Contractors:

According to the Collins English Dictionary, a “contractor” can be “a person or firm that contracts to supply material or labour, especially for building.” [1] Essentially, contractors are professionals who perform work for an individual who will rely on their expertise for a specific task to be completed. This is usually part of a larger project which has various components. Although popularly known to be commonly used in the building and construction industry, contractors can in fact be found in any industry in which specialist work can be conducted.

Because of the reliance placed on a contractor to complete a certain task, that contractor is invested with a unique level of trust be the party retaining him for that particular task. As a professional acting in his field, the contractor will be expected to discharge his duties to a high standard of care. If the contractor performs his work in a manner which causes loss or damage to any third party, that third party can claim against him in an action for professional negligence. Ordinarily, to establish a case in professional negligence, two essential things will need to first be established:

1. The existence of a “duty of care” to the person bringing the suit against the professional; and
2. The breach of the “duty of care”.

Evidence needs to be adduced to establish the breach of the “duty of care”, evidence which proves that the professional did not conduct himself in a manner that should be expected of a professional in his position. As can be seen, an allegation of professional negligence is context dependent. This means that the facts of the matter will need to be carefully assessed before any view can be formed about the likelihood that a court would find for or against the contractor. Legal principles will play an important role as well, but the extent that inferences are drawn from the facts under the law will depend on the standards of conduct expected in the industry in which the contractor is operating.

A professional body within that industry may have such standards drafted into a Code of Ethics or a Code of Conduct. Such documents may outline what the public at large or individual members of the public should expect from a professional. Unfortunately, no such body exists for contractors per se, and therefore there does not appear to be a Code specifically catering for professional contactors. There is a body called Independent Contractors Australia which acts as a representative organisation for contractors.

“ICA has been formed to protect the rights of independent contractors to be treated fairly, justly and equitably in Australia and to be allowed to work free from intimidation or harassment from bureaucrats, the Australian Taxation Office, political parties, unions and others.” [2]

Independent Contractors Australia pursues its objectives through education, networking and lobbying. There does not appear to be a standard of “best practice” that the organisation promotes among its members. It is conceivable that certain requirements of “best practice” may be outlined in the association’s rules, but these are available only to members. Any responsibilities that are placed on members may be inferred from the provisions of those rules, and from this it may be possible to determine the standard of care relevant to a particular industry in which the contractor works.

This does not however mean that there is no such standard. Professional negligence is specific to the industry in which a claim is made. This is because a type of activity that might be common and accepted in one industry may not be acceptable in another. In situations where there is no governing legislative or quasi-legislative instrument to refer to, other things must be considered. These include:

• The contract under which the contractor did the work which is deemed to have been performing negligently;
• Any things that were said between the parties (including the contractor) which may evidence the intentions of the parties or the ultimate objective of the agreement between them;
• Any code of ethics of professional standards in a related industry in which work is being performed; and
• The general law relating to contract and professional negligence.

Claims against contractors may have serious implications, not only for the contractor’s professional reputation but also in terms of any insurance claims that they may be relying on when prosecuted by a third party. This is because an insurance company may claim that the contractor’s actions may fall under an exclusion in the insurance policy. For these reasons, if you are a contractor who has had a claim made against you, it is important that you obtain the right legal advice in relation to the best strategy to defend your position in court.

If on the other hand, you are a person who believes that he has suffered damage or loss as a result of a contactor’s negligence, it is important that you seek the right legal guidance in framing your claim because unsubstantiated accusations can themselves be acts of defamation for which you could be liable. In either case, a legal professional who deals with professional negligence matters will be best placed to pursue your claim or defend an action in this area of litigation.

If you feel you need professional legal advice relating to a dispute involving the alleged negligence of a contractor, you may wish to contact our firm by telephone on (02) 9233 4048 or email us at info@navado.com.au and make an appointment to see one of our solicitors. 

[1] Entry for “contractor” in Collins English Dictionary (William Collins Sons & Co. Ltd, 1979; 2001 ed.) p 326.

[2] “Who or What is ICA?” Independent Contractors Australia (undated) <www.independentcontractors.net.au> (accessed 17 October 2013).

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