Smith v Bush [1990] 1 AC 831

House of Lords

Basic Facts: S bought a house with a mortgage. The building society’s valuer provided a report with a disclaimer. The chimney, which was not inspected properly, fell, causing damage.

Issue for the Court: Can a disclaimer of liability protect a valuer from being liable for negligence?

Held: In the first case, the Defendants' appeal was dismissed, and the Plaintiff's judgment was upheld. In the second case, the Plaintiffs' appeal was allowed, reversing the previous decision in favor of the Plaintiffs. The House of Lords held that a valuer engaged by a prospective mortgagee owes a duty of care to the mortgagor, especially if the mortgagor is likely to rely on the valuation without obtaining an independent survey.

• Lord Templeman (dismissing the appeal):

• Common law imposes a duty of care for accurate reports.

• Unfair Contract Terms Act 1977 limits the effectiveness of disclaimers for negligence.

• The disclaimer was unreasonable in this context.

• Lord Griffiths (dismissing the appeal):

• A disclaimer is valid if it is fair and reasonable.

• Factors like bargaining power and practicality influence the reasonableness of a disclaimer.

💡 Levelup : The case underscores the importance of duty of care in the surveying profession and the limitations on excluding liability through disclaimers.