The recent Court of Appeal decision in Bratt v Jones has reaffirmed the legal test for professional negligence claims against valuers — a key concern for lenders who rely on accurate property valuations when making lending decisions.
Why This Case Matters to Lenders
Lenders often depend on professional valuations to assess risk and determine loan-to-value ratios. When a valuation proves to be significantly inaccurate, it can expose lenders to financial loss. However, this case confirms that not every flawed valuation will amount to negligence — and that the legal threshold for liability remains high.
Bratt v Jones [2025] EWCA Civ 562 – an overview
1. Background and Facts
Mr Bratt owned a development site in Oxfordshire with planning permission for 82 homes. A developer exercised an option to purchase the site, triggering a dispute over the valuation. Mr Jones, the valuer, was appointed to determine the market value independently. He assessed the site at £4.075 million, leading to a purchase price of £3.53 million after deductions.
Mr Bratt believed the site was worth closer to £8 million and brought a negligence claim, arguing that the valuation was significantly below market value. His expert evidence, however, did not specify a reasonable range of acceptable valuations — a key omission.
2. The Legal Issue: What Constitutes Breach of Duty?
The central legal question was: What is the correct test for establishing breach of duty in a valuer’s negligence case?
Claimant’s Argument: If a valuation falls outside a reasonable margin of error, that alone should be sufficient to establish negligence unless the valuer can prove otherwise. This would shift the evidential burden to the defendant.
Defendant’s Argument: There is a two stage test. Firstly the claimant has to show the valuation falls outside an accepted margin of error. Secondly, the Bolam test applies and the claimant must prove that the valuer acted in a way no reasonably competent professional would have. Both stages are required.
3. The Trial Judge’s Findings
The trial judge dismissed the claim, holding that:
A valuation must fall outside a reasonable margin of error (typically 10–15%) to even consider negligence.
Even then, the claimant must prove a specific failure in the valuer’s methodology or reasoning that no competent valuer would have made.
In this case, the judge found the valuation to be within a 15% margin of error and the approach taken to be professionally sound.
4. The Appeal and the Court of Appeal’s Reasoning
The Court of Appeal dismissed the appeal on all grounds. Key points include:
Burden of Proof: The burden of proving negligence remains with the claimant at all times. There is no reversal of the burden once a valuation is found to be outside the margin.
Two-Stage Test Confirmed:
- Is the valuation outside a reasonable margin of error?
- If so, did the valuer act in a way no reasonably competent professional would have?
Margin of Error is a Factual Issue: The Court confirmed that the acceptable margin is a matter of fact, not law, and must be supported by expert evidence.
5. Obiter Dicta: A Hint at Future Legal Development
While the Court upheld the current orthodoxy, it expressed doubt about the necessity of the “margin of error” precondition. Referring to Lord Hoffmann’s dicta in SAAMCO and Lion Nathan, the Court questioned whether liability should depend solely on whether the valuer exercised reasonable care and skill, regardless of whether the final figure fell within a reasonable range.
This raises a potential future issue for the Supreme Court: Should liability depend on the process or the result?
Implications for Lenders
This decision reinforces several important points for lenders:
- Burden of Proof: The onus remains on the claimant to prove both an unreasonable valuation and professional incompetence.
- Margin of Error: Courts recognise that valuations are not exact and allow for a margin of error — typically 10–15% depending on the property type and market conditions.
- Expert Evidence is Crucial: Any claim must be supported by robust expert evidence showing both the valuation error and the flawed methodology.
Practical Considerations for Lenders
- Due Diligence: Continue to instruct reputable valuers with clear terms of engagement and professional indemnity insurance.
- Review Valuation Reports Carefully: Look for clear reasoning, comparable evidence, and risk caveats.
- Act Promptly: If a valuation appears flawed, seek legal advice early — limitation periods for negligence claims can be strict.
- Understand the Limits of Liability: Even a significant difference in value may not be enough to establish negligence unless the valuer’s conduct was clearly substandard.
This article is for information only and does not constitute legal/financial advice. Please contact us for advice tailored to your specific position. Some of the content presented on our website has been generated with the assistance of Artificial Intelligence (AI). We ensure that all AI-generated content meets our high standards for accuracy and relevance.
