Mr Robert Lukas
PROFESSIONAL CONDUCT COMMITTEE
In the matter of
Mr Robert Lukas (058730C)
Held on 25 -28 February 2020
Holiday Inn Edinburgh Zoo
132 Corstorphine Rd
Mr Paul Housego (Chair)
Mr Roger Wilson (PCC Architect Member) Mr Steve Neale (PCC Lay Member)
In this case, the ARB is represented by Catriona Watt of Anderson Strathern LLP
Mr Lukas has attended this hearing and is not legally represented.
|The PCC found Mr Lukas guilty of serious professional incompetence (“SPI”) in that he:
(a) carried out a flawed tender process;
The PCC found Mr Lukas guilty of unacceptable professional conduct (“UPC”) in that he:
(a) oversaw and witnessed a regime of substantial and regular cash payments to the contractor in circumstances where the Complainant had queried the method of payment and made regular complaints about a lack of materials on the site and poor workmanship;
In doing so the Committee found Mr Lukas had acted in breach of Standards 1, 2, 4 and 6 of the Architects Code: Standards of Conduct and Practice 2010 (“the Code”).
The sanction imposed is erasure.
1. Mr Lukas (“the Respondent”) was charged by the Architects Registration Board (”the ARB”) with unacceptable professional conduct (“UPC”), and also with serious professional incompetence (“SPI”). The Professional Conduct Committee (“the Committee”) is responsible for deciding whether those allegations are found proved, or not, and if proved what sanction to impose.
2. The matters asserted by the ARB to have occurred and which it is said amount (if proved) to SPI and to UPC are set out below. Because of the dates of the matters alleged, it is the Architects Code 2010 (“the Code”) which applies. The ARB say that Standards 1, 2, 4 and 6 are relevant.
3. The allegation against the Respondent is that he is guilty of
(i) Serious Professional Incompetence in that he:
(a) carried out a flawed tender process;
(b) provided and used an inappropriate contract for the building work;
(c) failed to administer the building contract competently.
(ii) Unacceptable Professional Conduct in that he:
(a) oversaw and witnessed a regime of substantial and regular cash payments to the contractor in circumstances where the complainant had queried the method of payment and made regular complaints about a lack of materials on the site and poor workmanship;
4. The relevant provisions of the Code are:
Honesty and Integrity
You are expected at all times to act with honesty and integrity and to avoid any actions or situations which are inconsistent with your professional obligations. This standard underpins the Code and will be taken to be required in any consideration of your conduct under any of the other standards.
You are expected to be competent to carry out the professional work you undertake to do, and if you engage others to do that work you should ensure that they are competent and adequately supervised.
Competent management of your business
You are expected to have effective systems in place to ensure that your practice is run professionally and that projects are regularly monitored and reviewed.
You should carry out your professional work faithfully and conscientiously and with due regard to relevant technical and professional standards
1. You are expected to carry out your work promptly and with skill and care and in accordance with the terms of your engagement.
2. You should carry out your professional work without undue delay and, so far is reasonably practicable, in accordance with any time-scale and cost limits agreed with your client.
3. You are expected to keep your client informed of the progress of work undertaken on their behalf and of any issue which may significantly affect its quality or cost.
Summary of basis of allegation
5. The Complainant wanted her home extended. The Respondent was her architect. He used a “bespoke” contract between client and contractor which it is said removed almost all liability from him, but which purported to be largely a standard building contract. He did not follow a proper tender process or check on the contractor appointed, whose company had been dissolved, and at the least acquiesced in the payment of many tens of thousands of pounds in cash to the contractor. He drafted his own contract which removed all liability from him, and which gave no support to the Complainant. The work was not done well, he was said not to impartial and it is said that he failed to check up on the work properly, and as contract administrator simply approved the sums the Complainant had agreed to pay to the contractor following his requests for payment.
Burden and standard of proof
6. The ARB is required to prove the allegations to the civil standard; that it is more likely than not that any event occurred. That is a single unwavering standard of proof, though the more unlikely an allegation the more cogent the evidence required to prove it. There is no requirement for the Respondent to prove anything. The Committee has in mind throughout its deliberations that the right to practise a profession is involved in these proceedings and proceeds upon the basis that the Human Rights Act 1998 will apply. In particular the Respondent has the right to a fair trial and to respect for his private and family life under Articles 6 and 8 of the European Convention for the Protection of Human Rights and Fundamental Freedoms, as incorporated within UK law by that Act. The question of whether or not any facts found proved amount to SPI or UPC is a matter for the Committee’s judgment, and there is no burden of proof. SPI requires the facts proved to fall further below professional standards than simple negligence. A finding of UPC requires the Committee to judge that conduct to be serious, to the extent that it carries moral opprobrium.
7. The test for lack of integrity applied by the Committee is as explained in Wingate & Evans -v- SRA and SRA -v- Malins  EWCA Civ 336. Society expects professionals to adhere to their moral and ethical codes and to have higher standards than expected of the general public, and professional integrity is linked to the way that a professional serves his client. A lack of integrity does not require the person to be dishonest.
8. The Respondent attended the hearing, and was not represented, and the Committee made efforts to ensure that the hearing gave him every opportunity to present his defence, including lengthy breaks for him to assess matters as the case was heard, ensuring he was made fully aware of the process, and explaining to him in simple English all relevant legal concepts and principles which would guide the Committee.
9. The contract was “bespoke” and had been used successfully some 500 times over nearly 15 years. The Complainant had agreed to it. It was the Complainant who had agreed all relevant matters with the contractor. Any failings with the work were the contractors, concealed before he inspected. He had never intended to mislead. He had been diligent in his frequency of visits. Either works were simply incomplete or the contractor had not been given the opportunity to put matters right. Any failings of his, and he accepted that all had not gone well, were not so serious as to be SPI or UPC. He had never had problems like this before, in nearly 15 years.
10. The Committee perused the report of ARB’s solicitor with accompanying documents running to almost 900 pages (ARB 1). The solicitor for ARB provided a written submission at the end of the case (ARB 2) and larger prints of pages 84-90 (ARB 3).
