Derrybawn House (Ashdrum Lodge t/a Kiernan Homes v Barbouti) [2025] IEHC 522 - Practical guidance for construction consultants, professional indemnity insurers and brokers
This briefing discusses the findings and operational lessons from the recent Derrybawn House High Court decision. For project professionals, their professional indemnity insurers, and brokers, these findings offer clear guidance on risk management and claims defence. Insurers and claims handlers can leverage these lessons to strengthen their approach to PI claims, particularly where allegations relate to supervision, contract administration, or cost control.
Background
The facts of this case are fairly typical of those seen in professional indemnity claims arising from construction work.
This case concerned a dispute over extensive refurbishment and landscaping works at Derrybawn House, Co. Wicklow, a protected structure. The homeowner (Ms. Barbouti) engaged Kiernan Homes as contractor and Gilligan Architects as the project architect, but no formal written building contract was ever signed.
The project scope and costs expanded significantly on an ad hoc basis, with Ms. Barbouti issuing rolling instructions and directly engaging subcontractors.
Key issues included alleged defective works, particularly defective bedding mortar in newly constructed and repaired stone walls, cost overruns, and contract administration failures. Ms. Barbouti dismissed both the contractor and architect before completion, preventing final inspections and resolution of defects.
The court found that most defects were latent and not reasonably discoverable by the architect through periodic visual inspections, and that the client’s actions in excluding professionals from the site were unreasonable, which reduced or extinguished liability for latent (hidden or not reasonably discoverable) defects.
Significantly, liability was only apportioned for patent (visible or obvious) defects and admitted design errors, with the architect not held responsible for latent workmanship issues outside the scope of reasonable inspection.
Key findings and their implications for construction professionals
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Written contracts are essential
A recurring issue in construction disputes is the absence of a formal written contract . This case highlights how lack of documentation can undermine project certainty and risk management.
Although the architect recommended using the standard RIAI contract and attempted to initiate the process, the client did not sign or finalise any written agreements. As a result, the architect’s engagement proceeded on an informal, ad hoc basis, with instructions and scope of appointment evolving over time. The absence of documented payment terms led to confusion over fees, interim certificates, and cost overruns. The architect did not invoice for services until after dismissal, and the client disputed the amounts claimed.
What this means for construction professionals: For architects and consultants, the case demonstrates that informal arrangements can leave professionals exposed to disputes over scope, fees, and liability, and can make it much harder to defend claims. Construction professionals should always insist on a written contract that clearly sets out the scope of services, payment terms, defect liability periods, and dispute resolution mechanisms. If a client refuses, it is essential to document the advice given and the client’s decision, so there is a clear record if issues arise later.
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Architect’s duty of care Is limited
A key area of dispute was the extent of the architect’s duty of care. Without a written contract, the architect’s responsibilities were unclear, but the court found the duty was limited to periodic visual inspections, not continuous supervision or guaranteeing workmanship. The architect was only liable for obvious (patent) defects that could reasonably be seen during site visits, not for hidden (latent) defects. The judgment emphasised that architects should document inspections and escalate concerns, but are not responsible for defects that could not be reasonably discovered.
What this means for construction professionals: Construction professionals should clearly define and communicate the limits of their inspection duties, keep thorough records, and ensure clients understand that the consultant’s role does not include guaranteeing all aspects of workmanship. Construction professionals should take proactive steps to avoid inadvertently assuming strict obligations that are uninsurable under professional indemnity policies. These obligations often arise when a professional is perceived as guaranteeing outcomes rather than exercising reasonable skill and care.
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Cost control and quantity surveyor involvement
The project suffered major cost overruns because there was no formal cost management and the client refused to appoint a quantity surveyor (until much later), despite the architect’s advice. This led to unclear valuations, disputes over payments, and difficulty substantiating claims.
What this means for construction professionals: Construction professionals should always advise clients in writing to appoint a quantity surveyor for complex projects, and document all cost advice and client decisions. Good cost control and clear records protect consultants from disputes and strengthen their defence if claims arise.
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Impact of client conduct
In this case, the client dismissed the contractor and architect before completion, preventing final inspections and defect resolution. The court found this conduct unreasonable and ruled that professionals could not be held liable for latent defects they were unable (due to client obstruction) to inspect or remedy.
