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Bratt v Jones – the Court of Appeal provides clarity on the test for a valuer’s liability

May 2025

Introduction 

In a decision which will be welcomed by valuers and their insurers, the Court of Appeal in Bratt v Jones [2025] EWCA Civ 562, has agreed with the approach taken by HHJ Mark Cawson KC in the High Court (see our article here) stating that in order to prove negligence a claimant will need to show that: 1) a valuer failed to act with reasonable skill and care (the Bolam Test); and 2) the valuation provided by the valuer falls outside of the acceptable margin of error.

Facts of the Case

The claimant, Mr Bratt (“the Claimant”) entered into an option agreement (“the Agreement”) with a developer, Banner Homes (“the Developer”), with respect to a plot of land located in Banbury, Oxfordshire (“the Site”).  The Agreement granted the Developer an option to buy the Site, following the grant of planning permission, at 90% of its market value. The Agreement stated that a third-party valuer would decide the market value of the Site if this could not be agreed between the parties.

The defendant, Mr Jones (“the Defendant”), was jointly appointed by the parties to value the Site. The Claimant and the Developer instructed their own valuers to make submissions to the Defendant. The Claimant’s valuer stated that the market value was £8 million and the Developer’s valuer stated that the market value was £1.8 million.

The Defendant considered both approaches taken and determined the market value of the Site to be £4.075 million. Accordingly, the Developer exercised its option under the Agreement and purchased the Site for £3,529,500, which was 90% of the market value determined by the Defendant.

First Instance Decision

The Claimant commenced proceedings against the Defendant alleging that the true value of the Site was £7.8 million, and that the Defendant had undervalued the Site by valuing it at £4.075 million. The Claimant alleged that the permissible range would be 10% above or below the true value of the Site, i.e., between £7,000,000 and £8,600,000 and therefore the valuation produced by the Defendant was negligent.

At trial, the Claimant argued that because the Defendant’s valuation fell outside the permissible margin of error, there was an assumption that the Defendant had failed to act with reasonable skill and care. It was argued that the burden of proof would then shift to the Defendant to prove otherwise.

The Defendant argued that the Claimant needed to show that the Defendant’s valuation figure was outside the permissible range and that the Defendant failed to act with reasonable skill and care with respect to the methodology the Defendant had used. Further, it was submitted that in any event, the Defendants’ valuation was inside the permissible margin of error and therefore he was not negligent.

The judge at first instance, HHJ Mark Cawson KC, decided that the correct market value of the Site was £4,746,860 and that a margin of error of plus or minus 15% should apply. The Defendant’s valuation was within the permissible range being 14.15% below the judge’s market value figure and therefore the Defendant was not negligent.

The judge did comment that if the Defendant’s valuation had fallen outside the permissible margin of error, the Defendant would have been negligent as he had made a mistake in his methodology. If the Defendant had not made this mistake the market value of the Site would have increased by £550,000. With respect to damages, the Claimant would have been entitled to 90% of that figure, i.e., £495,000.

The Court of Appeal Decision

The Claimant sought to appeal the first instance decision on four grounds, including two which related to questions of law which are summarised below:

1. The first instance judge applied the wrong legal test to determine liability. On the basis of Merivale Moore and Legal & General if a claimant can demonstrate that a valuation is outside the permissible margin of error, it is presumed that the valuer is negligent.

Here, the Court of Appeal judges decided that if a valuer’s figure falls outside the permissible margin, this may be an indicator that the valuer was negligent, however this cannot reverse the legal burden of proving negligence. The legal burden of proving negligence in accordance with Bolam, rests at all times with the claimant. In any event, in this case, it was shown that Mr Jones’ valuation did fall within the permissible margin.

However, the Court of Appeal did comment that if a suitable case reached the Supreme Court, a different result may be seen on whether a valuation has to fall outside the permissible margin of error in order to be deemed as negligent. The judge cast doubt on whether it was correct that a careless valuer that happened to produce a valuation which just fell within the permissible range should escape any claim for losses suffered by a claimant as a result of reliance on that valuation.

In this case, the Court of Appeal was clear that the Claimant would need to demonstrate that: 1. the Defendant’s valuation fell outside the permissible margin of error; and 2. the valuation was produced negligently.

2. At first instance, the judge should not have relied on expert evidence when determining the permissible margin of error (which was decided to be 15%) and instead this should have been a question of law.

The Court of Appeal decided that the first instance judge was correct to consider the available expert evidence when reaching his conclusion that the permissible margin of error was plus or minus 15% and this is not a question of law.

The final two grounds of appeal related to the first instance judge’s approach to comparable evidence which were dismissed by the Court of Appeal on the basis that the judge’s approach was reasonable and there was no evidence to criticise the approach that was taken.

Commentary

The Court of Appeal decision will be welcomed by valuers and insurers as it provides important clarification that in order to demonstrate that a valuer acted negligently a claimant will have to show both that the valuation fell outside the permissible margin of error and that the valuer’s approach to the valuation was negligent, i.e., that the methodology used was not in accordance with reasonable practice.

As matters stand, a valuer will not be found negligent if its valuation falls within the permissible margin of error even if a claimant suffers loss as a result of that valuation. The obiter comments made in the Court of Appeal judgment are clear that in the future this approach may change if an appropriate case reaches the Supreme Court, as perhaps there is a sense of unfairness that a claim against a negligent valuer could fail simply if its valuation falls within the permissible range.

For now, valuers will take comfort that claimants will need to prove both grounds in order to succeed in any professional negligence claim.

Click here for a link to the judgment.

Beale & Co have extensive experience advising valuers and their insurers with respect to potential professional negligence claims. If you are interested in finding out more about the issues covered above or wish to understand how these apply to your contracts or business practices, please contact Jo Lewis and Priya Thakrar.

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