Strutt & Parker (S&P) is facing a potential damages payment of up to £10m after being found liable in a £100m negligence claim brought against it by the Earl of Malmesbury.
Malmesbury claimed S&P were negligent by failing to negotiate a rent based on car park turnover in 2000 and subsequently in 2002 and 2003.
He alleges that S&P breached its duty to provide “the highest standard of skill to be expected of a surveying professional” and deprived him of a “realistic income from the land”.
He also claimed that S&P had failed to advise on the possibility of the Earl building a car park on the land or letting it to a third–party car park operator, such as NCP.
In the high court today, Mr Justice Jack found that former S&P partner Ian Ashworth gave negligent advice to the Earl as to the potential rental income on 12 acres of parking land next to
He said Ashworth was “in breach of his duty to the Estate in respect of the negotiation of the 2002 and 2003 leases”.
He added: “I find that if he had fulfilled his duty the most likely outcome would have been that the Estate would have agreed with [the airport] a rent of 10% of turnover on top of a base rent of £9,000.”
However, on the second issue of failing to advise the possibility of building a car park on the land, the judge ruled that Ashworth was not in breach of his duties.
He also ruled against Malmesbury on how the damages should be assessed.
Instead, he agreed with S&P that “the loss was the difference, namely the diminution in the value of the reversions. That would involve putting a value on the land with the actual and hypothetical leases, namely what it would be likely to fetch in the market if it was put up for sale.
“This approach is well established as correct where a party buys land on the negligent advice of a surveyor or solicitor,” he said.
Hugh Williams of solicitors Williams Holden Cooklin Gibbons, which acted for S&P, claimed that potential damages the agent would have to pay would be “very small indeed” and that the judgment was “a complete vindication of S&P’s defence of the massive claims”.
A spokesman for S&P added: “We welcome the fact that the judge has completely dismissed one of the two claims made against S&P and, while he has ruled that the second claim is valid, albeit on a very substantially reduced basis, we continue to maintain that there is no basis whatsoever for such a claim and we will consider our next course of action.”
Judgment on whether the damages hearing scheduled for October should make an assessment on both bases was reserved until Monday.
