On 3 November 2015 the Court of Appeal handed down its Judgment in Titan Europe 2006-3 Plc v Colliers International UK Plc (In Liquidation) on the question of whether Colliers had been negligent in valuing a commercial property in Germany for the purposes of a loan.

At first instance Mr Justice Blair had determined Colliers valuation of €135million was negligent as even adopting what might be considered the upper end margin of error of 15%, the judge concluded the appropriate net rental income from the property was 8.5%; this produced a valuation of €103million.

Negligence - The Law

In order to establish negligence, a claimant must prove the disputed valuation was “one which no reasonable valuer would have reached and was outside the permissible margin of error” although even if the valuation was outside the range, the professional may escape liability if he can prove he exercised reasonable skill and care.

Taking that into account, whilst the tolerances of valuations of standard residential properties may be plus or minus 5% and one-off properties plus or minus 10%, if there are exceptional features of the property in question the margin of error could be plus or minus 15%, as in the present case.

The Court of Appeal Decision

Somewhat curiously the original Judge did not seem to have taken any account of the sale of the property that had taken place six months prior to the valuation being undertaken. This had achieved a price of €127.1million and whilst not definitive, it was a significant factor in the Court of Appeal judgment.

Taking the prior valuation evidence into account and the actual sale figure (€127.1 million) the Court of Appeal arrived at an adjusted yield of 7.4% which on a rent of €9.28million (which the valuer had been instructed to assume) resulted in what the court determined to be the correct valuation, namely €118,306,986. The court held this was a far more accurate figure than the €103million arrived at by the Judge. Accordingly, Colliers escaped liability as the valuation of €118million was within the 15% bracket of their actual valuation of €135million.


It is perhaps surprising that the actual sale of the property just six months prior to Colliers’ valuation featured so fleetingly in the original judgment as inevitably where a property has just been sold the sale is potentially the most cogent evidence of the open market value of that property.

All this might seem obvious. However it does show the importance of ensuring that clear instructions on valuation are obtained and all comparable evidence is gathered as part of the valuation process.

That is particularly so in this case as whilst the original valuation was given on 15 December 2005 it is only now (almost ten years later) that the valuer in question has finally been exonerated. By any measure, this is a very long period of time for any professional to have such a weighty and financially significant allegation of negligence hanging over them.

Philip Shaw who heads our Dispute Resolution Department deals with a wide range of professional negligence cases involving solicitors, surveyors (both valuers and quantity) and architects. He has also been involved in actions against consultants, including those responsible for design in relation to mechanical and electrical services.