Negligence claims for negligent valuations. Information and advice

In making a professional negligence claim for negligent valuation services, a number of key issues will need to be addressed.Among these are the issues of proof relating to duty of care owed by the valuer, breach of that duty and consequent financial loss.

Informational or advisory

However, there is also another, perhaps more complex, aspect of a professional negligence claim for negligent valuation services.This is the question of whether the valuation was merely informational, and as such provided with the purposes of empowering the client to make its own decision about an investment, or whether it is advisory, and as a consequence given with the intent of providing the client with a recommendation about his or her best course of action.Under the scope of the law, there is a vital difference between these two types of valuation: In the first case, where the valuation is informational, it is probable that a negligent valuer will be liable only for the foreseeable consequences of the flawed advice; in the second case, where the valuation is advisory, the valuer may in certain cases be liable for further foreseeable consequences stemming from the incorrect valuation.

Banque Bruxelles Lambert v Eagle Star Insurance

This distinction between providing information and advice was established in the 1997 case of Banque Bruxelles Lambert S.A. v Eagle Star Insurance Co Ltd in 1997.In his judgement in the case Lord Hoffman stated, "I think that one can to some extent generalise the principle upon which this response depends. It is that a person under a duty to take reasonable care to provide information on which someone else will decide upon a course of action is, if negligent, not generally regarded as responsible for all the consequences of that course of action. He is responsible only for the consequences of the information being wrong. A duty of care which imposes upon the informant responsibility for losses which would have occurred even if the information which he gave had been correct is not in my view fair and reasonable as between the parties. It is therefore inappropriate either as an implied term of a contract or as a tortious duty arising from the relationship between them."The principle thus stated distinguishes between a duty to provide information for the purpose of enabling someone else to decide upon a course of action and a duty to advise someone as to what course of action he should take. If the duty is to advise whether or not a course of action should be taken, the adviser must take reasonable care to consider all the potential consequences of that course of action. If he is negligent, he will therefore be responsible for all the foreseeable loss which is a consequence of that course of action having been taken. If his duty is only to supply information, he must take reasonable care to ensure that the information is correct and, if he is negligent, will be responsible for all the foreseeable consequences of the information being wrong."

Professional negligence claims with Healys

Our professional negligence solicitors can help you make the prudent choice. For advice and assistance concerning a professional negligence claim for negligent valuation services contact our Brighton and London teams, by using our call-back form, or calling directly on 020 7822 4106