The ARB called oral evidence from the Complainant and from the Inquirer, whose report was in ARB 1 (268-319). The Respondent gave evidence, and made submissions to the Committee. He provided a bundle of documents prior to the hearing, of 173 pages (RL 1). On the first day of the hearing he provided a statement in tabular form of responses to the allegations (RL 2) and on the second day of the hearing copies of documents he now uses for the same purpose. (RL 3). The Respondent did not provide a formal witness statement, but relied on a letter to ARB of 24 August 2018 (ARB 1:465), his letter to ARB of 8 February 2019 (ARB 1:296), a letter of 22 November 2018 to ARB (ARB 1:690), his statement of 2 February 2020 (RL 1:158), and his assessment of his case at RL 2.
11. The report set out the ARB case fully. It was inexplicable that any architect could be party to the payment of about £114,000 in cash to a builder. The Respondent had referred to the contractor as “Ltd” but the company through which the individual had traded (that company having the contractor’s name) had been dissolved in 2012: he had put the contractor’s name without “Ltd” in the contract. The way the terms of engagement between him and his client was drafted meant that no one gave any warranty about quality – the builder did not, and the architect purported to pass responsibility to building control, but their certificates expressly disavowed any such warranty. The contract was very one sided, with much responsibly on the Complainant. The work had been very poor indeed, and the cost of undoing what the contractor had done and effecting remedial works meant the cost was at least double £140,000, with several years delay and it was yet not finished. The Complainant had given her evidence in a very straightforward way, but while the Respondent had made some admissions he then qualified them in later answers. The Complainant’s straightforward evidence, backed as it was by substantial contemporaneous evidence should be preferred. These were matters so serious individually and collectively that they were SPI and UPC. The Respondent had broadly agreed with the report of the Inquirer. It was a concern that his current documentation was in many ways worse than that used for the Complainant.
Submissions by the Respondent
12. The Complainant knew what she was doing. The contract was bespoke, was supported by legal advice obtained in 2005/2006 and had worked well in the past. It was the Complainant’s responsibility to satisfy herself about the contract. In so far as the contractor had not done a good job, that was not his responsibility, and nor was he at fault in not seeing the issues, which had been concealed before his visits. The Complainant had signed the documents, and she and her husband had known what they were doing, and made the relevant decisions themselves. It was accepted that there had been problems, and the effect on the Complainant had been movingly expressed, but the issues were at the door of the contractor. Any fault of his, and it was accepted that all had not gone well, was not so serious as to amount to SPI or to UPC.
Findings of fact
13. The Respondent was engaged by the Complainant and her husband as their architect, initially for a modest extension to their home, as their family was growing. It was for two new bedrooms. It became a project to put another floor on their bungalow. The planning took over two years to obtain, and the Complainant formed a relationship of trust with the Respondent.
14. When starting his practice in 2005/2006 the Respondent had created his own “bespoke” building contract for clients to use with contractors (ARB 1:516). He had sought legal advice about it then, and had been told that it was legally enforceable. He wanted as far as possible to remove any liability from his practice for the work it did. He had not sought any advice about the advisability in professional terms about the provisions of this contract. It was said to be based on the Scottish Minor Works Building Contract (“the MW contract”). It greatly diverges from it.
15. It provides that the client will pay interest to the contractor for late payments of 5% per calendar month (which compounded is 79.85% pa) instead of the usual small percentage above the Bank of England’s base lending rate per annum.
16. It provided that any variation from the contract would be a matter for the client and the builder to deal with, would not be within the contract, and would be nothing to do with the architect.
17. It provided that the contractor would indemnify the architect against any claim in respect of defects though work or materials (so passing back to the contractor the cost of any failing by the architect to identify or rectify any such failing).
18. Interim payments are to be made every seven days, not every four weeks.
19. The completion provisions provide that the contractor will complete works to the standard required for the Building Control department to issue a certificate. This removes the obligation on the architect to certify that works are complete. The certificate issued by building control expressly states that it does not warrant or certify the quality of any work carried out. The effect is that no one certifies the contractor’s work is satisfactory.
20. The contract provides that if the client ends it early the client will pay the architect 1% of the cost charged by any other contractor (which really belongs in the contract with the contractor and is not in the MW contract).
21. Any dispute is to be referred for resolution to the architect first. This is not in the MW contract.
22. The Respondent accepted during his oral evidence to the Committee that the Inquirer was correct in saying that these changes were so far reaching that it was misleading to say that it was based on the MW contract. He said that he had not intended to mislead.
23. Since receiving the Inquirer’s report, and by reason of it, the Respondent has amended his standard contract. It still contains all the provisions set out above. The guidance note he now provides to clients (RL3:29-31) tells them that it also removes from the client the ability to claim any damages for late completion. The payments provision has been changed, so that “payment values will be agreed between the contracted parties”. The contract administrator’s role in payments is reduced only to record the payments made. There are no valuations undertaken by the contract administrator. The client is responsible for getting and checking the builder’s insurance details. The client is expected to speak to the builder daily. The document states that it is “absolutely fine” for the client to instruct the builder to depart from approved Building Warrant drawings. An amendment application is likely to be required, and if the client asks, hLp (the Respondent’s firm) can deal with it for them for a separate fee.
24. This new “guidance” from the Respondent’s firm states at the start that “This Contract is based on the JTC Standard Scottish Minor Works Contract [the MW contract] but has been amended by hLp architects to ensure that the Main Contractor takes additional responsibility for his workmanship.” As this departs from the MW contract even more than before, it follows that it is more misleading than the contract used by the Respondent for the Complainant. The amendments are not properly described. These amendments do not ensure additional responsibility on the contractor – which any reader would think was a benefit to the client – but effect removal of any liability to the architect, and the imposition of seriously disadvantageous terms on the client, such as to pay 5% pcm interest.
25. The Respondent’s relationship with the Complainant was based on RIAS standard terms of engagement. This includes the following list of responsibilities:
• advise and agree on form of Building Contract including being Contract Administrator
• assemble tender documentation
• issue tenders to contractors
• take delivery of, and report on tenders
• advise on appointment of contractor
• administer the Contract
• attend progress meetings on site
• inspect the works as necessary to administer the contract, review progress and quality in terms of the building contract.
