282:
construction of the agreement as a whole in its commercial setting. The contractual duty to provide a valuation and the known purpose of that valuation compel the conclusion that the contract includes a duty of care. The scope of the duty, in the sense of the consequences for which the valuer is responsible, is that which the law regards as best giving effect to the express obligations assumed by the valuer: neither cutting them down so that the lender obtains less than he was reasonably entitled to expect, nor extending them so as to impose on the valuer a liability greater than he could reasonably have thought he was undertaking.
354:
taken, the adviser must take reasonable care to consider all the potential consequences of that course of action. If he is negligent, he will therefore be responsible for all the foreseeable loss which is a consequence of that course of action having been taken. If his duty is only to supply information, he must take reasonable care to ensure that the information is correct and, if he is negligent, will be responsible for all the foreseeable consequences of the information being wrong.
346:
makes the doctor responsible for consequences which, though in general terms foreseeable, do not appear to have a sufficient causal connection with the subject matter of the duty. The doctor was asked for information on only one of the considerations which might affect the safety of the mountaineer on the expedition. There seems no reason of policy which requires that the negligence of the doctor should require the transfer to him of all the foreseeable risks of the expedition.
350:
the consequences of that course of action. He is responsible only for the consequences of the information being wrong. A duty of care which imposes upon the informant responsibility for losses which would have occurred even if the information which he gave had been correct is not in my view fair and reasonable as between the parties. It is therefore inappropriate either as an implied term of a contract or as a tortious duty arising from the relationship between them.
342:
differences between the measure of damages for breach of warranty and for injury caused by negligence, to which I shall return. In the case of liability for providing inaccurate information, however, it would seem paradoxical that the liability of a person who warranted the accuracy of the information should be less than that of a person who gave no such warranty but failed to take reasonable care.
306:, 2nd ed. (1985), p. 120, say that it would, for example, be perfectly intelligible to have a rule by which an unlicensed driver was responsible for all the consequences of his having driven, even if they were unconnected with his not having a licence. One might adopt such a rule in the interests of deterring unlicensed driving. But that is not the normal rule. One may compare, for example,
35:
318:) because the mate was in fact experienced and (subject to this one aberration) competent. The collision was not therefore attributable to his not having a certificate. The owners were not treated as responsible for all the consequences of having employed an uncertificated mate but only for the consequences of his having been uncertificated.
314:, at p. 264) by an uncertificated second mate. Although the owners knew that the mate was not certificated and it was certainly the case that the collision would not have happened if he had not been employed, it was held in limitation proceedings that the damage took place without the employers" "actual fault or privity" (section 503 of the
337:"The complaint made and upheld against the valuers in these cases is. . . not that they were wrong. A professional opinion may be wrong without being negligent. The complaint in each case is that the valuer expressed an opinion that the land was worth more than any careful and competent valuer would have advised."
349:
23. I think that one can to some extent generalise the principle upon which this response depends. It is that a person under a duty to take reasonable care to provide information on which someone else will decide upon a course of action is, if negligent, not generally regarded as responsible for all
345:
22. Your
Lordships might, I would suggest, think that there was something wrong with a principle which, in the example which I have given, produced the result that the doctor was liable. What is the reason for this feeling? I think that the Court of Appeal"s principle offends common sense because it
341:
I find this reasoning unsatisfactory. It seems to be saying that the valuer"s liability should be restricted to the consequences of the valuation being wrong if he had warranted that it was correct but not if he had only promised to use reasonable care to see that it was correct. There are of course
329:
20. On the Court of Appeal"s principle, the doctor is responsible for the injury suffered by the mountaineer because it is damage which would not have occurred if he had been given correct information about his knee. He would not have gone on the expedition and would have suffered no injury. On what
325:
19. I can illustrate the difference between the ordinary principle and that adopted by the Court of Appeal by an example. A mountaineer about to undertake a difficult climb is concerned about the fitness of his knee. He goes to a doctor who negligently makes a superficial examination and pronounces
321:
18. Rules which make the wrongdoer liable for all the consequences of his wrongful conduct are exceptional and need to be justified by some special policy. Normally the law limits liability to those consequences which are attributable to that which made the act wrongful. In the case of liability in
239:
case (often referred to as "SAAMCO") on causation and remoteness of damage. It arose out of the property crash in the early 1990s, whereby banks were suing valuers for overpricing houses in order to recover the lost market value. Owners themselves often had little or no money, since they had fallen
367:
case was to exclude from liability the damages attributable to a fall in the property market notwithstanding that those losses were foreseeable in the sense of being “not unlikely” (property values go down as well as up) and had been caused by the negligent valuation in the sense that, but for the
353:
24. The principle thus stated distinguishes between a duty to provide information for the purpose of enabling someone else to decide upon a course of action and a duty to advise someone as to what course of action he should take. If the duty is to advise whether or not a course of action should be
289:
said that he should be liable for the loss which would not have occurred if he had given the correct advice. The lender having, in reliance on the valuation, embarked upon a transaction which he would not otherwise have undertaken, the valuer should bear all the risks of that transaction, subject
252:
In the South
Australia case, a valuer had (in breach of an implied term to exercise reasonable care and skill) negligently advised his client bank that property which it proposed to take as security for a loan was worth much more than its actual market value. The question was whether he should be
281:
to ascertain the purpose of the auditor"s duty to take care that the statutory accounts comply with the Act. In the case of an implied contractual duty, the nature and extent of the liability is defined by the term which the law implies. As in the case of any implied term, the process is one of
368:
valuation, the bank would not have lent at all and there was no evidence to show that it would have lost its money in some other way. It was excluded on the ground that it was outside the scope of the liability which the parties would reasonably have considered that the valuer was undertaking.
