In May 2008 the Property Litigation Association produced a draft pre-action protocol for the conduct of dilapidation claims. Whilst it has not been embodied in the court rules, it forms part of the RICS Guidance Note on the subject and is considered to be best practice.
Paragraph 3.6 of the Dilapidations Protocol provides that a surveyor should include an endorsement on his schedule that:
“…in the opinion of the surveyor, all the works set out in the schedule are reasonably required… that full account has been taken of the landlord’s intentions for the property…. and that the costs, if any, quoted for such works are reasonable”.
Paragraph 3.6 has caused concern amongst surveyors that this endorsement may leave them open to claims of fraudulent or dishonest behaviour in the circumstances where such endorsements accompany schedules of dilapidations which contain exaggerated or indeed under-estimations of any required works or repairs which are subsequently found to be untrue.
In examining the potential risk to surveyors, it is important to distinguish the two different roles a surveyor may have and any existing rules or other constraints on their professional conduct.
One of the roles of a surveyor is as a “negotiator”, whereby he may be engaged by a landlord or tenant in the preparation of a schedule of dilapidations intended to be used as a bargaining resource by either party. In the preparation of such schedules, surveyors should abide by the rules contained in the latest “RICS Rules of Conduct for Members” (published 2007, updated January 2010):
- Members shall at all times act with integrity and avoid conflicts of interest and avoid any actions or situations that are inconsistent with their professional obligations” and
- Members shall carry out their professional work with due skill, care and diligence and with proper regards for the technical standards expected of them.”
The other role a surveyor may have is as an expert witness in disputes which have become litigious. In such cases, surveyors (and indeed all expert witnesses) are bound by the rules contained in Part 35 of the Civil Procedure Rules (“CPR”). CPR 35.3 states that an expert witness has an overriding duty to the court:
(1) It is the duty of an expert to help the court on the matters within his expertise.
(2) This duty overrides any obligation to the person from whom he has received instructions or by whom he is paid”
Surveyors are also more particularly instructed by the guidance produced by RICS in the “Expert Witness Practice Statement and Guidance Note”.
As well as those rules already mentioned it is important to remember that surveyors who make exaggerations or under-estimations in a dilapidations dispute could also fall foul of parts of the Theft Act 1968, or the Fraud Act 2006 (for example, s.2 Fraud by false representation).
Surveyors are under a duty to their client to provide professional advice, and must adhere to the standards required by their Rules of Conduct. As an expert witness, a surveyor must not mislead the court. It is important for a surveyor to consider carefully which of the roles he is at fulfilling any point in time, and which set or sets of guidelines apply.
Whilst it is clear that any exaggeration or under-estimation of works and repairs required in a schedule of dilapidations which is deliberately dishonest would be in breach of paragraph 3.6, this would also be in breach of the other regulations and rules which apply. Surveyors are subject to many rules and guidance notes, but it would appear that paragraph 3.6 of the Protocol does not create an additional burden of “truth” on the surveyor acting in his capacity as a either a negotiator or an expert witness.
Surveyors must also wait to see what ramifications are in store following the Jackson Report1 (published January 2010). Jackson LJ has made several recommendations in relation to prelitigation protocols, and the roles of expert witnesses. It is clear that the full implications of paragraph 3.6 are far from set in stone.