Episode 40: The Changing Trends of Negligence Claims in Surveying with Nik Carle, Browne Jacobson LLP

The following transcript is autogenerated so may contain errors.

Matt Nally: On this week’s episode, we have the return of Nick Carle from Browne Jacobson, who came on in one of our previous episodes.

And we’re going to, we’re going to catch up again and look at some some different angles. So thanks for coming on today.

Nik Carle: I’m very pleased to be back, Matt. Thanks for asking me on.

Matt Nally: No, it’s a pleasure. I think the last episode had some yeah, some good traction, people enjoyed it, I think. So I thought it’d be interesting to catch up and see how things have shifted perhaps since since we last spoke probably around a year ago now.

I suppose the focus of today’s episode is the sort of changing trends of negligence claims in surveying. Cause we very much covered negligence claims in the last one. I suppose before we jump straight into that for anyone that, that. Hinted on it, but if anyone that didn’t watch the first episode that we did together, do you want to just introduce yourself briefly and what your [00:01:00] background is?

And then we can launch, into negligence claims and the home survey standards.

Nik Carle: Yes, of course. I’m a litigation solicitor. And really for about 25, 30 years now, I’ve been specializing in professional liability claims against property professionals. So it’s quite, quite a focused practice area for me.

And I started out doing claims against surveyors and valuers in the mid 90s and have kept a consistent practice going for all these years and it’s been really interesting to see how that That category of litigation has has developed over these decades now.

So I’m

Matt Nally: I can’t imagine that

Nik Carle: it’s been there’s been peaks and troughs but it has been it has been a regular area for claims. And it’s been. It’s been a very [00:02:00] interesting practice to, to be involved in so day in, day out, I am advising surveyors and valuers on risks in their professional activity and very often dealing with them with cases in, in court going to trials going to hearings and representing surveyors.

I should say I do some work on the claimant side, but most of my work is on the defendant side. So acting for surveyors and valuers But it helps to see both sides of the of the fence very much.

Matt Nally: Oh, definitely. And then, cause then you can understand the, yeah the mindset on each side, the pitfalls on each side and what’s going to help each other out.

But and I think in our first episode that we did together, we talked more about the realities around the process and how to protect yourself more. I think this one’s going to be interesting because we’re going to start coming on to specifically how they work within the home survey.

sort of standard. And then some case studies I think you mentioned we’ll touch [00:03:00] on.

Nik Carle: Yes, maybe today Matt we’ll look more at what happens when when disputes do develop into a, to a claim. I think last time we concentrated more on the on the initial stages when that first complaint comes in, and we talked a bit about how surveyors could mitigate the risks of a claim coming up and what they could do to protect themselves at the outset, at the front end.

And maybe without wishing to scare anyone too much, we could focus a little bit more today on the back end and what happens when cases do develop into to full on court litigation and trials and things like that.

Matt Nally: Definitely. I think of anything, it’s not, you’re right. It’s not to scare.

It’s take the lid off and show what the reality is behind it. And then learning from those those previous cases, you can help prevent those types of things in your own practice. So yeah, very useful. Should we start [00:04:00] with I suppose the home survey standards specifically, I know there’s going to be a shift soon, but there’s a review of the moment going on with the home survey standards and how that might change should we touch on yeah, the potential for negligence claims with, the current standards and where you think that might go with as the standards change?

Obviously, we don’t know what the standards will be yet, but that might be a starting point.

Nik Carle: Yeah, I think that the home service standard is really interesting and if I maybe give a perspective from a lawyer’s, from a litigation lawyer’s viewpoint as to why the home survey standard is so important.

And the reason is that it provides a, essentially a framework. It’s a way to benchmark a surveyor’s activity. So when cases do arise in court the home survey standard is it’s Is used very much as a blueprint for what should have been done. So if there’s often what claimant lawyers [00:05:00] will do is to compare the actual activity and the performance of the job with what the home service standard required. And if there are any gaps there that does give The claimant an opportunity to seize on those and to rely on them as being an an element of negligence or alleged negligence.

It’s It’s it is. It is important in that sense, and to comply to make sure you comply with the detail of the standard, and I think it’s a good we talked about. We just referenced earlier what you can do to protect yourself and being knowledgeable and familiar about the standard.

We’ll very much we’ll very much assist you. So it’s quite important.

