The main difference between professional
negligence and ‘ordinary’ negligence is that while every defendant is expected
to exercise reasonable care, professionals are expected in addition to exercise
reasonable skill. And skill, of course, involves knowledge. The professional
bodies that govern surveyors and valuers, in making continuing professional
development a mandatory requirement for their members, were among the first to
give explicit recognition to the need for practitioners not merely to
demonstrate their knowledge by achieving a qualification but to keep that knowledge
up to date. In fact, however, the courts had long imposed a similar
requirement, in the context of negligence claims; both surveyors and valuers
have been held liable to their clients for failing to appreciate something
which, in the eyes of the judge, would have been known by a reasonably
competent practitioner.
The best known example of this is probably the
case of Weedon v Hindwood Clarke & Esplin [1975] 1 EGLR 82, in which
the defendant firm of surveyors was held negligent for failing to keep abreast
of developments in an area of law relevant to its work. The defendants had been
retained to act for a client in compulsory purchase negotiations. Shortly
before these negotiations began, a well publicised decision of the Court of
Appeal altered the law as to the date on which property should be valued for
this purpose, and this new rule was confirmed by the House of Lords before the
defendants agreed a figure on behalf of their client.
Despite this change, which would have been very
favourable to their client, the defendants allowed themselves to be persuaded
by the district valuer to agree upon a figure that was clearly based on the old
law, and were held liable in negligence for the resulting loss.
The case of Izzard v Field Palmer (unreported
February 20 1988) concerned a mortgage valuation of residential property
carried out in November 1998 by a partner in the defendant firm of surveyors.
In the course of processing the mortgage application, the plaintiff purchasers
were offered the alternative of a more detailed survey, which (on the ground of
expense) they declined.
The property in question was a maisonette in a
four-storey block on the Rowner Estate in Gosport, which had been built in the
1960s. The whole estate was built to the Jesperson 12M system, a type of large
panel system using a combination of concrete panels and timber cladding.
The defendants, in their mortgage valuation
report, drew attention to the method of construction, but, in valuing the
property at £42,000, gave an affirmative answer to the question, ‘Is the
property readily saleable at or about the valuation figure for the purpose of
owner occupation?’ Relying on the defendants’ report, the plaintiffs agreed to
purchase 997 years of a 999-year lease of the maisonette.
Unfortunately, when they wished to move, in
1991, the property proved to be virtually unsaleable. Following the plaintiffs’
mortgage default, it was ultimately repossessed and resold by the lenders for a
mere £6,000.
The basis of the plaintiffs’ claim against the
defendants was as follows:
l The value of large panel-system buildings
is adversely affected by two factors: there is a sufficient risk of structural
problems to require a detailed inspection by a structural engineer every five
years; and a tenant (especially one on a large estate) may incur responsibility
for large service charges.
l At the time that this property was sold, a
competent surveyor carrying out a mortgage valuation would have been aware of
these problems (which were regarded as severe enough that some lenders would
not accept such properties as security), and would have flagged up the
difficulties that might be encountered on an attempted resale.
In support of these allegations, the plaintiffs
were able to produce a Home Buyers Report and Valuation that had been carried
out by another surveyor on a neighbouring property at about the same time. This
pointed out all the factors mentioned above, and also stressed that a
purchaser’s solicitor should be asked to check the level of service charges
over the past few years. The plaintiffs also relied on an expert witness who
testified that, since a purchaser’s responsibility for service charges might
well extend to buildings other than that in which his own dwelling was
situated, a surveyor or valuer should draw attention to the risk of substantial
ongoing expenses.
Most significantly, perhaps, the plaintiffs
produced the results of a careful trawl through technical and professional
literature published in the mid-1980s, which indicated clearly that the
problems associated with large panel-system buildings were known to the
profession. Between June 1986 and October 1987 (that is, at least a full year
before the defendants’ report), there were information papers from the Building
Research Establishment, and articles in Estates Gazette, Chartered
Surveyors Weekly and in the RICS library.
Presented with this evidence, Scott Baker J was
in no doubt:
‘There was, therefore, ample material available,
and, in my judgment, readily accessible, for a surveyor who was unfamiliar with
this type of building to have appraised himself of the type of problems which
might affect the building’s value. These matters ought to have been drawn to
the attention of a prospective purchaser.’
And, since his lordship specifically emphasised
that a mortgage valuation requires precisely the same standard of care as a
more extensive survey, it followed that the defendants were guilty of
negligence and were therefore liable for the difference between the price paid
for this property and its true value, which the expert evidence put at £14,000.
The one outstanding point raised by the
defendants was the assertion that, in missing the warning lights contained in
the contemporary literature, they were no different from many other surveyors
who carried out valuations on this estate. But this attempt to lower the
standard of the ‘reasonably competent practitioner’ received very short shrift
from the judge:
‘There is . . . no separate ‘Rowner’ standard of
care. The fact that other valuers were getting it wrong too is no answer.’