151:
South
Australia Asset Management Corporation Respondents v. York Montague Ltd. Appellants United Bank of Kuwait Plc. Respondents v. Prudential Property Services Ltd. Appellants Nykredit Mortgage Bank Plc. Respondents v. Edward Erdman Group Ltd. (Formerly Edward Erdman (An Unlimited Company))
326:
the knee fit. The climber goes on the expedition, which he would not have undertaken if the doctor had told him the true state of his knee. He suffers an injury which is an entirely foreseeable consequence of mountaineering but has nothing to do with his knee.
52:
253:
liable not only for losses attributable to the deficient security but also for further losses attributable to a fall in the property market. The House decided that he should not be liable for this kind of loss.
293:
17. There is no reason in principle why the law should not penalise wrongful conduct by shifting on to the wrongdoer the whole risk of consequences which would not have happened but for the wrongful act.
330:
I have suggested is the more usual principle, the doctor is not liable. The injury has not been caused by the doctor"s bad advice because it would have occurred even if the advice had been correct.
277:(1874) L.R. 9 Ex. 125. In the case of tort, it will similarly depend upon the purpose of the rule imposing the duty. Most of the judgments in the Caparo case are occupied in examining the
273:
15. How is the scope of the duty determined? In the case of a statutory duty, the question is answered by deducing the purpose of the duty from the language and context of the statute:
99:
244:, so mortgage lenders would pursue a valuer instead to recover some losses. The legal principle arising from the case is often referred to as the "SAAMCO principle".
71:
398:
78:
85:
67:
528:
533:
518:
311:
286:
92:
371:
Subsequent case law has drawn a distinction between cases merely providing information, and those providing advice. The principle in
333:
21. The Court of Appeal Q.B. 375 summarily rejected the application of the latter principle to the present case, saying, at p. 404:
322:
negligence for providing inaccurate information, this would mean liability for the consequences of the information being inaccurate.
469:
118:
513:
266:
56:
310:
P. 259, in which a collision was caused by a "blunder in seamanship of ... a somewhat serious and startling character" (Sir
523:
383:), though it may be rather difficult to carefully demarcate where information ends and directed investment advice begins.
375:
cannot be invoked in cases where investment advisers specifically direct an investor to make a specific investment (see
181:
189:
315:
45:
420:
290:
only to the limitation that the damage should have been within the reasonable contemplation of the parties.
177:
497:
392:
236:
185:
278:
475:
465:
241:
17:
299:
265:
held that the valuer was not liable for the losses resulting from market fluctuations.
262:
507:
295:
193:
232:
161:
34:
381:
Aneco
Reinsurance Underwriting Ltd (in liquidation) v Johnson & Higgins Ltd
479:
285:
16. What therefore should be the extent of the valuer"s liability? The
223:
South
Australia Asset Management Corporation v York Montague Ltd
28:
68:"South Australia Asset Management Corp v York Montague Ltd"
229:
Banque
Bruxelles Lambert SA v Eagle Star Insurance Co Ltd
215:
Negligent misstatement, market values, remoteness of loss
498:'Professional Negligence: Same horse, different rider?
421:
Claims against professionals – What is recoverable?
209:
199:
173:
168:
157:
146:
138:
133:
59:. Unsourced material may be challenged and removed.
423:, published 14 July 2017 accessed 25 October 2020
399:Transfield Shipping Inc v Mercator Shipping Inc
271:
8:
464:. Cambridge, United Kingdom. p. 509.
130:
119:Learn how and when to remove this message
412:
496:Lindsay MacDonald and Catherine May, '
7:
57:adding citations to reliable sources
25:
33:
529:1996 in United Kingdom case law
44:needs additional citations for
534:Mortgage industry of Australia
519:English implied terms case law
269:gave his judgment as follows.
