In Bratt v Jones the Court of Appeal has confirmed the traditional interpretation of the law to prove negligence against a valuer, namely it is for the claimant to show that (i) the valuation falls outside a reasonable bracket (or margin of error) and (ii) the valuer has been negligent i.e. breached their ‘duty of care’ or in other words, prove that the professional has failed to act in accordance with the practice of a reasonably competent professional. The reasonable bracket test is a requirement if liability is to be established.
The background of the case
Mr Jones was a valuer instructed to act as an expert in the determination of the open market value of a piece of development land near Banbury. The seller, Mr Bratt, argued that Mr Jones’ figure was too low, outside the reasonable range, and had caused him loss. The seller’s valuation was around £7m – £8.6m, whereas Mr Jones valued the site at £4.075m. At the trial the judge agreed that the valuation was low and that the proper valuation was around £4.7 million. However the judge also said that the reasonable bracket was +/- 15% and Mr Jones’ valuation was 14.15% lower than the correct value. On this basis there was no need to consider whether the duty of care has been breached. The case did not succeed given the Judge’s findings.
Mr Bratt argued that it was enough to show that the valuation fell outside the reasonable bracket, and if so then the valuer had to disprove the negligence. The court disagreed and said that the identification of a bracket itself was not enough. A claimant needed to show that a valuation figure was outside the reasonable bracket and that the valuer failed to act with reasonable skill and care with respect to the methodology used by the valuer. Incidentally the errors made by Mr Jones were identified in Mr Bratt’s experts repot but not in the way the court case was pleaded.
However the court also indicated a logical fallacy: if the valuation is within the reasonable bracket though negligent (because of mistakes made during the valuation) the valuer will escape liability. The question is the fairness with this kind of result and should liability depend on the methodology or process followed by the valuer or the end result? In fact, in the current case, if the valuation by Mr Jones had fallen outside the reasonable bracket, he would have been negligent as he had made an error in the methods he had used. Because of this error, the market value of the land would have increased and Mr Bratt would have been entitled to damages.
A suitable future case will need to review the two stage approach in a higher court (the Supreme Court). Until then, the current test for proving negligence against a valuer remains.
Practical steps
This case highlights the importance of the relevant margin of error on liability, and an expert valuer’s view on the reasonable bracket. Early evaluation with an expert is essential at the outset of a dispute both on the bracket and any errors in the valuation as well as the way that the claim is presented at court is consistent with the expert evidence.
