Verdict will see damage claims curtailed
The courts have limited valuers' duty of care, in a decision that will help insurers cut claims.
There have been fears that the current property boom will leave valuers and their insurers open to damages claims.
Rosling King property litigation expert Paul Lowe told Insurance Times that the last property market slump in 1990 had led to a flurry of claims against valuers. But Beachcroft Wansbroughs professional risks partner Duncan Greenwood said a recent case could ease these fears.
The judge in George & Others v Country- wide Surveyors decided that a surveyor who had been asked by a lender to value a property only had a duty of care to the lender client, and not to the purchaser.
The judge also found that a disclaimer excluding all liabilities to third parties was legal, overturning case law based on the 1989 House of Lords' decision on Smith v Eric S Bush.
In George & Others the claimants had bought a house to let and the lender retained Countrywide to provide a mortgage valuation report.
The report valued the property in excess of the price paid and made no mention of any defect.
However, the claimants could not find any tenants and the property was sold for a third less two years later.
The claimants alleged the property had significant defects that made it worth less than they paid.
The defendants denied they had a duty of care to the claimants because it was a commercial transaction, in that they were buying to let, and that the disclaimer was unequivocal.
Greenwood, who acted for the defendant surveyors, said the decision meant valuers were no longer liable to anyone who was not their client where there was a commercial purpose behind the purchase.
"The decision represents a significant change to a principle that has undoubtedly cost the surveying profession dearly over the last decade," he said.
