Margin of error crucial in defeating negligence claim against valuer

A recent High Court judgment demonstrates the vital importance of the margin of error in claims against valuers, and the need to focus on the valuation result rather than the process.

In Bratt v Jones, a landowner claimed against an independent expert valuer regarding the valuation of development land for the purposes of an option agreement. The court dismissed the claim, finding that the valuer's assessment of £4.075m, while lower than the "correct" value of £4.747m determined by the judge, still fell within the permissible 10-15% margin of error for a non-negligent valuation.

The judge found that the valuer made some errors in his treatment of development "enhancements" and interest on deferred payments in his comparables analysis. However, he ruled that the claim failed at the first hurdle as the valuation was within the acceptable bracket, without needing to examine in detail whether aspects of the valuer's process breached the standard of care.

The decision affirms that negligence claims against valuers will not succeed merely by establishing a "correct" value higher than the challenged figure. The key question is whether the valuation falls outside the reasonable margin, taking into account the type of property and complexities involved. Only then will the court closely scrutinize the valuer's methods.

While each case depends on its facts, the 10-15% bracket applied here for a development site valuation is a helpful guideline. Claimants will face an uphill battle establishing liability where valuations are within this range, even if certain elements of the process are open to criticism.

Click here to read the full judgment.