When property prices fall and people, investors and lenders lose money, there is an inevitable surge in professional negligence claims against surveyors, valuers and estate agents.
But the fact of financial loss is, in itself, not grounds for a negligence claim. During the property market crashes of the 1980s and early 1990s many claimants discovered this to their detriment – the inability of a valuation professional to foresee a general crash or decline in market conditions can by no means be considered negligence.
Market falls can have profound economic consequences, which may, for individual house buyers, become painfully personal, but they are, by nature, rarely foreseeable or predictable, even if cycles of boom and bust are, as economists such as John Maynard Keynes maintain, inherent characteristics of the free market system.
Any solicitor seeking to defend a negligence claim against a surveyor, valuer or estate agent for failure to foresee a market fall is likely to counter that any investor or, to a lesser extent, individual buyer is willing to take a risk on property market fluctuations and to reap their benefit and should therefore not expect protection from these same fluctuations in the event they prove disadvantageous.
In short, market falls are unlikely to be foreseeable in the following sense, which was outlined by Judge Thornton QC in Earl’s Terrace Properties Limited v Nillson Design Limited and another  EWHC 136 (TCC): “Overall the law seeks to define the boundary between recoverable and irrecoverable loss by loosely drawn principles of recovery. The loss must be foreseeable and within the scope of the defendant’s duty, it must have been caused by the breach in question, it must not be too remote, it must not, where negligent acts or omissions are in question, amount to pure economic loss and it must be fair and reasonable to impose a duty to avoid that loss. These rules or principles must be imposed, however in a way that allows recovery for loss actually incurred and does not allow recovery where there has been no, or no discernable loss.”
Professional negligence solicitors in Brighton and London
Healys provides quality and trustworthy advice to clients looking to make a negligence claim against a surveyor, valuer or real estate agent. Our professional negligence solicitors in London and Brighton can be reached by call-back form, by emailing partner Robert Johnson or calling directly on 020 7822 4106