Clarity on the approach to liability in Valuer Negligence Cases - Bratt v Jones

On 22 March 2024, the judgment in Bratt v Jones was handed down in the Chancery Division. The judgment provides helpful clarity on the approach to determining liability in valuer negligence cases.

Background

The Defendant, Mr Jones, was jointly instructed by the Claimant, Mr Bratt and a home-building company in relation to a proposed sale of a development site from Mr Bratt to the company pursuant to an option agreement for 90% of its market value. If the valuation of the site could not be agreed, an expert third party would determine it. The expert appointed was Mr Jones.   

The parties instructed separate valuers who put forward submissions to Mr Jones about the estimated market value of the site. Mr Bratt’s valuer submitted a value of £8 million, whereas the buyer’s valuer submitted a value of £1.8 million.

Mr Jones prepared his own assessment using both valuation approaches and determined the market price to be £4.075 million, nearly £1 million lower than the halfway point between the two positions.

Negligence claim

Mr Bratt disagreed with the result and argued that Mr Jones had significantly undervalued the site and had acted negligently. He argued that the true value of the site was £7.8 million, with a 10% margin of error either way and that as a result of the negligence, he was entitled to damages.  

Mr Bratt’s case on liability focused on the result of the valuation, i.e. the fact that Mr Jones’ valuation fell below what he argued to be the true position, rather than the process by which Mr Jones had reached his valuation. Therefore, Mr Bratt argued that the Court could establish negligence by finding that the valuation fell outside the reasonable margin of the correct valuation, rather than considering whether Mr Jones’ conduct fell below the requisite standard of skill and care as set down in Bolam.

Mr Jones’ position on how to approach liability was almost the inverse: he argued that negligence should be established by the process by which the valuation was arrived at, and that this starting point must be the Bolam test: "whether the defendant has acted in accordance with practices which are regarded as acceptable by a respectable body of opinion in his profession"[1]. Mr Jones argued that if he was found to have acted competently in his approach to the valuation, then regardless of the result of the valuation he could not be found to have acted negligently.

Mr Jones did accept that a double-counting error had been made in relation to enhancements within his valuation but denied that this constituted negligence.

Decision

HHJ Kawson KC considered the various authorities and recognised two key legal principles:

1. In order to establish negligence by a professional, it is a fundamental requirement for the Claimant to prove that the professional failed the test as set down in Bolam; and

2. Nevertheless, there is a precondition of liability that the valuer’s valuation should fall outside of the permitted margin of error.

The Court accepted that the proper legal enquiry was that set out by Dove J in Barclays Bank Plc v TBS & V Ltd (summarised as follows):

• The Court must form its own view, based on the evidence and its own evaluation, of the correct value as at the valuation date;
• The Court must then determine the appropriate margin of error by reference to the facts of the case and guided by the principles in K/S Lincoln v CB Richard Ellis;
• If the valuation falls within the margin of error, then liability cannot be established; or 
• If the valuation falls outside the margin of error, then the competence of the valuer must be assessed by application of the Bolam test to establish liability.

The Court adopted the above approach to the instant case, finding:

1. The Court preferred the expert evidence put forward by the Defendant's expert and found that the ‘true’ value of the site at the valuation date was just over £4.7 million on the basis of a comparable approach (as compared to the Defendant's £4.1 million). 

2. The only expert evidence provided on the margin of error was for the Defendant, whose opinion was that a margin of 15% was appropriate. The Court agreed with this. On that basis, the original valuation by Mr Jones fell just within the appropriate margin of error (14.15%). Therefore, Mr Bratt had failed on liability and it was not necessary to assess Mr Jones’ conduct by reference to the Bolam test. 

3. Nevertheless, the Judge did note that Mr Jones had made an error in relation to double-counting enhancements. 

Comment

The judgment in this case provides helpful clarity on the proper application of the test for negligence by a valuer, and confirms that the Bolam test remains a fundamental consideration to establish liability.

It also serves as a reminder for claimants and their legal representatives to ensure that their pleaded case and expert evidence is aligned. In Bratt, the Court considered the allegations of negligence which had been pleaded by the Claimant, but noted that other errors allegedly made by Mr Jones had been identified in the Claimant’s expert report or in legal submissions (but not pleaded). Whilst unlikely to have made a significant difference to the result, it is crucial to ensure consistency in pleadings.

In addition, in this case the Claimant did not obtain any evidence on the appropriate margin of evidence. As a result, the only evidence on this point before the Court was on behalf of the Defendant, and it was therefore accepted. Bratt highlights just how important the correct margin of error is in determining liability of a valuer, and provides helpful guidance on the Court’s approach to this.

Update

On 2 May 2025, the Court of Appeal dismissed the Claimant’s appeal against this decision. The Court of Appeal judgment can be found here.

Further information

If you have any questions or concerns about the topics raised in this blog, please contact Jemma Brimblecombe or Phoebe Alexander.

About the authors 

Jemma Brimblecombe has a wide range of experience in dealing with a variety of commercial disputes, including breach of contract, breach of trust and contractual disputes. Jemma also has experience of dealing with civil fraud claims.

Phoebe Alexander is an Associate in the Dispute Resolution team. She assists with a range of general commercial cases, as well as complex multi-jurisdictional civil fraud and asset recovery matters, and media and reputation litigation. Phoebe is also a member of the firm’s cross-practice Art & Cultural Property Law group.