A negligent valuer was liable for the loss arising from an overvaluation, but the valuer was not liable for that proportion of the lender’s loss on the loan which was attributable to the fall in the market after the valuation date, even though (i) the lender would not have entered into the transaction but for the valuer’s negligence; (ii) in some of the cases the lender would not even have lent a lesser sum, either because a lesser loan would have fallen outside its lending guidelines or because it would have been of no interest to the borrower; and (iii) adverse market movements were foreseeable.
The lender: ‘deliberately assumed the risk that they might suffer loss as a result of a fall in the property market. They did not rely upon John D Wood’s valuation to protect them against that risk. In these circumstances John D Wood owed no duty to protect BBL from this type of loss.’
and: ‘Where a party is contemplating a commercial venture that involves a number of heads of risk and obtains professional advice in respect of one head of risk before embarking on the venture, I do not see why negligent advice in respect of that head of risk should, in effect, make the adviser the underwriter of the entire venture. More particularly, where the negligent advice relates to the existence or amount of some security against risk in the venture, I do not see why the adviser should be liable for all the consequences of the venture, whether or not the security in question would have protected against them.’
Judges:
Phillips J
Citations:
Ind Summary 04-Apr-1994, Times 07-Mar-1994, [1995] 2 All ER 769
Jurisdiction:
England and Wales
Cited by:
Appeal from – Banque Bruxelles Lambert Sa v Eagle Star Insurance Co Ltd and Others CA 24-Feb-1995
The plaintiffs were mortgagees. The defendants were valuers. The defendants negligently over-valued properties and the plaintiffs then accepted mortgages of the properties. Later the property market collapsed and the various borrowers defaulted and . .
At first instance – South Australia Asset Management Corporation v York Montague Ltd etc HL 24-Jun-1996
Limits of Damages for Negligent Valuations
Damages for negligent valuations are limited to the foreseeable consequences of advice, and do not include losses arising from a general fall in values. Valuation is seldom an exact science, and within a band of figures valuers may differ without . .
Cited – BPE Solicitors and Another v Hughes-Holland (In Substitution for Gabriel) SC 22-Mar-2017
The court was asked what damages are recoverable in a case where (i) but for the negligence of a professional adviser his client would not have embarked on some course of action, but (ii) part or all of the loss which he suffered by doing so arose . .
Lists of cited by and citing cases may be incomplete.
Negligence, Damages
Updated: 21 July 2022; Ref: scu.78173