In Anne Hubbard v Bank of Scotland Plc (2014) EWCA Civ 648, the Court of Appeal looked at the scope of a surveyor’s duties in providing a valuation report based on a limited visual inspection of a property.
The claimant had purchased a residential property with the assistance of a mortgage from Bank of Scotland Plc. A valuation report was carried out by Colleys, Bank of Scotland Plc’s surveying arm. The comments in the valuation made reference to some cracking and a distortion of window frame at rear of the property. The report also noted that there was some wear and tear to the property and that it had suffered previous movement, but the surveyor saw no evidence to suggest this was ongoing. The valuation concluded that the property was sufficient for mortgage purposes.
The report was based on a limited inspection of the property. The surveyor did not move furniture, lift carpets, look into roof spaces or carry out anything other than a basic visual inspection. The guidance notes to the report made this clear and also highlighted that there was the option to request a more detailed report.
After moving in to the property, the claimant discovered cracking and raised an action against the surveyor for professional negligence. This was based on the surveyor’s alleged failure to advise that subsidence was or might be ongoing, to suggest that specialist advice be obtained or to suggest a substantial reduction in the valuation of the property due to the cracking.
The claimant was unsuccessful at first instance and at the Court of Appeal. The court agreed that the surveyor had not been negligent. The report had not been a full structural survey and the claimant had been made aware of that. The surveyor did not need to advise that the claimant obtain a more extensive valuation report or fuller inspection of the property and had reminded the claimant of the option to obtain a more detailed report. If surveyors were required to recommend a full structural survey in all cases where they spotted a small, longstanding crack in a property with no signs of ongoing movement, it would mean that in any sale where there was any evidence of slight cracking in the past, a full survey would be needed. This would not likely be welcome by sellers, lenders or borrowers.
Summary
The decision will no doubt provide reassurance to surveyors and their professional indemnity insurers that surveyors’ duties will be assessed against the scope of their instructions. By the same token, it highlights the importance of issuing clearly defined terms of engagement, not just for surveyors but for all professionals, either at the outset of receiving instructions or in the body of a report or other advice, to assist with clearly identifying and limiting those duties.
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