Approach to costs
Solicitors at Humphreys & Co. always aim to approach
legal work in a financially-disciplined way. We offer
competitive rates. Our charging approach is both transparent
and geared to the options open to our clients. Our
solicitors generally charge by reference to time spent but
we can often agree fixed fees for specific work or in some
cases risk-adjusted funding structures.
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Negligent valuation of ‘buy to let’ property
Scullion v Bank of Scotland PLC (tla Colleys) [2011] EWCA Civ 693 is an
important case which restricts a valuer’s liability for a negligent
valuation where the subject property is a ‘buy to let’. The House of
Lords decision in Smith v Eric S Bush (a firm), Harris v Wyre Forest
[1990] 1 AC 831, [1989] 2 All ER 514 decided that a valuer instructed by
the prospective mortgagee might be liable to the ultimate purchaser,
notwithstanding any disclaimer, for any loss resulting from a negligent
mortgage valuation. The claimant in Scullion was a buy-to-let purchaser
of a flat, and the valuers (surveyors who eventually became part of the
Bank of Scotland) clearly gave negligent advice, advising that a flat
could be let for £2,000 per month when it proved impossible to obtain
more than £1,050 for it.
The deputy judge in the Chancery Division had followed Smith v Eric S
Bush and awarded damages to the claimant. The Court of Appeal, however,
reversed that decision. Delivering the only reasoned judgment, Lord
Neuberger MR, distinguished Smith v Eric S Bush on the important point
that the evidence in that case was that around 90% of the prospective
owner-occupiers did not commission a separate survey of the property,
and relied instead on the mortgage valuation; the financial constraints
of home purchase were recognised as a major factor in this. No such
evidence had been adduced in the present case in respect of buy-to-let
purchases, and the Master or Rolls assumed that it was likely that those
who were entering the property market purely as investors would both be
likely to have sufficient resources to commission a separate survey,
and would in general be more financially sophisticated. Further, they
would be likely to need specialist advice on the likely rental value and
letting prospects of the property. It was not therefore reasonable for a
valuer’s liability to extend to them. In effect, prospective
owner-occupiers had been treated as somewhat of a special case in Smith v
Eric S Bush, and the Court of Appeal was not prepared to extend that
case any further.
A separate issue of causation was resolved in the claimant’s favour: he
was held to have relied on the report. Discussion of this issue revealed
some disturbing aspects. The claimant had signed up with a company
which offered to assemble a valuable buy-to-let portfolio for him. The
solicitors who acted for them also acted for him on his purchase of the
flat. Having committed the company to the purchase of the flat (but
without having obtained the claimant’s authority) they wrongly advised
him that he was bound by the contract. The arrangements made would seem
bound to lead to a conflict of interests.
Finally, the Court of Appeal offered some guidance on how, if there had
been liability, the quantum of damages should be calculated; though
subject to the proviso that limited evidence had been given on this
point, and limited argument directed to it.
“Hill & Redman’s Law of Landlord & Tenant update”, 06.2011
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We take instructions from UK & international clients. Our independent lawyers are available by email, telephone & fax. With central Bristol offices we are just 90 minutes from London by road or rail and 15 minutes from Bristol International Airport. We can travel to meetings if required.
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Independent approach
We are an independent professional law firm here, not a legal factory turning out mass-produced products. In our experience, determined case-handling is more likely to produce effective results.
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Turnaround time
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careful legal work and precision but also the determination
to keep matters moving. They aim to work in clients' real
interests with energy and pragmatism.
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Communication skills
Solicitors at Humphreys & Co. always try to open up the
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clients in a concise and straightforward way, identifying
clear courses of action whatever the technical or legal
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