Can claims consultants be liable for deficient legal advice?

The world of construction disputes is not only occupied by arbitrators, adjudicators and lawyers, but also encompass claims consultants. Claims consultants come with a myriad of backgrounds and experience. Some claims consultants would be legally qualified, others emanate from QS or engineering backgrounds, and yet others may have previously been trainers or may not even have any prior construction or legal experience.

However, like it or not, once a claims consultant sets up shop, he/she will be giving legal advice. This is because he/she will be advising companies on their rights and entitlement to claims, perhaps even represent the said companies in CIPAA and arbitration proceedings.

What happens when these claims consultants render deficient legal advice? Can they be held liable? Or would the Courts consider the fact that these consultants are not in fact lawyers, and hence companies who choose to take legal advice from claims consultants have only themselves to blame, in other words, caveat emptor?

In Cambridgeshire Construction Ltd v Nottingham Consultants, the plaintiff retained a firm of claims consultants to advice them on their contract. The final certificate was issued to the plaintiff, and by the terms of the contract, any dispute on the final certificate had to be raised within 30 days, otherwise the certificate is deemed final and conclusive. The claims consultants advised the plaintiff of the need to serve a notice of arbitration on the very last day, and consequently, the plaintiff ran out of time to serve its notice of arbitration.

The Court held that a company which engages a claims consultant is well entitled to rely on the claims consultant’s expertise, and therefore, the standard duty to exercise reasonable skill and care is applicable to the claims consultant.

It seems to be a decision that is only fair. After all, claims consultants do in fact give legal advice, and hence, they ought to be held responsible for the advice given. Of course, whether the fact that they give legal advice is in breach of the Malaysian Legal Profession Act would be a topic for another day and another time.

Kheng Hoe Advocates is a construction law firm in Malaysia. We advice clients on CIPAA, arbitration, litigation and mediation of construction disputes. We can be reached at khenghoe@khenghoe.com. 

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