What risks does a surveyor face when they take advice from a third party, and bases their survey or valuation on that advice? The point has become particularly topical in recent months, with a new arrangement for the valuation of high-rise buildings agreed jointly by RICS, the Building Societies Association and UK Finance, and the publication of the EWS1 form, due to be covered in a later article.
In the meantime, this article will provide guidance as to when a surveyor may face a claim where they have relied on the advice of a third party, and what they can do to reduce or eliminate that risk. The default position for any professional is that, in performing the service they have agreed to provide to the client they will be liable not only for their own negligence but also for that of anyone to whom they delegate the provision of those services. If a client believes that there has been an error in the survey, or that the property has been overvalued, the starting point will always be to pursue a claim against the surveyor.
However, in circumstances where independent third parties are instructed to undertake specialist tasks on behalf of the professional providing the services – for example, where the surveyor conducting a survey seeks specialist advice from a structural engineer or an asbestos consultant – then if the task to be delegated is outside the professional's normal area of expertise they can argue that they should not have any liability to the client in the event that the advice provided by the specialist is wrong.
The leading case on this is Co-operative Group Limited v John Allen Associates Limited  EWHC 2300 (TCC), which concerned an engineer who relied on specialist advice when proposing the feasibility of using a method of construction involving densely compacted stone columns for a floor in a Co-op store.
The Co-op argued that the engineer could not discharge its duty of care by relying on that specialist advice, which it said constituted a delegation of duty. The judge disagreed, and found that John Allen Associates was able to discharge its duty by relying on the specialist because it had acted reasonably in doing so.
In light of this finding, a surveyor can discharge their duty by relying on a specialist professional, so long as they have acted reasonably in accepting and adopting that advice in preparing the survey or valuation. A surveyor who seeks assistance from a structural engineer will be able to defend a claim for losses caused in the event that the engineer's advice is wrong so long as the surveyor acted reasonably in accepting, and basing any conclusions or recommendations set out in the survey on, the engineer's advice.
The question that then arises is what 'acting reasonably' means. In Co-operative Group, the court set out four factors to be weighed in the balance when considering whether it is reasonable for a professional person (for our purposes a surveyor) to rely on the advice of the third party expert.
Should the surveyor advise the client to seek advice elsewhere? Or should they themselves take professional advice under a separate retainer? Applying these criteria to the situation where, for example, a surveyor instructs a structural engineer to advise on the likely cause of and appropriate remediation for, a crack in the wall of a property, then any claim from the client concerning any errors in the survey or valuation that can be demonstrated to arise from errors in the expert's advice should fail so long as the surveyor can show that:
In order to reduce the risk of a client attempting to bring such a claim against a surveyor in this situation, the following steps are recommended.
First, surveyors should seek to include a disclaimer formally stating that they are relying on the advice of the third party, and to disclaim liability for any losses arising from the information contained in that advice. Before providing the survey or valuation, the surveyor should agree with the client that, if the surveyor seeks specialist advice on a particular point and then relies on that advice when preparing the survey or valuation, no claim shall be made against them if the advice from the expert turns out to be wrong and that error then causes the client a loss.
Second, the surveyor should always include a copy of the expert's advice with the survey or valuation, so it is clear on what basis the relevant sections of the report are prepared.
Third, it would always be preferable for the surveyor to ensure that the client appoints the expert direct, or that the expert provides some form of warranty to the client, so that, in the event it turns out that the advice provided by the expert is wrong, the client can take action against them directly without having to involve the surveyor. Even if that isn't possible, the surveyor should ensure that the expert knows who the client is and why their advice is sought, so that, even if the client cannot bring a claim for breach of contract, they can provide the necessary evidence for a claim in tort, to avoid the court finding that the only means of redress is through the surveyor.
Related competencies include: Client care, Legal/regulatory compliance