The court outlined what should happen when issues arose during valuations that could not be fully explained using automated systems.
The case involved a firm called E.Surv Ltd which had been commissioned by an American mortgage lender called GMAC to value various properties in the UK using a tick box system.
Guidance provided by GMAC stated that no additional information was to be provided by E.Surv.
GMAC later assigned some of its portfolio to Webb Resolutions, a mortgage company which specialises in buying loans. Webb then claimed that E.Surv had been negligent when surveying two properties and sought damages.
The issue centred on the use of electronic tick box systems and what happens when they don’t allow a surveyor enough scope to fulfil his legal obligations.
The judge, Mr Justice Coulson said: “I am in no doubt at all as to the general answer to that: if the valuer could not discharge his contractual or tortious obligations to GMAC without adding words somewhere on the form, or producing a covering letter to address the particular issue, then he had to take that course, regardless of the warning in the GMAC guidance notes; anything else would be a plain failure to comply with those obligations.”
The court held that by failing to go beyond the tick box approach, the survey fell well below the standard to be expected of a reasonable valuer.
Webb Resolutions were awarded damages on both properties.