a reasonable fee be assessed?; what was a reasonable percentage rate?; and what contract price figure should be used? An expert for MPAL took the approach that each separate element of the duties performed should be looked at in turn and then the relevant fees should be apportioned. However, the Riklins’ expert said that the whole of the services performed should be assessed and MPAL’s failures should impact on the whole fee. The court favoured the latter approach and decided that the reasonable percentage rate was 12%, but then deducted 25% from this to account for MPAL’s deficiencies in providing its services. In addition to this, the court held MPAL vicariously liable for the actions of its debt collection agency, despite MPAL being unaware of the debt collection methods employed. This case further underlines the importance of adequately recording any agreement in writing. I can be contacted at
s.homer@ashfords.co.uk.
South West Building & Construction Magazine
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DISCLAIMER: The CIC SW (Devon & Cornwall) will not accept any responsibility for any loss occasional to any person acting or refraining from action as a result of the material included in this publication.
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