Negligent valuation de-constructed : What is negligence at law? What are the practicalities in helping to avoid a claim?

Abstract

The implications of negligent valuation are imparted to surveyors from their student days and throughout their careers. Although without the emotive issues surrounding areas such as medicine, the financial impact with real estate transactions can ruin firms and individuals and, at the least, impact insurance premiums. Claims against valuers in negligence continue unabated, peaking when losses are exacerbated through falls in property values. Thus, a deeper understanding of how, practically, to fulfil the duty of care in valuation work is of relevance to all working in this area. The basis of negligence at law is set out with a brief review of the development of that law since the 19th century and a round-up of selected cases allowing them to provide lessons to practitioners on the practical means of avoiding a finding of negligent valuation. This paper also discusses the interaction between guidance notes, practice statements and other documents such as terms of engagement and the potential for deviation from professional standards in certain circumstances. It is evident from the law reports that although there has been judicial assertion that professional standards are not law and that non-compliance may not, of itself, constitute negligence, in practice it probably will.