APC - Negligance

Question 1

There is some case law relevant to PII and discusses the Liability of individuals. What is the name of the case law?

Answer 1

Merrett v Babb
Hart v Large

Question 2

Can you please expand on your knowledge of Merret Vs Babb ?

Answer 2

• Considered if a professional employee was vulnerable to claims brought directly against them for advice given on behalf of their employers.
• Essentially, an individual provided valuation advice and was negligent. The firm the person worked for did not have adequate run off insurance, the company shut down and the client made a claim which was passed to the employee that gave the advice.

Question 3

Can you please expand on your knowledge of Hart V Large ?

Answer 3

The Claimants brought claims in negligence against the architects instructed by the previous owners, the Claimants’ conveyancing solicitors and Mr Large. The claims against both the architect and the solicitors settled prior to trial.

Against Mr Large, the Claimants alleged that he was negligent in: (1) failing to recommend a full building survey, rather than HomeBuyer report; (2) failing to draw attention to the issues of water ingress / damp in the HomeBuyer report; and (3) failing to recommend that the Claimants obtain a professional consultant’s certificate.

The key take-aways from this case:
* Being clear on the report about the scope of inspection including limitations, caveats and actions available to the client;
* Recommending justifiable further investigation;
* Taking all reasonable steps to ensure clients understand the differences between the levels of service, including the extent and limitations of each option

Question 4

Describe the term negligence?

Answer 4

Duty of care exists to clients and third parties, using a ‘reasonable care and skill’. When breached, and there is a loss, a claim for damages arises.

Question 5

What act is relevant to Negligence?

Answer 5

Limitation Act 1980
Current limitation periods for negligence are:
* Contract – 6 years from the date of the negligent act.
* Tort (Negligence)
1) Used to be prior to LA 1980 that it was 6 years from the date the claimant suffered the loss. This was unfair as sometimes they only found out about it after this period. Therefore (2) says…from 1986 an amendment was made to the LA 1980 act that…
2) Section 14A of LA 1980, provides an alternative limitation period of 3 years from the date of knowledge of the damage subject to the 15 years long stop from the negligent act. Basically it can extend from 6 years to maximum 15 years.

Question 6

How would you avoid negligence?

Answer 6

Negligence claims may be avoided or reduced by undertaking the following actions:
* Understand client’s objectives and confirm instructions in the Terms of Engagement
* Competent to undertake works
* Undertake work in accordance to relevant RICS Standards and Guidance Notes
* Make detailed file notes and take photographs
* Keep up to date with market knowledge and legislation and undertake and record CPD
Cap the professional liability excess on your PII policy in the Terms of Engagement

Question 7

What is the difference between a contract/negligence claim?

Answer 7

Breach of contract can only be claimed by parties to contract. Third party can claim negligence even if they were not part of the contract if the professional fell short of the duty of care expected

Question 8

Describe the acceptable margin of error?

Answer 8

Singer v Friedlander 1977 10%
Dunfermline v CBRE 2017 now moved to 15%

Question 9

Tell me about Merrett v Babb caselaw

Answer 9

Babb valued house in 2021 on behalf of company which went into liquidation. Court ruled merrit could sue babb individualy. This was a big shock