26. In this case the Respondent deleted sub clause 7.4 (as he always does). That sub clause states that the architect will issue instructions to the contractor for variations to the contract when approved by the client. That ties in with the contract he prepared for the client and the contractor. This sub clause (7.4) is a standard term in a standard list and that list is regarded as the basis of the architect’s role. Additional services are in a separate column on the right of the page. It is almost impossible to conceive of a project for a substantial domestic dwelling which would not involve variations to the contract between client and contractor. That an architect would want not to be involved in variations is incomprehensible. It is part of the Respondent’s fundamental principle of practice that he wishes to avoid the possibility of liability wherever he can. To remove this term is, as the Inquirer pointed out, to remove much of the point of having an architect involved in the execution of a project. The Respondent was unable to explain the rationale for this exclusion. It does not remove liability. Its effect is to remove any need for any change to the fixed tender price to be considered by the Respondent. It is for the client to resolve, even if the variation impacts on the implementation of the project. In his oral evidence the Respondent defended the contract as drafted, but in his closing submissions he said that he had reflected and appreciated that he needed to revisit this.
27. The Respondent provided in RL 2 copies of his notes of meetings about this project. These had not been seen by the ARB or the Complainant, as the Respondent’s practice is not to share his notes of meetings with anyone, and he had not previously divulged these notes to anyone. He advises clients to keep their own notes and gives them a project notebook to do so. One of his notes, dated 17 July 2014 (RL1:100) referred to “£27k + VAT to be agreed for Phase II works. – Contract to be amended…” the Respondent was unable to explain to the Committee how this tallied with the client being required to deal with the contractor direct for any variations to the contract. The Committee found incomprehensible the Respondent’s explanation that there was some difference between “alteration” and “variation”. The Committee also noted the reference to VAT in this note, and comments on this below.
28. The Respondent suggested contractors to the Complainant. One was a builder, xx Builders Ltd. The Respondent sent out plans on A4 to save cost, but also provided a CD with plans for builders to print on A1 if they wished. He asked only for a global sum for the specification he provided. There was no fixed tender date. On receipt of the prices he spoke to the Complainant. He only ever prepared a list of four prices. That of xx Builders was said to be “all inclusive”, meaning no VAT on top. It was of £181,500. This was an extension to a domestic dwelling, of between £169,000 and £189,000 (net of vat) according to the other three tenders. The Respondent did not enquire how it might be possible to quote a figure inclusive of VAT. The figure to be received by that contractor net of VAT, if paid, would be very substantially less than the others, on identical terms (£151,250). The Respondent agreed with the ARB’s solicitor that to accept a quotation markedly lower than all the others almost inevitably led to future problems because it was likely that the contractor would make a substantial loss, and that enquiry would be required. He was not able to offer to the Committee any explanation as to why it was that he made no enquiry of that builder as to how it was “all-inclusive”.
29. The Respondent then discussed these figures with the Complainant. The exact date is not apparent from the Complainant’s records, nor was the Respondent able to say. It appears to be sometime in January 2018. The Respondent then suggested that the Complainant speak to the builders, which she did. Some reductions were then agreed between the Complainant and the contractor. The Respondent then noted the four tender prices (his record was produced to the Inquirer (ARB 1:302), and just has £141,500 against the contractor xx with the sole explanation “with reductions”). It was at no time shown to the Complainant. These were not now tenders on the same terms. At no point did the Respondent ever write to the Complainant about the tender returns or offer, or give, any advice, written or oral. He viewed the selection of the contractor and the negotiation of the contract between Complainant and contractor as entirely a matter for them. He was not involved and did not wish to be so. All he did was to make a note, in the form of a skeletal list of what had been removed from the tender and the amounts by which the cost was reduced, for example “£2k – Ret wall” (RL 1:76/77, 05 February 2014). This is far from the obligations he accepted in his terms of engagement with the Complainant to provide a tender report and advise as to the contractor (ARB 1:207, clauses 6.4 and 6.5). He did not record the extent of the variation to the specification against which there had been lump sum prices offered by all the prospective contractors. There was no correspondence with any contractor about their tenders. The building contract itself was prepared by reference to the original tender drawings with the items omitted listed as 1-14 in an exclusions section (ARB 1:490), with extra matters in another section (ARB 1:491).
30. When submitting the tender package to the contractors on 4 December 2013 (RL1:4) the Respondent sent it to xx Builders Ltd. On 14 May 2014 he sent the contract to the Complainant to sign referring to the contractor as xx Builders Ltd. That company had been dissolved in 2012. The contract itself was with xx Builders: that is with an individual not a company. Despite the Respondent saying that he had worked with this builder before he was unaware of the demise of his limited company. He must have found out when preparing the contract. He was not able to say how or when.
31. The tender letter stated that “It is intended that the Contractor shall enter into a formal “Scottish Minor Works Contract” agreement with the client…”. It was not. It was a “bespoke” contract so heavily amended that it bore little resemblance to the MW contract, as the Respondent accepted in his oral evidence, to the extent that he agreed that it was misleading to say that it was such a contract.
32. It was a contract no client would be well advised to sign. The Respondent did not tell the Complainant to take advice and nor did he advise them it was different to the MW contract, or go through the amendments, saying only that it was “bespoke” and tailored to their circumstances. In his oral evidence the Respondent said that the fact that it was intended to be a MW contract did not mean that it might not be something else when the contract was signed. The Committee did not find this a convincing argument semantically, and unattractive as a defence when it was clear (and accepted) that the Respondent offered his client no advice about the contract and (specifically) did not tell them that it was different to the contract that the tender stated “shall” be entered into by the successful tenderer.
33. The Respondent brought to the hearing his present version of his “bespoke” contract which further departs from the MW contract than the one signed in this case, and yet which his documentation continues to state is based on the MW contract.
