Scullion v Bank of Scotland plc (t/a Colleys) [2011] EWCA Civ 693

Citation

• Full case name: Scullion v Bank of Scotland plc (trading as Colleys)
• Neutral citation: [2011] EWCA Civ 693
• Court: Court of Appeal (Civil Division), England and Wales
• Judgment date: 17 June 2011
• Subject: valuers’ duty of care in tort; scope of duty; professional indemnity

Facts

Mr Scullion, a builder by trade, bought a flat as a buy-to-let investment. The valuation on which the transaction proceeded was carried out by Colleys, a valuation business trading as part of Bank of Scotland, on the instructions of the lender.

The valuation put the capital value of the flat at £353,000 and gave a rental figure of around £2,000 a month. The rent the property could actually command was materially lower. Mr Scullion said he had relied on the rental figure in deciding to proceed, and sued the valuer in negligence in respect of the rental valuation rather than the capital value.

At first instance the judge held that a duty of care was owed to Mr Scullion in respect of the rental valuation and awarded damages. The valuer appealed.

Issue

Did a valuer instructed by a mortgage lender owe a duty of care in tort to the borrower where the purchase was a buy-to-let investment rather than the acquisition of a home for the purchaser to live in?

The claimant relied on the established line of authority under which a lender’s valuer owes a duty to a modest residential owner-occupier purchaser who is likely to rely on the valuation rather than commission an independent one.

Decision

The Court of Appeal allowed the appeal and held that no duty of care was owed.

Applying the familiar tripartite approach to duty of care, the court concluded that it was not fair, just and reasonable to impose a duty on the lender’s valuer in favour of a purchaser acquiring the property as a commercial buy-to-let investment. The owner-occupier authorities rested on the very high probability that an ordinary residential purchaser of a modest property would rely on the lender’s valuation and would not obtain advice of their own. That reasoning did not transfer to buy-to-let, where the purchaser is making an investment decision and is more likely to be expected to take independent advice.

Absent something in the dealings amounting to an assumption of responsibility to the purchaser, the lender’s valuer’s duty ran to the lender who instructed it.

Ratio decidendi

A valuer instructed by a mortgage lender does not, without more, owe a duty of care in tort to the borrower where the underlying transaction is a buy-to-let purchase. The line of authority imposing such a duty in favour of purchasers of modest owner-occupied homes is founded on the likelihood of reliance in that particular market and is not to be extended by analogy to investment purchases.

Why it matters for insurance

Surveyors’ and valuers’ professional indemnity claims are, in volume terms, dominated by lender-instructed valuation work. Scullion matters to that book because it draws a line around who can sue. Where the claimant is an investor rather than an owner-occupier, the existence of a duty is a live question rather than an assumption, and that affects how a notified circumstance is reserved and defended.

For the insured firm the practical lessons are about the file. The purpose of the instruction, who the report was addressed to, what disclaimers and reliance wording were used, and whether anything was said directly to the purchaser are all facts that determine whether a claim gets off the ground at all. Those facts live in the valuation file, which is why retention periods and file discipline are part of a surveying practice’s risk management, not just its administration.

It is also a reminder that professional indemnity is written on a claims-made basis. A valuation carried out years ago is answered by the policy in force when the claim is first made and notified, with that year’s limit, excess and exclusions — which is why continuity of cover and run-off arrangements matter so much in this sector.

See also

• Smith v Eric S Bush — the House of Lords authority on a lender’s valuer owing a duty to an owner-occupier purchaser
• Yianni v Edwin Evans & Sons — the earlier first-instance decision on the same duty
• Caparo Industries plc v Dickman — the restated test for a duty of care in negligence
• Merrett v Babb — personal liability of an employed surveyor where the firm’s cover had gone

References

• Scullion v Bank of Scotland plc (t/a Colleys) [2011] EWCA Civ 693 (Court of Appeal, 17 June 2011)
• Smith v Eric S Bush [1990] 1 AC 831
• Caparo Industries plc v Dickman [1990] 2 AC 605

Frequently asked questions

Does a lender's valuer owe a duty to a buy-to-let purchaser?

On the facts of Scullion, no. The Court of Appeal held it was not fair, just and reasonable to impose a duty of care on a valuer instructed by the lender in favour of a purchaser buying as a buy-to-let investment, and declined to extend the owner-occupier authorities to that situation.

Did Scullion overrule Smith v Eric S Bush?

No. It distinguished it. Smith v Eric S Bush remains the authority for the duty owed to a purchaser of a modest home who is likely to rely on the lender's valuation. Scullion decided that the reasoning behind that duty does not carry across to an investment purchase.

What does the decision mean for a surveying firm's PI cover?

It does not change the cover, but it changes how some claims are assessed. Whether a duty was owed to the person suing turns on the purpose of the instruction, who the report was addressed to and what reliance wording was used, so the valuation file is often decisive in defending a claim.

This page is insurance information for UK businesses, not legal advice. It summarises a reported judgment and explains why insurance buyers and brokers refer to it; it is not a substitute for reading the judgment or taking advice on your own facts. Case summaries are necessarily short and omit detail. Position stated as at August 2026.

Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority (FRN 724952). This page is general information, not advice on a specific policy.