Sub-consultants and who carries the liability

When a planning consultant appoints an ecologist, an acoustician and a transport planner to produce the evidence base for your application, you usually have one contract and four sets of professional obligations. Sub consultant liability planning questions surface at the worst moment: a survey turns out to be wrong, a permission is quashed or a condition cannot be discharged, and the question of who pays becomes urgent.

The answer depends on how the appointments were structured months earlier, and almost nobody checks that at the time.

Nothing here is legal advice. Appointment terms are negotiated documents and the wording controls the outcome, so take advice on anything that matters.

How sub-consulting arrangements are structured

Three structures cover most planning work.

In a direct appointment, you contract separately with each specialist. You hold five contracts, you manage five relationships, and you carry the coordination risk yourself.

In a lead consultant arrangement, you contract with one firm, which sub-contracts the specialist work in its own name. You hold one contract. The lead consultant is responsible to you for the whole output, including the parts it did not produce.

In an introduced or managed arrangement, the lead consultant identifies specialists but you contract with each of them directly. This looks like the second structure and behaves like the first. It is the one that causes the most confusion, because the lead firm issues the invoices, chases the reports and appears to be in charge while having no contractual responsibility for the specialist work at all.

Read the engagement letter to find out which you have. The test is simple: whose name is on the specialist's appointment, and who pays them.

Who you actually have a contract with

Under the doctrine of privity, a contract creates rights and obligations between its parties. Where the ecologist is engaged by your planning consultant, you have no contract with the ecologist and cannot sue on the appointment.

That is not the end of the analysis. Where the lead consultant has taken responsibility for the whole service, its liability to you covers the specialist's failure, and it is then for the lead consultant to recover from its sub-consultant. That chain works well when every link is solvent and insured. It works badly when the lead firm is a two-person practice and the loss is a six-figure one.

A claim in tort for negligent advice is possible in principle, but recovering pure economic loss requires an assumption of responsibility towards you, which is exactly what a reliance letter or a warranty is designed to establish. Relying on tort as a fallback is not a plan.

Warranties and reliance for third parties

Where someone other than the client needs to rely on a report, there are two routes.

A collateral warranty is a separate contract between the consultant and the third party, usually a funder, a purchaser or a tenant, giving that party a direct claim. It is a full contract with its own terms, and consultants negotiate them carefully because each one extends exposure.

A reliance letter is lighter. It confirms that a named party may rely on a specified report as if it had commissioned it, usually subject to the same limitations and caps as the original appointment. For ground investigation and contamination work in particular, reliance is the currency of the transaction, and a report without a reliance addressee is worth considerably less to a buyer or a lender. The point is covered from the technical side in who can carry out a Phase 2 ground investigation.

The Contracts (Rights of Third Parties) Act 1999 allows a contract to confer enforceable rights on a non-party, but most professional appointments expressly exclude it. Check whether yours does before assuming the Act helps.

Two practical rules. Ask for reliance at the point of appointment, when it costs nothing, rather than at the point of sale when it becomes a negotiation. And check the number of reliance addressees permitted, because a limit of two is common and a site may pass through more hands than that.

Novation and its effect

Novation replaces one party to a contract with another, with everyone's agreement. In a design and build procurement the consultants originally appointed by the employer are novated to the contractor, so the contractor takes over the appointment and inherits the relationship.

The effect on liability is the part that surprises people. After novation, the consultant's client is the contractor. The employer usually has no direct contractual route to the consultant unless a collateral warranty or third party rights schedule was put in place at the same time.

For planning evidence this matters where a specialist report underpins a condition that the contractor then has to discharge. If the report is wrong and the employer has novated away its contract without taking a warranty, the employer's remedy runs through the building contract rather than against the author.

Deal with it at the outset. The appointment should contain a novation agreement in an agreed form, and the employer should take a warranty or third party rights on novation. Retrofitting either after the event depends on the consultant's goodwill.

Caps, exclusions and net contribution clauses

Most professional appointments limit liability. Three mechanisms do the work and they interact.

1. A financial cap, often expressed as the lower of a stated sum and the level of professional indemnity insurance available. Check whether it is per claim or in the aggregate.
2. Exclusions, typically of indirect and consequential loss, loss of profit and loss of opportunity. A delay to a scheme is often characterised as consequential loss, which can make the exclusion more significant than the cap.
3. A net contribution clause, which limits the consultant's liability to the share that would be just and equitable for it to pay having regard to the responsibility of others. This is the one to read closely.

A net contribution clause removes the usual position under which concurrent wrongdoers are each liable for the whole loss. Under it, if the acoustician is 40 per cent responsible and the transport planner is 60 per cent, you recover 40 per cent from the acoustician even if the transport planner has dissolved. The risk of an insolvent co-consultant moves from them to you.

Caps expressed as the lower of a sum and the available insurance are weaker than they look, since insurance can be exhausted by earlier claims. A cap of a fixed sum is stronger from the client's side.

Insurance of the sub-consultant

Professional indemnity insurance in this market is written on a claims-made basis. The policy that responds is the one in force when the claim is notified, not the one in force when the work was done.

That produces two exposures. A consultant who allows cover to lapse, or who retires without run-off cover, leaves nothing to claim against however clear the breach. And a policy with an aggregate limit that has already been eroded by other claims may have little left for yours.

Ask for evidence of cover, with the level and whether it is each and every claim or in the aggregate, and ask for it to be maintained for a stated period after completion. Six or twelve years is the usual requirement, matching the limitation period under a simple contract or a deed. Where the specialist is a sole trader, the run-off obligation is the one that matters most and the one most often omitted.

Where you are relying on a reviewer to sign off a draft, the same questions apply. The professional directory is a route to a reviewer, and the insurance and scope questions should be settled before any review starts rather than after.

Questions before signing an appointment

Ask these of the lead consultant, in writing, before the fee is agreed:

• Which parts of the service will be sub-contracted, and to whom?
• Are you responsible to me for the sub-consultants' work, or am I contracting with them directly?
• What is the liability cap, is it per claim or aggregate, and is there a net contribution clause?
• What level of professional indemnity insurance is carried, by you and by each sub-consultant, and for how long will it be maintained?
• Will reliance be granted to a funder or purchaser, and to how many addressees?
• If the appointment is novated, what warranty or third party rights do I retain?

Then ask one more, which is about the work rather than the paper. Who will actually carry out the survey, and are they the person whose experience was put forward at tender? The related question of independence, where the same firm designs the scheme and writes the supporting evidence, is covered in conflicts of interest when your designer writes the reports.

This is general guidance, not legal advice. Check the position with a qualified professional before relying on it. PlanScope provides AI-assisted draft reports for planning applications. Reports should be reviewed before submission. We do not guarantee planning approval. For specialist technical reports, qualified professional input may be required. To see which reports your scheme needs and who should prepare each one, browse the full list.