34. The building contract that he prepared for his client, and which the Complainant signed, was not of a reasonable standard for reasons identified by the Inquirer (A1:276):
- the section on contractor’s liabilities provided that the contractor indemnified the architect against any defect in construction: which protects the architect if he fails to identify such errors, passing responsibility back to the contractor;
- the section on variations provided that these were to be agreed direct between Complainant and contractor. This is extraordinary. Every such contract involves variations as it is worked through and the architect is central in planning them, costing them and authorising them in Architect’s Instructions. It then went on to state that “Any variation will not form part of this contract”. It would appear that additions were to form separate contracts direct between Complainant and contractor, not involving the architect. That is simply unworkable as such variations are integral to the contracted works. Nor is it possible to imagine how this was to work for removal of items from the contract;
- the interim payments section provided for payments every seven days (it is four weeks in the MW contract) and due within five days not 14. Interest on payments is set at 5% per calendar month, compound, (75.59% pa) instead of simple interest, usually at a few percent per annum above Bank of England base rate.
- the completion certificate section removes all liability for the architect in identifying defects and certifying that they have been made good, by requiring the contractor to compete works to Building Control approval. This exposed the Complainant to risk as the certificate issued by Building Control carries a warning “The acceptance of a completion certificate is no guarantee of standard of workmanship.” The Inquirer pointed out (ARB 1:276) that Building Control no longer issue completion certificates, but a “Notice of Acceptance of Completion Certificate”. It is the client who was to put the certificate in, and would not be competent to do so. Accordingly no one warranted that the work of the contractor was of adequate standard. It is, as the Inquirer pointed out, part of the point of having an architect be the contract administrator that he certifies and values the work done.
35. The contractor asked for payment in cash. This for a contract of £141,500. The reason offered was that the builder told the Complainant that he could get better terms at suppliers. The Committee finds as a fact that the suggestion did not come from the Complainant who was not happy about the prospect, but went along with the Contractor’s demand: The Respondent was told at the beginning, and voiced no objection or concern, or advice. The Complainant would have to go to the bank, and collect up to £20,000 in cash (16 May 2014, ARB 1:91) and hand it in an envelope to the contractor. The bank expressed concerns to her about such large cash payments. She raised this with the Respondent frequently. He gave no advice that this was in any way unusual. He knew, at every two weekly site meeting, that this was how each certified payment was to be made. The Complainant had to ask for some advance notice as the bank told her that they did not keep so much cash as a matter of routine. The Committee accepts the Complainant’s oral evidence that she was raising concerns with the Respondent about this “all the time”. The Complainant became concerned at her personal safety with such large sums in cash. The contractor then agreed that he would drive in his van near to, but not outside the bank. He did not say why he would not park outside the bank. The Complainant would walk the short distance from the bank to his van and hand over the cash in an envelope. She was very uneasy about doing so, saying that it felt like some shady Mafia deal. The Respondent was fully aware of this at all times, and admits that this was so. He accepts that he asked no question about it. His oral evidence was that there were a variety of ways of paying, and cash was one of them. He thought that it was plausible that suppliers might give a discount for cash, not credit. He had not considered that the same effect was obtained if paying by debit card. He found nothing unusual or concerning about paying over £140,000 in cash to a builder.
36. The Respondent accepted that there were no invoices from the contractor for any of the £114,000 or so actually paid to him in cash (ARB 1:408). There was nothing at all from the contractor in writing. The Respondent said that was why it was important that he provided his letters recording what had been paid, described below. If there was no record there could be future disagreement as to how much had been paid: he had precluded any such problem by his letters. He agreed that the letters were not valuations even though they said they were. He saw no issue with the contractor receiving £141,500 in cash with no interim invoice, even for a contract with an “all inclusive” price. He did not check whether the contractor was VAT registered. He made no enquiry of any sort. There was, the Committee finds, a very real risk that the Complainant might be the subject of an allegation of criminal evasion of VAT if it turned out that she had paid in cash £141,500 for work on which VAT was due and not paid (and she actually paid over £114,000). The provision of interim invoices was to be expected, and it makes it worse, not better, that the Respondent provided his “valuations” in place of proper interim invoices from the contractor. The heading of “valuation” also gave false comfort to the Complainant as in fact, as the Respondent accepted, it was no such thing.
37. The way that payments were arranged was that at less than two weekly intervals the builder would contact the Respondent and ask for a lump sum payment, of a fixed round sum amount. The Respondent visited the site at least once a week. He would tell the Complainant about the request. Sometimes she would object by reason of defects or lack of progress. The Respondent would for the most part accept the figure put forward by the builder. Sometimes he would reduce it based on what the Complainant said. The cash was then handed over: The Respondent then prepared a letter on each occasion (518 et seq). Each one commenced “Following construction works progressing diligently and our site inspection on 16.04.14 we confirm that you have made the following payment direct to xx of [address] the sum of TEN THOUSAND POUNDS (£10,000) this valuation…)” There then followed an arithmetic calculation leading to the remaining amount due of the contractual fixed sum. Confusingly, this always included the heading “Agreed variations” even though the contracts expressly excluded any variation.
38. The Respondent accepted that these were not valuations in any sense. They were, he said, a broad holistic assessment of how far through the fixed contract he thought the builder had gone. An architect’s valuation involves the architect assessing the value of the work properly done for which the client should pay, with a retention of a percentage set out in the contract. It is not what occurred here – the receipt by the contract administrator of a bid from the builder for money. He has now changed his documentation so that it no longer refers to a “valuation” and his “guidance note” expressly states that “hLp architects will record the value of payments agreed and paid by the contracted parties. hLp will not value the works but can give advice on how you should ensure that the value of the payment requested covers the work your builder has completed.” This is totally different to Section 5 of the MW contract (726) – 5.3 “the Contract Administrator shall issue an interim certificate of what he considers the total value of work properly executed.” The guidance note says that he will “give advice” on how to make sure that the client does not overpay. This is not reflected in the contract between hLp and the client. It passes responsibility for valuing work to the client. Most clients will have absolutely no idea how to value building works. That is why they pay a contract administrator. This document appears to mean that the Respondent will tell clients how to approach the task but offer no opinion about anything on site in a particular contract. It is a total absence of obligation (and, for this is avowedly the Respondent’s aim,) of responsibility. It leaves the client at the mercy of an unscrupulous contractor, or at the very least precludes them from any independent valuation of the large sums of money they will be paying out. The Committee found it disturbing that the Respondent’s reaction to the allegations he faced and the evidence produced in support of them was to change his procedures so that they are now even more disadvantageous to his clients.