What this means for construction professionals: Where construction professionals are excluded from a project, they should document the circumstances and notify their insurers immediately. It is important that clients are advised in writing about the risks of premature termination or exclusion, and its potential prejudicial impact in any future dispute.
Additionally, the construction professional may consider making a claim for any losses or expenses arising from unlawful termination or exclusion, such as costs [incurred due to being prevented from completing services or additional costs required to re-engage or re-inspect the works] for loss of contracts, loss of earnings and remobilization costs.
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Liability apportionment
The court found that liability should be shared based on responsibility for each issue. The architects were only liable for design errors and obvious (patent) defects they could reasonably detect, often splitting responsibility 50/50 with the contractor. For hidden (latent) defects, or where the client’s actions prevented proper inspection, the architect was not held liable.
What this means for construction professionals: The decision highlights the importance of keeping clear records and defining the construction professionals role. Liability will be limited to what can be reasonably inspected and controlled, and this should be shared fairly with other parties involved.
Importantly, the appointment or contract should include a clause requiring that the construction professional is notified and given the opportunity to inspect works before they are covered up. If inspection is then not offered, the cost of opening up works for inspection, regardless of the result of the inspection, should be at the contractor’s expense. This helps ensure the consultant can fulfil its inspection duties and limits exposure to claims for hidden defects.
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Summary for construction professionals
This case reinforces the importance of written contracts, clear scope definition, robust inspection records, and proactive client advice. Construction professionals should focus on documentation, communication, and adherence to professional standards to manage risk and defend against professional indemnity claims.
Key takeaways for professional indemnity insurers and brokers
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Importance of documentation
Clear, comprehensive documentation is the foundation of effective risk management and claims defence in professional indemnity. This case shows that robust records can be decisive in defending claims and clarifying the scope of professional duties.
What insurers and brokers can do:
- Encourage consultants to enter into written contracts, to maintain inspection notes, cost advice, and all client communications.
- Provide training or templates for best-practice recordkeeping.
- Remind policyholders that thorough documentation is essential for defending claims and demonstrating adherence to professional standards.
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Scope of cover
This case highlights the importance of being able to assess liability based on the actual retainer and documented responsibilities. Industry-standard forms of appointment (such as RIAI, ACEI, or bespoke contracts) provide a framework for setting out the consultant’s role, but these should always be tailored to the specific project and client needs. Clear scope definition helps avoid disputes and assists in seeing that professional indemnity cover aligns with actual duties.
What insurers and brokers can do: Insurers and brokers should proactively support consultants in drafting, reviewing, and updating their appointment documents. Regular training, sample clauses, and feedback on engagement letters can help consultants avoid common pitfalls and strengthen their position in the event of a claim. The use of industry-standard forms of appointment should be encouraged, with consultants tailoring these to reflect the specific services, exclusions, and boundaries relevant to each project.
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Uninsurable risks
This case highlights that guaranteeing all aspects of workmanship is a strict obligation and falls outside the scope of professional indemnity insurance. PI policies are designed to cover negligence, not absolute guarantees or warranties of performance.
What insurers and brokers can do:
- Advise consultants to avoid contract terms that guarantee workmanship or outcomes.
- Review appointment documents for strict obligations and flag uninsurable risks.
- Educate policyholders about PI cover limits and help them communicate these boundaries to clients
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Early notification
Prompt notification of potential claims, disputes, or exclusions is crucial for effective claims management and defence. Delays can limit the insurer’s ability to respond, investigate, and support the consultant’s position.
What insurers and brokers can do:
- Remind consultants to notify insurers immediately if they are excluded from a project, face a dispute, or become aware of circumstances that could lead to a claim, and of the importance of capturing all relevant details in order accurately to apprise insurers of the position.
- Provide clear guidance on what events require notification under the PI policy.
Conclusion
This case confirms that consultants are liable only for defects they could reasonably spot, not for hidden issues or strict guarantees. Maintaining robust records, clearly defining the scope of duty, and providing proactive advice remain the best defence. For insurers and brokers, early notification, thorough contract reviews, and educating policyholders on PI boundaries are the best tools for shutting down weak claims and managing risk effectively.
[2025] IEHC 522, Ashdrum Lodge Limited t/a Kiernan Homes v. Aysar Barbouti (and by order, David Gilligan and Gilligan Architects Limited), High Court, Judgment of Ms Justice Siobhán Stack, delivered 21 August 2025.
