Blog: Surveyors' duty of care - recent decisions from the courts

Two cases in 2014 (Matthews v Ashdown Lyons and Mavis Russell v Walker & Co and others) and a further case this year (Bush v Summit Advances) reined in the principles of personal liability that were established in the 2001 case of Merrett v Babb. In that case, the court held a surveyor personally liable for a negligent overvaluation, sending shockwaves through the surveying profession.

While a number of cases have followed in the interim, these recent cases provide some helpful guidance on the circumstances in which a surveyor may be held personally liable. While such a decision will always be fact-specific, the courts appear increasingly reluctant to make a finding of personal liability unless there are clear public policy reasons for doing so.

These are unlikely to apply where a claimant is of reasonable means; has obtained separate independent advice (in the case of a survey or valuation); and has instructed a limited company (as opposed to a sole trader or partnership).

Two other 2014 cases saw the courts consider the scope of the duty owed by a surveyor. In Hubbard v Bank of Scotland, the claimant claimed the bank's surveyor ought to have warned about the risk of settlement to her property, on the basis of two cracks noted in the report, and to have advised her to obtain a full structural survey. The court found the surveyor's instruction was limited to providing advice on matters relevant to value and concluded that it was unrealistic to expect a valuer to recommend a full structural survey on the basis of two small, historic cracks. The report was therefore not negligent and the claim failed.

The case of Freemont (Denbigh) v Knight Frank concerned a valuation provided by Knight Frank for some land the claimant owned and was seeking to develop. Knight Frank was instructed by Lloyds after the claimant approached the bank seeking a bond to enable the development.

The development never went ahead and the claimant sued Knight Frank, arguing that it had relied on the valuation when deciding to reject offers made for the property. The court held that Knight Frank had been instructed to advise for the purposes of the bond and not for the purposes of the claimant considering what to sell the property for. Knight Frank was therefore held not to be liable for the claimant's loss.

As the past five years have been a dismal time to be a surveyor and their insurer, it's good news that the courts appear to be taking steps to resist attempts to extend both the scope and nature of duties owed by surveyors.

Alexandra Anderson, partner, and Katharine Fletcher, associate, RPC