39. The Respondent’s contract in this case (402) stated that “The Architect will instruct the Client to make payments to the Contractor based on the total value of the Contract Works properly executed, including where appropriate the value of any materials and goods on site …” This necessarily involves a valuation and assessment of the quantity and work done. The Respondent says that he took a holistic view of how far the contract had advanced as a proportion of the total contract price. In the usual contract it is the architect who takes the lead. Here the architect was in receipt of a figure requested by the builder which in most cases he approved unless the Complainant objected: when he might reduce it. There was no formal basis of valuation, and no retention. This offers the client no significant protection, nor advice.
40. The Respondent has now amended his documentation to remove any responsibility at all in assessing the value of work, but he views the contract as a matter for the client (and specifically the Complainant) to satisfy themselves (and herself) about. He sees no professional obligation to explain how the terms he proposes and proposed to the Complainant differ very far from the norm, so as to remove as much liability from him as possible. The client comes to the architect as a professional, for advice. That includes unbiased advice on the nature of the contract to be entered into by his client with himself and with the contractor. The Respondent’s clients do not receive such advice.
41. There is no allegation that the Respondent did not attend site regularly. He was there at least once a week. He saw there were failings and he says he asked the contractor to attend to them. He accepted that the Complainant was frequently asking for the gas meter, left standing alone after a wall was demolished, to be made safe (photograph e.g. ARB 1:115), but the contractor would have needed to pay a gas registered engineer to do so, and he never did, over several months (e.g. ARB 1:85). The site was a shambles with debris from the house in a heap in the garden. The Respondent accepted that if a contractor runs an untidy site it is a warning signal, but his defence throughout to the allegation that he failed to administer the contract properly or deal with poor workmanship appropriately was that he told the contractor to attend to matters and then trusted him to do so without inspection. That was completely unsatisfactory. When the contract was terminated and the works opened up, it was clear that there was unsound work to the extent that there was real concern over structural stability of the building. Steels were to be bolted together. Many of the bolts were missing. Others were not tightened. Joist hangers had prepared nail holes. Some had only a very few nails holding them. The contractor said there was a delay for pre prepared roof trusses so said he would build the roof on site. This gave more headroom in the attic so the client said that was acceptable, but the contractor then had not got long enough timbers so used two overlapping timbers held together with a few plasnode nails. The new second floor should have rested on a consistent base, but it sat on joists often with nothing in between supporting it. The Respondent had directed dwangs (noggings in England) between the joists, but they were not there when the works were later opened up. It is not proper performance of an architect’s duty to permit such works to be covered up before inspection. This was not regular progress covered up as work progressed, but a clear direction to remedy a substantial defect which he did not inspect. He should, plainly, have directed that the areas were not to be covered before he inspected them. The legion of problems and defects uncovered are so many and so serious (as detailed in ARB 1:84-90) that it is not conceivable that they are consistent with proper performance of the contract administrator’s role.
42. The Respondent failed to tell the Complainant of a sloping first floor, which the Complainant discovered when the man making the windows said that they needed to be smaller than drawn because the floor level was different. It is now too late to do anything about that, so the Complainant now has a permanently sloping floor.
43. The new upper floor was held up by vertical timbers. The Complainant thought this wrong and said so. The Respondent said these were only temporary and this was not a problem. However after the contract was terminated a structural engineer reported that they were still there and remedial action was needed. Even if there was no vertical load problem there was a potential wind load issue. That the Complainant had raised the issue meant that the Respondent ought to have made sure that this was done properly.
44. There were instances of cost cutting about which the Respondent did little or nothing. The Complainant had made clear that she wanted no MDF, but only timber. There were MDF windowsills and the contractor was installing an MDF staircase when the contract was terminated. The Committee accepted the Complainant’s evidence that when she raised this with the Respondent he said that it did not matter as it would be covered with carpet. That was not an acceptable response. The saving to the contractor was at least a four figure sum. The flat roofed dormers should have had membranes with a minimum 15 year life. The contractor installed felt roofing, with a minimum four year life. The Respondent agreed that he has seen this at the time, but he did nothing about it, and did not tell the Complainant. As it was a roof, she could not be expected to notice this herself, and nor should she be required to do so: that was the contract administrator’s responsibility.
45. The Committee is satisfied that the Complainant raised complaints repeatedly. She has spent many hours preparing a table of what actions she took when, throughout the contract (ARB 1:13-83). The Respondent has provided his own contract notes (RL 1:74-114). These cover the whole period including tender. They do not reveal that issues were dealt with adequately or at all. For example the client was concerned at water ingress. The roof was to be off for only a short period. Although it was May/June, there was seriously inclement weather. On 15 May 2014 the Respondent recorded “Water ingress upstairs. xx to ensure water proof just at the moment”. On 20 May 2014 he recorded that “water ingress ok but some has come in following torrential rain on Sunday”. On 5 June 2014 “Rain has caused ingress to ground floor finishes now damaged…Progress not great”. The Complainant was by now very concerned as the furniture stored there had now got mould on it from persistent damp. None of the Respondent’s notes record him doing anything about it or requiring the contractor to undertake works of rectification. He did go as far as to put “No valuation this week” for example on 12 June 2014 (RL1:96), but on 19 June 2014 he required a £10,000 payment. He accepted in his oral evidence that it was not correct to have written, as he did that this was “Following construction works progressing diligently …” for this was not the case.
46. The Complainant and her husband made their last payment on 4 September 2014, of £10,000 (ARB 1:533). They had become more and more concerned, but heeded the Respondent’s advice that if they did not pay the contractor might walk off the job. They discussed their concerns between themselves at some length. By now the contractor had gone back on his word that he would work on no other job until theirs was finished. The Respondent was the architect on that other project. They decided to end the contractor’s involvement, and did so at a meeting on 27 September 2014 (confusingly recorded in the Respondent’s note dated 26 September 2014, RL 1:111). The Complainant then kept on the Respondent, until the enormity of the problems facing them became apparent.
47. At the time, the Complainant, led by the Respondent, thought that what was left was largely finishing off works. The independent contractor dealing with windows undertook attic conversions and agreed to finish off the work, on day rate terms. That was when the extent of the problems became apparent as every time he started to do something an issue arose. A structural engineer reported that the problem identified by the Complainant about the second floor was substantial as even if the position was as the Respondent described it then, the temporary works had become (wrongly) permanent (and he had not noticed).
