EWJ June 61 2025 web - Flipbook - Page 19
The Court further noted, obiter, the apparent 'logical
fallacy' whereby a valuer could be found to have
breached the Bolam test but not be liable so long as
their valuation falls within an appropriate bracket.
(This was not the ‘logical fallacy’ which had been the
subject of submissions at the hearing – that related to
the proposition that a valuation could be outside the
reasonable margin of error even if every stage of the
valuation had been carried out competently). The
Court looked at the cases of SAAMCO[4] and Lion
Nathan[5] in which Lord Hoffman placed the focus of
any assessment of liability on whether reasonable care
had been taken by the valuer, rather than the end result. The Court noted that Lord Hoffmann appeared
to depart from the notion that a non-negligent range
or bracket is at all relevant to the question of whether
the valuer took reasonable care and skill, and questioned whether these passages were consistent with a
pre-condition that a valuation be outside of a reasonable margin of error overall before any finding of
liability can be made against a valuer.
simply because a Judge comes to a different view
about the ‘true’ overall valuation figure. And, for now
at least, there remains the additional protection for
valuers that even if a methodological mistake has
been made which has distorted the overall valuation
number provided, they will not be found liable for
damages unless the overall valuation number provided falls outside of a reasonably competent range
for that valuation number.
It was in respect of this latter point that the Court of
Appeal in Bratt v Jones indicated some difficulty with
the law. As set out above, the Court pointed out that
the precondition to liability which has been established
in valuers’ favour - i.e. that the overall valuation has
to be outside of a reasonably competent overall valuation number before any liability can be found- appeared inconsistent with the dicta of Lord Hoffmann
in a number of cases, and a fairly clear indication was
given that the Court did not see any compelling reason in the higher authorities as to why this precondition should be imposed.
In respect of how the margin of error is to be
calculated, the Court also agreed with the Defendant
that this was clearly a question of fact to be determined
by the Court on the basis of the evidence before it.
This point was not however fully argued, and should
this point ever find its way to the Supreme Court, we
would suggest that its determination would depend
upon what view the Supreme Court took about the
scope of the valuer’s duty, and whether the duty was to
provide a reasonably competent overall valuation, or
was to exercise reasonable care and skill to avoid error
in the valuation report. There are potentially strong
arguments both ways on that (and indeed that question might be viewed as one that is fact-specific to the
individual valuation; perhaps valuers will have an eye
on this when setting out the scope of their duty in retainer letters going forward), but it is all for another
day; for now, the law remains that there is a pre-condition to liability in valuers’ cases that the overall valuation must be outside of a reasonably competent range.
In circumstances where (i) the Claimant did not adduce any evidence at trial from his expert in respect of
the margin, (ii) the Defendant's expert opined that the
margin could have been up to 20% but given the availability of the comparable considered it to be 15% and
(iii) all the other evidence as to reasonableness of a
margin was considered, the Judge was correct in his
evaluation and was entitled to reach the conclusion he
did as to a reasonable margin of error.
In terms of the remaining grounds, the Court gave
them short shrift, finding that the Judge had a clear
evidential basis on which to make his findings of fact.
It appears that consideration of this issue by the
Supreme Court will require an appropriate case in
which (i) the claimant has pleaded out a case that, on
the specific facts, there was a duty the scope of which
makes an overall bracket for error inappropriate; (ii)
the defendant has pleaded a response to the claimant’s
case on the scope of the duty; (iii) there is a proper investigation of the matter at trial and findings made by
the trial judge as to the scope of duty arising on the
specific facts. In Bratt v Jones, for example, the Defendant was retained to provide a valuation number to
be inserted into the payment formula of an option
agreement– not an account of how the number had
been calculated. This would, we suggest, be a paradigmatic case where the bracket precondition approach
to liability is appropriate. This will all be teased out in
future cases. For now, the law remains relatively
straightforward: there is a pre-condition to liability in
valuers’ cases that the overall valuation must be outside of a reasonably competent range.
Commentary
The appeal judgement is an affirmation of what had
been perceived within the profession as the orthodoxy
within this area of law, albeit with an obiter sting in the
tail, which provides cause for speculation as to whether
the law may change in due course should a suitable
case find its way to the Supreme Court.
The good news for valuers (and their insurers) is that
the case emphasises the need for a claimant to both
plead and prove the specific respects in which it is alleged that a valuer has conducted a valuation in a
manner which no reasonably competent valuer could
have done. It also reaffirms that a claimant’s evidence
must address the reasonable margin for error which
exists in respect of the particular valuation, as the margin of error is a question of fact in each case.
The primacy of the Bolam principle has been
emphasised, and defendant valuers can rest easy in
the knowledge that they will only be found to have
acted negligently where the Court has found that
something specific they did in respect of their approach to the valuation in question was outside the
bounds of reasonable professional competence. There
will not be any findings that a valuer was negligent
EXPERT WITNESS JOURNAL
Whilst the Court’s obiter dictum on the bracket
approach might be seen as something of a surprise,
there was, we suggest, no real surprise in the Court of
Appeal dismissing without hesitation the proposition
that the burden of proof is in any way on the
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JUNE 2025
