A surveyor's or valuer's report is a statement of professional opinion prepared for a purpose the surveyor knows about. That fact sits inside the framework laid down in Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465. When a RICS-regulated surveyor signs off a Homebuyer Report, a Building Survey, a mortgage valuation or a Red Book valuation, they are assuming responsibility to somebody. The interesting question is rarely whether Hedley Byrne applies; it is who the surveyor has assumed responsibility to, and whether any disclaimer can lawfully cut that duty off.
For background see Hedley Byrne v Heller and assumption of responsibility. The Caparo overlay for the surveyor-lender relationship is covered in Caparo for surveyors and lender duty.
The Hedley Byrne conditions — a special skill, a statement made in a professional context, known reliance, and reliance in fact — are satisfied by the ordinary act of producing a survey or valuation. The surveyor holds themselves out as competent. The report is not casual advice. The recipient is identified. The purpose is stated on the face of the instruction. Where the client commissioned the report, the duty in tort runs alongside the contract. Where the report is passed on, or produced for one party but relied on by another, the harder questions begin.
The leading authority on third-party reliance in the residential context is Smith v Eric S Bush [1990] 1 AC 831. A surveyor instructed by a building society to value a modest house knew the report would be shown to and relied on by the prospective purchaser. The House of Lords held the surveyor owed a duty of care to the purchaser despite a disclaimer.
That approach was applied in First National Commercial Bank plc v Loxleys [1996] EWCA Civ 1383, which confirmed that a disclaimer forms part of the factual matrix but remains subject to UCTA reasonableness where it purports to exclude a duty that would otherwise arise. Boilerplate exclusions cannot side-step a duty the courts consider foreseeable and fair to impose.
The extension is not open-ended. In Scullion v Bank of Scotland plc (t/a Colleys) [2011] EWCA Civ 693 the Court of Appeal held that a surveyor valuing a buy-to-let flat for a lender did not owe a duty to the buy-to-let purchaser. The purchaser was a commercial investor, not a first-time residential buyer of modest means, and could reasonably be expected to commission independent advice. The Smith v Eric S Bush logic did not travel across. The older Yianni v Edwin Evans [1982] QB 438 line similarly turned on the factual reality that in a modest residential setting the purchaser relies on the mortgage valuation whether the lender likes it or not. Outside that context the duty is narrower.
Worked example — illustrative only. A hypothetical RICS surveyor produces a Homebuyer Report addressed to Buyer A for a mid-market residential property. The report contains a clause excluding liability to any party other than the addressee. Buyer A shows the report to a prospective lender to negotiate a mortgage, and the lender relies on the valuation in agreeing terms. The valuation later proves negligently high and the lender suffers loss.
Applying Smith v Eric S Bush, the disclaimer is not decisive. The court would ask whether excluding third-party reliance was reasonable under UCTA on these facts. Where the surveyor knew, or ought to have known, that lenders commonly rely on such reports, and where the class of person relying is narrow and identifiable, the disclaimer may fail the reasonableness test. Hedley Byrne liability to the lender then stands.
Surveyors, valuers and quantity surveyors are among the professions where third-party reliance is a routine feature of daily work. A single report may travel to lenders, sub-purchasers, funders and legal advisers. PI notifications frequently involve a claimant who was not the surveyor's contractual client. Firms relying heavily on disclaimers should assume the disclaimers will be tested against UCTA, and that in modest residential contexts they may not hold. The broader sector context is discussed in the pillar guides on surveyors PI insurance, quantity surveyors PI insurance, and property managers PI insurance.
Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority. Firm reference number 724952. This entry is general information, not advice on any particular policy.