Russell Francis, head of the valuation and advisory services department at Colliers International, has spoken of how the firm feels “100% vindicated” after CMBS vehicle White Tower dropped its negligence action against the valuers.
In an interview, Francis said that it was hard not to take negligence claims personally, and that Colliers felt it had to defend itself, despite litigation inevitably leading to publicity.
He said: “We feel 100% vindicated. I think that being sued for negligence is quite a personal thing, even if you’re not necessarily directly involved in the valuation itself. By going to court you obviously bring yourself into the public eye, which we as valuers would not normally seek. But we decided to go down this route because we had to defend ourselves against claims we thought were completely without merit.
“We feel that we have very robust valuation processes and we are very proud of how we service our clients. It’s natural to want to defend yourself particularly if you feel you haven’t done anything wrong.”
He feels that confidence in the valuation profession remains high, and that little should be read into the fact that White Tower’s case, and the earlier claim brought by Titan Europe 2006-3 against Colliers, both involved securitisations and large headline figures.
He said: “These two cases were similar, but that may be just coincidence. They both happened to involve commercial mortgage-backed security vehicles but I don’t think one should read too much into that.”
He added: “We can’t comment on how other firms may or may not be affected but the way we looked at this is that someone was claiming against us and we felt 100% sure about the position, that we had valued correctly.”
This White Tower claim and the Titan claim both raised “title to sue” points over whether each claimant should be allowed to seek redress.
In Titan, while Colliers was successful on the basis that the Court of Appeal found its valuation was not negligent, the title to sue point was rejected albeit on an obiter basis. However, in the White Tower case, Colliers argued as part of its defence that the securitisation was structured in a way that meant that White Tower had no cause of action.
That factor, it claimed, distinguished the case from Titan. The abandonment of White Tower’s claim means that there will be no ruling on this point, but Francis is not disappointed about that, stressing: “Our main approach had been to defend our valuation.”
He said that the £1.8bn valuation was well-supported by evidence at the time, and that the claim made by White Tower had been “totally unmeritorious”.
CMBS vehicle White Tower discontinued its negligence claim late in a near-month long trial, leaving it empty-handed despite alleging losses of £39m.
Owing to doubts about White Tower’s ability to meet an adverse costs order, Colliers agreed not to pursue an order in respect of its costs.