1:
182:Lord Jauncey of Tullichettle
500:' (20.3.2008) legalweek.com
190:Lord Nicholls of Birkenhead
550:
377:Rubenstein v HSBC Bank plc
316:Merchant Shipping Act 1894
134:SAAMCo v York Montague Ltd
18:Saamco v York Montague Ltd
214:
204:
514:English remedy case law
462:Principles of tort law
356:
339:
178:Lord Goff of Chieveley
335:
312:Raymond Evershed M.R.
524:House of Lords cases
419:Levi Solicitor LLP,
393:English contract law
304:Causation in the Law
237:English contract law
186:Lord Slynn of Hadley
53:improve this article
460:Mulheron, Rachael.
363:The effect of the
308:The Empire Jamaica
279:Companies Act 1985
219:
218:
129:
128:
121:
103:
16:(Redirected from
541:
484:
483:
457:
451:
448:
442:
439:
433:
430:
424:
417:
169:Court membership
131:
124:
117:
113:
110:
104:
102:
61:
37:
29:
21:
549:
548:
544:
543:
542:
540:
539:
538:
504:
503:
493:
488:
487:
472:
459:
458:
454:
449:
445:
440:
436:
431:
427:
418:
414:
409:
389:
361:
287:Court of Appeal
259:
250:
242:negative equity
125:
114:
108:
105:
62:
60:
50:
38:
23:
22:
15:
12:
11:
5:
547:
545:
537:
536:
531:
526:
521:
516:
506:
505:
502:
501:
492:
491:External links
489:
486:
485:
470:
452:
443:
434:
425:
411:
410:
408:
405:
404:
403:
395:
388:
385:
360:
357:
275:Gorris v Scott
263:House of Lords
258:
255:
249:
246:
217:
216:
212:
211:
207:
206:
202:
201:
197:
196:
175:
174:Judges sitting
171:
170:
166:
165:
159:
155:
154:
148:
147:Full case name
144:
143:
142:House of Lords
140:
136:
135:
127:
126:
109:September 2012
41:
39:
32:
24:
14:
13:
10:
9:
6:
4:
3:
2:
546:
535:
532:
530:
527:
525:
522:
520:
517:
515:
512:
511:
509:
499:
495:
494:
490:
481:
477:
473:
471:9781107151369
467:
463:
456:
453:
447:
444:
441:EWCA Civ 1184
438:
435:
429:
426:
422:
416:
413:
406:
401:
400:
396:
394:
391:
390:
386:
384:
382:
378:
374:
369:
366:
358:
355:
351:
347:
343:
338:
334:
331:
327:
323:
319:
317:
313:
309:
305:
301:
297:
291:
288:
283:
280:
276:
270:
268:
267:Lord Hoffmann
264:
256:
254:
247:
245:
243:
238:
234:
231:
230:
225:
224:
213:
208:
205:Lord Hoffmann
203:
200:Case opinions
198:
195:
194:Lord Hoffmann
191:
187:
183:
179:
176:
172:
167:
163:
160:
156:
153:
149:
145:
141:
137:
132:
123:
120:
112:
101:
98:
94:
91:
87:
84:
80:
77:
73:
70: –
69:
65:
64:Find sources:
58:
54:
48:
47:
42:This article
40:
36:
31:
30:
27:
19:
461:
455:
446:
437:
428:
415:
397:
380:
376:
372:
370:
364:
362:
359:Significance
352:
348:
344:
340:
336:
332:
328:
324:
320:
307:
303:
292:
284:
274:
272:
260:
251:
235:is a joined
228:
227:
222:
221:
220:
150:
115:
106:
96:
89:
82:
75:
63:
51:Please help
46:verification
43:
26:
152:Appellants
508:Categories
407:References
240:victim to
79:newspapers
480:960213287
164:, AC 191
158:Citations
387:See also
257:Judgment
210:Keywords
450:UKHL 51
402:UKHL 48
233:UKHL 10
162:UKHL 10
93:scholar
478:
468:
432:at 212
373:SAAMCO
365:SAAMCO
300:Honoré
95:
88:
81:
74:
66:
302:, in
248:Facts
139:Court
100:JSTOR
86:books
476:OCLC
466:ISBN
379:and
298:and
296:Hart
261:The
226:and
72:news
55:by
510::
474:.
192:,
188:,
184:,
180:,
482:.
122:)
116:(
111:)
107:(
97:·
90:·
83:·
76:·
49:.
20:)
Text is available under the Creative Commons Attribution-ShareAlike License. Additional terms may apply.