Clifford Chance
Valuation and Professional Negligence
20 September 2011
The High Court has handed down judgment in Capita Alternative Fund Services (Guernsey) Limited (formerly Royal & Sun Alliance Trust (Channel Islands) Limited (1) and Matrix-Securities Limited (2) v Drivers Jonas (a firm) [2011] EWHC 2336.
In his thorough judgment, Eder J determined that Drivers Jonas ("DJ") negligently overstated the value of a factory outlet retail centre ("FOC"). The Court held that DJ was liable for just over £18m – i.e. the amount that the Claimant overpaid for the property as a result of the negligent valuation. As well as the amount of damages awarded, the case is significant as it is one of the first sizeable professional negligence claims to have emerged since the recent downturn (albeit, the negligence complained of dates back to 2001).
The case will no doubt cause concern to professional valuation firms. It is also very relevant to investors and funders who may have purchased property in reliance upon professional advice as to valuation. If the value of the investment is not what it was advised to be, investors and funders need to know what remedies are available to them.
