Relying On A Valuation Report?

Hubbard v Bank of Scotland PLC [2014] EWCA Civ 648 The Court of Appeal has recently recognised the limitations inherent in a mortgage valuation and the limited duty of care owed by the surveyor carrying out the report.


Mrs Hubbard bought a property in 2005 with a loan from the Bank of Scotland. Unbeknown to her, the property was partly built on an infilled quarry. The Bank's surveyor, Colleys, had inspected the property and prepared a valuation report.

The valuation report noted two cracks at the property but concluded "no recent movement, no further action". However, the valuation report did not purport to be a full structural survey and through its guidance noted its limited scope, indicating the option to request a more detailed report, and suggested obtaining "independent advice" for any problems highlighted.

In 2007, after further cracks appeared, it was established that the property suffered from differential subsidence. In 2010, a structural survey was undertaken which showed progressive movement.

Mrs Hubbard claimed that Colleys' report failed to:

State that the subsidence was ongoing Advise her to seek independent specialist advice Warn her that the valuation should be substantially reduced due to cracking Findings at trial

At trial, the Claimant's expert argued that the evident cracking of a property built on sloping ground coupled with a wrap-around extension should have led to a nil value report pending a full structural survey.

The Judge rejected this, ruling that the surveyor had not been negligent, the valuation was accurate and the possibility of obtaining independent advice had been mentioned.

Mrs Hubbard appealed, stating that Colleys was in breach of its duty to warn about the risk of possible future movement.

Court of Appeal

On appeal, the issue was whether a reasonably competent surveyor providing a valuation report would have...

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