48. The matter then became litigious, as the Complainant came to appreciate the extent of the Respondent’s failings (for the Committee finds them to be so). This in part accounts for the time for this matter to reach the Committee. The action taken against the Respondent was settled by his insurers the day before trial for a substantial sum (which the Respondent told the Committee despite its clear direction that this was not information it wished to know). The Complainant has not yet been able fully to fund the rectification works: the extent and effect the very poor workmanship has meant much has had to be redone (so that the cost was more than if the contractor had done nothing at all) and that other matters (such as the sloping floor) are irremediable.
49. Both the Complainant and her husband are by birth German: consistently the Respondent told them “This is how we do things in Scotland. It will turn out fine in the end.” They did not want to come across as difficult. They had never undertaken such a project before. They had come to trust the Respondent though a relationship established over the couple of years it had taken to get the planning permission. They relied on him to get their project to a successful conclusion and on his acquiescence to the payments made in cash to the contractor.
50. The effect on the Complainant and her family has been very serious and distressing for them. The Complainant had three young children and a fourth was born mid-way through this contract. Their increasing family was why they had decided on the project. The cost became so large that they were not able to fund it (and had to rely on financial support from the Complainant’s mother). The Complainant’s husband had to undertake additional project work in addition to his full time role. Fortunately their marriage has survived the enormous strain this placed upon it.
51. In making its findings of fact the Committee preferred the evidence of the Complainant whenever it and that of the Respondent was in conflict. Her evidence was given without hesitation, was supported by the documents she had assembled for the Committee and not contradicted by any of the very few documents the Respondent provided. It was credible and plausible. It was backed up by independent experts such as a structural engineer’s undisputed report. The Respondent’s evidence was of limited admission and exculpation: it was the Complainant’s idea to pay cash. He did not know why, but that was what they agreed without him being there. They signed the contract. They should have taken advice. He had visited frequently. He had worked with the contractor before and it had gone well. It was the Complainant who chose the contractor and agreed the price. He had trusted the contractor to do what he said he would do, when instructed, but the contractor had not done remedial works and just covered up the problems. That was not his fault. His whole business and practice was based on limiting his liability wherever he could, which was why the documents were as they were, but now the Complainant was not happy with her agreements. Her evidence as to the effect on her family was very moving, and upsetting, but that did not make it his fault. He would have to revisit the documents in the light of what he had learned in this hearing.
52. The whole history of the project is a litany of failure, one small example being the substitution of roofing felt for a membrane which he knew about and yet did nothing. All the expert reports (even those of the Respondent) are supportive of the Board’s case. The Complainant’s account is accepted by the Committee to be factually correct in all material particulars. Accordingly ARB has succeeded in proving the facts asserted to the required standard of proof.
53. Having set out a narrative history of events the Committee considers the allegations.
Serious Professional Incompetence in that he:
(a) carried out a flawed tender process;
54. The tender process was seriously flawed as set out by the Inquirer. In his oral evidence the Respondent accepted that it was flawed. There is no suggestion in the allegation that information from one tenderer was fed back to another, but that is the risk a timetable avoids. There was no reason not to obtain the breakdown every tenderer would have prepared. There was no tender report at all. There was only a conversation when prices were given, and then not properly explained – why one was “all-inclusive” – and that because the Respondent seems to have given no thought to the point, or even been aware that it needed consideration. This even though, if VAT was to be paid, the contract was a long way short of the others and that this is a recognised warning sign. The report commissioned by the insurers for the litigation from Hurd Rolland (RL1:118-151 (preliminary), and 152-156, final), concludes that if the evidence of the Complainant is taken at face value it is likely that the standards of the Respondent “fell below the standards to be expected of the ordinarily competent architect to some extent”. The Committee accepted her evidence “at face value”: meaning that on the balance of probabilities it is true.
Accordingly even the Respondent’s own expert does not support his assertions.
(b) provided and used an inappropriate contract for the building work;
55. The contract was inappropriate for all the reasons set out above, which are not repeated.
(c) failed to administer the building contract competently.
56. The extent of the problems in the execution of the contract can lead to no conclusion other than that this is so.
57. The Committee considered whether these failings, either individually or collectively, amount to SPI.
58. Each one of the three alone is serious enough to be (and the Committee finds that they are) SPI.
59. First, the tender process is the foundation of a successful project. This process was nothing like a proper process, at any stage. Even if the Respondent finds that a fixed date leads to contractors not tendering, and has rigid security on tenders (such as not opening them until all are in: not that he did) that still leaves the gaping hole in the action taken about tenders. There was no like for like comparison. The nature of “all inclusive” was not explored. The Respondent absented himself from all negotiation with tenderers, even though his obligations in his contract with the Complainant expressly stated at 6.5 (ARB 1:319) that he would “Advise on appointment of contractor”.
60. Secondly, the building contract with the contractor was highly disadvantageous to the Complainant. The Respondent accepts that it was misleading to state that it was substantially the MW contract, but says that it was not his intention to mislead. That is not the point, for it is seriously incompetent to let a client think that she is signing a standard form of contract, when it most certainly is far from that, and where all the variations are to the detriment of the Respondent’s client. It is seriously incompetent of the Respondent that having put forward such a contract the client is not at the very least advised to take independent advice on it. The Complainant relied on her architect to make sure that she had a contract that was of a reasonable standard, and she had every right to do so. In fact she got a contract that had been drafted so as to limit the liability of the Respondent and his firm in every way he could think of. The contract is largely unworkable in practice where used, as here, in a domestic dwelling extension, because it is likely to be impossible to exclude variations, and even if it were possible that leaves the client bereft of professional help when she would most need it.
61. Nor has the position improved since, for the new documentation remove any possibility of valuation advice or responsibility, and in the guidance note the client is told that the Respondent “will be your representative” throughout the contract. This is highly likely to lead to the client thinking that the Respondent is their champion, and not obliged to act even-handedly between contractor and client. Its statement that departing from the approved drawings (without advice) is “absolutely fine” (RL 3:31) is an invitation to a client to court disaster.
