Valuer found not to be negligent for reliance outside the scope of his instruction
In the recent matter of Freemont (Denbigh) Ltd v Knight Frank LLP  EWHC 3347 (Ch) the High Court has rejected the claimant’s contention that the defendant valuer was liable for negligently over-valuing a piece of land.
The defendant had been instructed to value the land for secured lending purposes, which it did. Towards the end of the substantive limitation period, the claimant claimed that the report had also been commissioned to allow it to assess the value of the land for the purpose of a possible future sale. The claimant asserted that, had the defendant’s valuation been accurate and not a negligent over-value, it would have accepted one of the offers which it had received and, as the land now had no value, the claimant’s entire loss was attributable to the defendant.
Having analysed the documents and witness evidence closely, the Judge (a) found that the claimant’s evidence that the defendant knew the report was also to be relied on to value the land for an onward sale had been produced after the event; and (b) rejected the claimant’s assertion that the defendant knew (or knew there was a high probability) that the claimant would rely on the report when considering whether to sell the land.
The Judgment contains a useful summary of the common law duty of care owed by a valuer and should be borne in mind when setting out the scope of an expert or specialist’s instruction.