EWJ June 61 2025 web - Flipbook - Page 18
competent valuer will adopt the same approach as well
as the fact that not every error will amount to a
breach of duty. As such, a non-negligent range will
encompass every result that could be arrived at by a
reasonably competent valuer.
therefore was likely to lead to an accurate assessment
("or thereabouts") of the true market value of the site.
The Judge considered each stage of the valuation
process and concluded that the most likely market
value of the site was £4,746,860, which placed the Defendant's valuation within an acceptable margin, of up
to 15%. As such, there was no need for the Judge to go
on to assess the Defendant's practices as compared to
a respectable body of his peers any further, and the
claim was dismissed.
In essence, the Defendant's position was that a valuer
cannot be found liable unless the Court finds that (i)
some aspect of the valuation was carried out in a
manner which was not reasonably competent and (ii)
the valuation falls outside a reasonable bracket,
looking at all the evidence available.
The Claimant appealed on the basis of 4 grounds
including 2 relating to the Judge's approach in law.
Finding at trial
The first instance Judge dismissed the claim.
The appeal
The appeal was dismissed in full by the Court of
Appeal.
He essentially agreed with the Defendant's analysis of
the law and, having reviewed the various authorities,
distilled two main principles:
In respect of the 2 grounds of the law, the Claimant
argued that:
l The Judge applied the wrong legal test to
determine liability, the correct approach being that if
the valuation falls outside the margin, it is determinative of liability unless the valuer can prove they were
not negligent.
l A finding of negligence can only be made if the
valuer failed the Bolam test, namely to reach the standards of a reasonably competent professional in that
field;
l But it is a precondition of liability that the valuation
falls outside an acceptable bracket.
l The Judge was wrong to approach the assessment
of the margin as a matter of fact to be determined by
reference to expert evidence; it was a question of law
for the Court to assess and should have been 10%.
The Judge found that the Court's task was to form its
own view as to the correct value and then identify an
appropriate margin of error. Should the original valuation fall within the margin, there is no negligence.
Should it fall outside the margin then the Court must
examine whether the valuer has failed the Bolam test.
The Court rejected both of these arguments, making
it clear that: "whilst a valuation outside the acceptable bracket
is an indication that something may have gone wrong, a claim
in negligence or breach of contract against a valuer cannot
succeed unless the court is satisfied that the valuer has failed
to exercise due and proper professional skill, care and diligence in undertaking the valuation"[3].
The Judge made it clear that, ultimately, the question
of negligence could not be decided solely by whether
the valuation fell outside a reasonable margin of error
but by reference to whether the valuer acted "in accordance with practices which are regarded as acceptable by a
respectable body of opinion in his profession."
The Court did not disagree with or disapprove of the
trial Judge’s approach in any respect.
The Court emphasised that, in complex valuations,
an assessment of the 'true' value will often require considering what a reasonably competent approach
would be to each step of the calculation. If the valuer
is able to show that the steps they took would be
considered acceptable by their professional peers,
negligence cannot be established.
The Court confirmed that the first question, in
accordance with Merivale Moore, is whether the valuation falls outside a reasonable margin of error and if
so, the second question is that of the valuer's competence (ie the Bolam test). In respect of this second question, the Court made it clear that the legal burden of
proving negligence was not, as the Claimant had argued, reversed (it being unhelpful to refer to an 'evidential' burden in respect of this issue) and that the
burden of proving negligence rests at all times on a
claimant.
There will often be some differences between how
different valuers approach a valuation and there can
often be more than one single accepted practice in respect of the issues that arise. Where there are a range
of approaches that the profession would generally accept as being reasonably competent, this should be reflected in the Court's assessment of the reasonably
competent range.
On this basis, in circumstances where the Defendant's
valuation was found to have fallen within an appropriate margin of error, the trial Judge was correct in
finding that there was therefore no requirement to
consider the Bolam test. But if there had been a finding that the valuation was outside of a reasonable margin of error, there would have had to have been a clear
finding as to what the valuer had done negligently
wrong. The Court did not disagree with the trial
Judge’s finding that only pleaded allegations of negligence could be considered in this respect.
In the present case, the Judge found the Defendant to
have acted competently in his reliance upon one comparable site and in assessing the comparable evidence
by reference to how a hypothetical purchaser would
have approached its valuation of the land, market
value being a question of what the market would pay
for it. The Judge found that the Defendant's approach
in this case reflected the exercise which was likely to
have be taken by the hypothetical purchaser and
EXPERT WITNESS JOURNAL
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JUNE 2025
