York The Court of Appeal has recently considered the case of Bratt v Jones and has reaffirmed that in order to establish negligence and breach of duty of care against a valuer, the claimant must show that the valuation fell outside the ‘applicable bracket’ and that the valuer failed to exercise reasonable care and skill.
The facts are that Mr Bratt entered into an option agreement with Banner Homes for the sale of development land at Cotefield Farm in Oxfordshire. The option was exercisable by Banner Homes following the grant of planning permission for residential development of the site, and it provided that the price payable by Banner Homes to Mr Bratt would be 90% of the market value (as defined) of the site at a specified valuation date, less certain sums.
The option agreement provided that, if the parties were unable to agree the market value, they were entitled jointly to instruct an independent surveyor, experienced in the valuation of development land for the use specified in the relevant planning application, to determine the market value.
Mr Jones, the appointed valuer, assessed the land at £4,075,000. Mr Bratt said that the true value was £7.8m and claimed negligence and breach of contract. The dispute centred on whether the valuation fell outside the acceptable bracket and whether the valuer had acted negligently. Mr Bratt claimed that a careful valuer would have produced a valuation within a margin of 10% above or below £7.8m. However, the High Court found the correct value to be £4,550,000 and determined a permissible margin of 10–15%. As the valuation was within 14.15% of the correct value, the claim failed.
Mr Bratt appealed. Unfortunately for Mr Bratt the Court of Appeal dismissed the appeal and held that a valuation outside the bracket does not automatically establish negligence, confirming that claimants must establish both that the valuation was outside the permissible margin of error and that the valuer failed to act with reasonable care and skill.
What are the implications of this case?
This case has implications for professional negligence claims against valuers. It confirms that it is not enough only to show that a valuer is outside the margin of error; you need to show how the valuer has been negligent. The relevant margin of error, and an expert valuer’s view on it, is key to the likely success of any claim of this type. In this case, the difference between the valuer being successful or not was just 0.85%!
If you have concerns about professional negligence, valuation disputes, or would like advice on how this case might affect you, please contact our Litigation & Dispute Resolution Team, on York 01904 716000, Wetherby 01937 583210 or Malton 01653 692247or email law@warekay.co.uk.
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