UK: Valuers – Round Two?

Last Updated: 9 December 2010
Article by Tom White

The UK is now out of recession and the new Government is promising stability and growth, but does that mean that surveyors and valuers and their professional indemnity insurers can breathe a sigh of relief?

It is well known that in the last recession in the early 1990s surveyors and valuers were a major target for professional negligence claims. The fact that surveyors and valuers have to maintain a minimum level of professional indemnity insurance cover means that they are often viewed as softer targets with deep pockets. The collapse in the property market, both residential and commercial, exposed a variety of transgressions. It appears that the same pattern is emerging this time around.

Surveyors and their insurers are already seeing an increase in the volume of claims. In the last recession there was a time-lag before a dramatic increase in the volume of claims was seen, so the trend may continue to rise.

With the exception of mortgage fraud, we are not seeing a change in the nature of claims made against surveyors and valuers as compared with the boom times. All of the usual suspects continue to crop up: allegedly defective valuations, rent review disputes, service charge disputes, defective notices, defects missed in structural surveys etc. In our experience the vast majority of claims against surveyors arise out of valuation work. After that, by volume at least, come claims in relation to property management, advisory services and building inspections. The surveying profession covers a huge range of specialisms, but more often than not claims arise out of the same small practice groups.

There are a number of ways in which a downturn can be the cause of increased claims against surveyors going forward.

For example:

  1. Where firms have had to make redundancies this may lead to fewer people monitoring compliance with risk management procedures, staff being redeployed to sectors outside their field of expertise, staff "hoarding" work and not working as a team, all of which increases the risk of claims.
  2. There is an increased likelihood of firms taking on inappropriate instructions, or instructions from inappropriate clients.

Perhaps more significantly, however, there are also ways in which a downturn can exacerbate problems which were the result of other events:

(a) The fact that the recession was preceded by a period of sustained heightened activity (as was the last recession) means that there are more transactions which might have given rise to problems and a greater chance of professionals being over-stretched and having slipped up.

(b) The downturn in the property market and the increasing numbers of home owners in difficulties may reveal problems which otherwise would have been hidden by rising values.

(c) A drop in the profitability of clients' businesses may mean that they have a commercial incentive to start examining past transactions for any irregularities, and the lack of ongoing activity will mean they have time to do so. For example, we are aware of banks reviewing entire loan portfolios in the hope of identifying a possible claim.

(d) Third parties, such as a new board of directors or an administrator or liquidator, may become involved in a client's management and may seek to question the services previously provided by the client's advisers.

(e) The fall in the property market can increase the severity of claims. For example, the quantum of a claim relating to a failure to respond to a landlord's rent review notice may not be capped by the following rent review in the same way as it could be in a rising market (when the argument would be that the rent would go up at the next review anyway, irrespective of whether the property is over-rented as a result of the failure to respond to the notice); or the lack of suitable sub-tenants or assignees may make mitigation of loss more difficult or less effective.

(f) Clients will recognise that times are just as tough (if not tougher) for surveyors and valuers as they are for the client. This may mean that clients will seek to exert additional commercial pressure in the context of a professional negligence claim: the threat of losing a client's business becomes all the more meaningful in a stagnant market.

Insofar as claims relate to historic events, to a significant extent the die is already cast. However, there are steps that can be taken to manage potential claims. Carrying out reviews of sample files in areas which have been identified as possible risks will not only help improve a firm's risk management procedures going forward but may also help preserve crucial evidence if a claim is made. Careful thought should be given to whether to sue a client for unpaid fees, in view of the chance of this provoking the client into making a claim.

It is important that firms continue to maintain high standards in managing risk. If anything, risk management and compliance procedures should be tightened up. Care should be taken when redeploying employees to different parts of the business.

The law, this time around, is also more in the surveyor's favour. SAAMCO has established that the surveyor's liability is limited to the extent of his negligent over-valuation; the Nationwide litigation against various solicitors in the late 1990s has laid the groundwork for contributory negligence claims against lenders; the recent decision of K/S Lincoln v CBRE has confirmed that provided the valuation is within a reasonable bracket, it is not negligent, irrespective of the potential errors within it. We also now have new arguments on syndication and securitisation issues. The future is not all gloomy for valuers.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.