62. Thirdly the litany of failings in this building contract are consistent only with a conclusion that the management of it by the Respondent was so far below the standards to be expected of a competent architect that it is serious professional incompetence. He was on site weekly or more often but did not see, prevent, or have rectified, the many issues shown in the photographs (ARB 1: 761-854). This was a domestic dwelling extension. It is not credible that they were not capable of detection by being covered up by the contractor before weekly visits. Even if they were covered up there are things that should be inspected and the Respondent did not ask for photographs of things he ought to have checked to be taken before they were concealed. The site notes (RL 1:74-117) are scribblings, not proper notes. Nothing was shared with contractor or Complainant. Telling her to keep her own notes is no answer. Her notes (as a lay person) might not be correct. He talked to the contractor without the Complainant present “about technical matters she might not understand and which might worry her”, and without explaining afterwards. This is supportive of her complaint that he was patronising towards her, and the Committee so finds. She is a highly intelligent and coherent person plainly fully able to participate or at the very least be informed after a technical discussion. The comment that an MDF staircase was fine as it would be covered by carpet anyway is another example.
(ii) Unacceptable Professional Conduct in that he:
(a) oversaw and witnessed a regime of substantial and regular cash payments to the contractor in circumstances where the complainant had queried the method of payment and made regular complaints about a lack of materials on the site and poor workmanship;
63. The Respondent fully accepts that he knew all about the cash payments. The Respondent stated in his evidence that the Complainant and the contractor had agreed this between themselves and that the reason given was a credible one. The Committee preferred the evidence of the Complainant as to her querying the method of payment to that of the Respondent who denied that she had done so. The Complainant had made regular complaints about lack of materials on site and poor workmanship. While the Respondent’s inadequate notes make little reference to complaints, the painstaking assembled stream of communication and concern from the Complainant and her husband to the Respondent and to the contractor copied to him (ARB 1:13-83) show that the factual basis of this allegation is fully made out. The Committee’s findings of fact set out why this was so dangerous for the Complainant. It is plainly very serious unacceptable professional conduct.
(b) the actions at (a), above, lacked integrity;
64. The Committee noted with great concern the fact that the Respondent issued his “valuations” to provide a paper trail of payments precisely because the contractor did not issue interim invoices. It is standard procedure to issue interim invoices. The Respondent – who was the contract administrator – never asked for them. No reputable professional would or could be involved in a contract which provided for
£141,500 to be paid in cash under any circumstances, still less with no invoices, and without offering the client any advice. The reliance of the Complainant and her husband on the Respondent is set out in the findings of fact. The contractor received about £114,000 in cash between April and September 2014, with no VAT invoice issued, and without the Respondent raising any concern.
65. Professionals are expected to adhere to moral and ethical standards generally and in particular in the practice of their profession. It is not necessary to engage in sophisticated legal analysis. The Respondent condoned and facilitated the payment by his clients (who in doing so relied on his advice) of a very large amount of money, in cash, handed to the builder about every two weeks, in envelopes, at his request, with no paperwork at all, other than a record made by the Respondent of the individual sums and total paid to the contractor. In doing this, he made no effort to check the status of the contractor, and had not noticed that the contractor’s limited company had been dissolved two years before (but must have been told as he ceased to refer to it as “Ltd” when he prepared the contract but had in the invitation to tender). He made no enquiry as to whether the contractor was VAT registered or not. He must have thought that VAT was due, for that is the clear implication of “all inclusive”. Further his own note of 27 July 2014 (RL 1:100) referred to Phase II at “£27k + vat”. Yet he allowed £114,000 to be paid in cash in lump sums with no invoice. He made no enquiry as to why there was no interim invoice and nor did he request any. He prepared his letters precisely because there was no interim invoice from the contractor, when he well knew that there should be one every time a payment is made, because that it how it should be done.
66. In this hearing the Respondent maintained his position that payment in cash was one of several ways of paying a bill and that he could see that the contractor might get better deals for cash. Given that supplies were not said to be from other than builders’ merchants and that a debit card is as easy a way to buy with cleared funds and not on credit, the only reason a contractor might get a better deal for cash is a reason that is not a proper one. The whole idea of paying for a building contract of £141,500 in cash cries out for great scrutiny. To allow this to be done (and the Committee finds not only to permit, or condone, but to facilitate such a course of action) by a client reliant on the professional for advice – which should have been that it should NOT be done – is most certainly to lack integrity.
67. The possibility of the Complainant being dragged into a reputationally ruinous criminal charge of evading VAT in conjunction with the contractor was a very real one, yet the Respondent was a central part of these payments, in his professional capacity as contract administrator. Even if were the case that the client wanted this (which is not the Committee’s finding of fact) that would not make it any the less a lack of integrity.
(c) failed to act impartially and independently in respect of the complaints of the Complainant regarding the contractor’s poor workmanship throughout the period the contractor was on site.
68. This is found proved factually and to be UPC. For the most part the Respondent took the contractor’s bid for a “valuation” at face value, which is not independent. When he did not it was usually because the Complainant objected after he had asked her to get the money from the bank for the contractor. That reduction means that his original demand was excessive. The contract (ARB 1:402) provided that the Respondent would “instruct” the Complainant to make the payment in the sum he specified, so she had no choice but to pay what he said, and he would largely say what the contractor asked him to say. If she did not pay, the contract he had amended and by which she was bound provided for her to pay 5% interest a month on money not so paid.
69. The case papers are full of examples about the complaints made. Examples are the ingress of damp over the whole period of the contract, the leaving of the gas meter standing alone in the middle of the ground floor, the failure to stop MDF being used, not wood, the issue with the upper floor construction: they are fully detailed in the various reports in the papers before the Committee. At no time did he escalate a dispute or complaint. His very brief project notes (RL 1:74-117) give no hint of any action or even of any issue, apart from 5 June 2014 (RL 1:95) “progress not great”. . The rear garden was said to be a mess, but was said on 12 June 2014 to have been cleared of wood and debris (RL 1:96).
