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Quantity Surveyors See Off Bank's £750,000 Professional Negligence Claim
Professionals are rightly exposed to compensation claims if they give negligent advice – but they are not whipping boys who can be blamed for the faults of others. The point was resoundingly made by one case in which a quantity surveying firm comprehensively defeated a bank’s claim for over £750,000 in damages.
The bank had lent money to a residential developer in respect of a project that went badly wrong. Before advancing the loan, it had engaged the firm to appraise the viability of the project. The latter reported, amongst other things, that the developer’s estimates of construction costs and time to completion were realistic.
In the event, the developer went into liquidation without repaying the loan. In a bid to recover its loss, the bank sued the firm on the basis that it would not have permitted the developer to draw down the loan but for the firm’s negligent advice.
In dismissing the bank’s claim, the Court found that the firm had exercised the degree of skill and care to be expected of competent quantity surveyors. The reality was that the cause of the loss was the bank’s botched consideration of the loan application and its fundamentally flawed decision to advance the money. In the circumstances, the bank had no one to blame but itself for its loss.