70. The Respondent in his oral evidence told the Committee that he had told the contractor to remedy matters, but that the contractor had not done so on many occasions, or had concealed problems as the work progressed. He said that he had simply not considered doing any more than asking the contractor. When the contractor did not do what he asked, he continued to compel the Complainant to pay large round sums of cash to the contractor.
71. Accordingly the Committee finds the allegations against the Respondent that he is guilty of SPI and of UPC conduct to be proved, and that each and every particular alleged has been proved to the requisite standard.
ARB Submissions on Sanction
72. The issue of sanction was a matter for the Committee, which would be guided by its Sanctions Guidance. A lack of integrity was a serious matter as was the extent and range of the failings found to have occurred. It was also a concern that the Respondent did not display any insight into his failings. There was a concern about public protection and serious entrenched integrity issue, and the Committee may be faced with concern that while proportionality is important, the combination of competence and conduct issues, as found by the Committee, meant that the Committee would have to give serious consideration to the criteria for erasure.
73. The Respondent said (in his evidence and in later submissions) that he has been an architect for very many years and 15 years in his practice and has no previous disciplinary history. There were problems with this project, for which he was very sorry, but it was an isolated case, and the only one of about 500 successful projects. His clients tended to cry with joy not with distress when their projects ended. He had found the Complainant’s evidence of the effect on her very moving. He had learned much from the hearing and would carry this forward and revise his documentation. He provided testimonials from his (life) partner and from three clients. He thought in this case he had taken his eye off the ball. He would reflect carefully on the Committee’s decision as to future practice. There were great constraints on practice in domestic work, with some of which he disagreed, but he accepted that he had to work within them. He hoped the Committee would allow him to continue to practice.
74. The primary purpose of sanctions is not to be punitive (though this may be their effect) but to protect members of the public, to maintain the collective reputation of the profession (and the ARB as its regulator), and to declare and uphold proper standards of conduct and competence. Sanctions also help ensure that the profession better understands the importance of professional standards.
75. The Committee has considered the Sanctions Guidance (“SG”). If it decides to impose a sanction, the Committee commences at the lowest sanction, and only if it decides that sanction is not appropriate does it move to the next level of sanction. Having arrived at a sanction that it is minded to impose the Committee then reviews the next sanction above so as to satisfy itself that this would be too severe a sanction before arriving at a final conclusion. If the Committee decides on a fine, it is limited by the Architects Act 1997 to £2500, for each of the two charges found proved.
76. The Committee considered that a sanction is appropriate because of the need to protect the public and to declare and uphold professional standards.
77. The Committee identified the following mitigating and aggravating factors.
78. The Respondent has no previous finding against him in a professional career of many years. There was in the Respondent’s evidence a degree of empathy with the Complainant, but not before. He has fully engaged with the regulatory process. There is no evidence that the Respondent derived any financial benefit, other than his modest fee.
79. The aggravating factors are that the Respondent’s failings are of great magnitude and are across a large range of different aspects of professional practice. A lack of integrity is particularly serious. The Respondent has little or no insight into his failings. By the way the Respondent dealt with his client the effect was that he deceived them into thinking what he was doing was normal, when it most certainly was not, and was totally unacceptable. The emotional and financial impact on the Complainant and her family was very great and has lasted years.
80. The SG states that where the Committee decides that it is appropriate to impose a sanction in relation to a guilty finding, a reprimand is the lowest sanction that can be applied. If this is considered not appropriate the Committee may impose a penalty order, or suspend an architect from the Register for a fixed period (at the expiry of which period the architect is automatically restored to the Register), or erase an architect from the Register.
81. The SG states that an erasure order may be imposed by the Committee for those offences that are so serious that only a permanent removal from the Register will protect the public and/or the reputation of the profession.
82. The Committee could not impose a suspension for two reasons. First the combination of wide ranging competence and conduct issues made this matter too serious for a suspension. There was a serious entrenched integrity issue. Secondly, at the expiry of a period of suspension an architect was restored to the Register automatically. The Committee considered the danger to the public identified in its decision precluded such an outcome, as it had no confidence that the issues, both of competence and of conduct, would be remedied, so that the danger to the public would remain.
83. Accordingly the circumstances of this case do not meet the criteria for a reprimand, a penalty order or a suspension, because the conduct found proved is fundamentally incompatible with the Respondent remaining registered as an architect, both for competence and conduct reasons, explained below.
84. The public has the right to expect that an architect, if so engaged, will guide them through their project, from initial terms of engagement, through design, to tender, to selection of contractor, in preparing the contract with the contractor, to the inspection of work carried out, so that the client gets a well-built project, and for valuation so that the client does not pay too much, or too early. Save for the drawings he prepared the Respondent has been found wanting at every one of these stages. He has displayed no insight, for once the allegations were laid his response was to alter the documents, but in doing so making matters even worse. He still states that his current building contract is based on the MW contract even though agreeing that it was misleading to say so for his earlier contract. He has shown an entrenched integrity issue, because he still maintains that it is not unsatisfactory to let a client pay vast sums of money in cash to a contractor, and he did not address this issue in his mitigation. The Committee carefully considered the criteria for lesser sanctions, set out in the SG, but concluded that they were not met in this case, and that the protection of the public required the erasure of the Respondent from the Register.
85. The reputation of the profession also requires erasure. It is simply not appropriate to purport to practise as an architect while avoiding all professional responsibility as far as conceivably possible, and to do so while leaving the client in ignorance of the fact that this is not how a professional practises. A professional person is responsible for his or her work. While it is sensible to set clear parameters to responsibility and risk, and to agree those with the client, it is anathema to professional practise to pass responsibility for what that professional does to another, or contractually to accept no responsibility for professional work (such as inspection of building work).
86. Erasure from the Register is permanent, though an application may be made to the ARB for re-entry after no less than two years. The Committee may make a recommendation as to a minimum period of time before such an application should be considered. The Committee recommends that no such application should be considered for three years from today. It is hard to see how the lack of insight such as this can ever be remediated. Presently there is plainly a risk to the public and enormous damage to the reputation of the profession.
87. As he has been erased from the Register the Respondent is not permitted to use the title ‘Architect’ in business or practice (nor any reference to membership or fellowship of RIBA). This Erasure Order will be publicised for a period of five years after the date of sanction, as the Rules provide.