Matt Nally: Yeah. I’ve got an interesting question that I’ve got from that then is if you, let’s say, the home standard really well you’ve reviewed it. You’ve. Taking your interpretation [00:06:00] of what it’s asking for is it fairly clear cut?

Do you think in terms of what you’re expected to do or are there areas that are open to interpretation at the moment, at least, and therefore that’s where claims would come from? Or is it more the claims come from actually there was something clearly wasn’t followed rather than it was a change in interpretation?

Nik Carle: I think I think it’s, I’ve identified probably three or four flashpoint areas that I can see are are particularly susceptible to to surveyors falling down, I think. But it’s a good idea to. To just have some broad familiarity with it, it’s probably a bit much to carry the thing with you when you’re out.

We’re out in a job. That would be too much to expect, but there are different areas of emphasis in the standard that I think, um, it might be helpful just to go through those those sorts of flash points I’ve identified, I’m just going back to bring it up if I can [00:07:00] on my screen and then we can we can just point those those sections up.

Definitely. I think part of the reason I asked just for context is we did another episode around understanding requirements of level threes, and there’s some terminology which potentially you’ve read. Or if you look at dictionary definitions, it could be read as, there’s less requirement in the level three than there is the level two or something like that.

Matt Nally: Yes. Yeah, that’s why I wondered whether some of these areas are pitfalls because it’s terminology and how it’s interpreted.

Nik Carle: Yes. And I’ve watched that episode. It was Tim Kenny, wasn’t it? Did that, and which I thought was a really useful session on that. And I know that Tim referenced during that talk.

The heart and large decision, of course, which was which I think predated the home service standard. But one of the points that Tim was making is that the home service stand is not perfect by any means, but it’s a [00:08:00] lot better to have that kind of framework in place as opposed to what went before. So it’s a much improved.

Situation. And it’s it’s much clearer in that sense that some that it’s a lot. A lot of work went into the to the first edition of the standard. And as she said, it’s now currently under review for 2024 25, so it will be interesting to see. What’s what feedback really takes hold in the next edition.

Matt Nally: There’s no perfect standard for anything, even if you get it perfect for right now, the environment you’re working in changes and so it’s always going to have to be iterated.

Nik Carle: Yeah, exactly. And I think the standard, it was created, what was it, 2019 and then came into force, I think it was 2021 in the midst of COVID.

And so it [00:09:00] had a kind of a splattered start and a kickoff. And you’re right. Things do change and we’re four, four or five years on now, so you would be expecting a significant update at this this staging post.

Matt Nally: Yeah, I think definitely.

So yes, we come on to the sort of, yeah, the areas you’ve identified this.

Nik Carle: Yeah, I think this is just my view, and I should say, I’m not aware of any cases yet in court that have specifically highlighted the the detail of the home service standard. But. This is my prediction for what’s likely to be the substance of any claims that come through.

As I say, I call them my sort of flashpoint areas or pitfalls really to look out for. So the first one, Matt, was, um, just about the the surveyor’s qualifications and [00:10:00] experience. And this is in section two of the home survey standard. Um, and the thrust of the emphasis here is that the the RICS member, the surveyor, Must have.

sufficient qualifications and experience to be able to deliver the services in question, and must really have the requisite knowledge and credentials and confidence to be able to take the job. Now there’s been a lot of historic court cases on this theme, which is why I identify it, why it leapt off the page.

Heart Enlarges kind of touches on this as well. It’s about the surveyor really asking themselves whether they are, whether this is within their comfort zone, [00:11:00] this particular job that’s coming along. Um, Where it often comes up is, for instance, if you’ve got if your bread and butter is doing uh, reasonably, um, standard inspections of more modern property, for instance.

Within a particular valuation plan, a band maybe of reasonable complexity, but anything that’s unusual and heart and large was a very unusual property. I think it was on an island or something. It was very unique And the surveyor there really should have stopped and asked himself, should I really take on this?

It’s this job. So it could be complex property, heritage property any sort of complexity that you’re. That you’re going to have to stretch yourself into is a [00:12:00] danger territory from a claims point of view.

Matt Nally: And it’s a difficult one because you might want to branch out into an area.

So it’s how do you transition to make sure you’ve done enough shadowing or working alongside someone to know that you’ve built that. Minimum level up to justify taking on a sort of more normal, more unusual case. Sorry, on your own. So that’s, it must be a tough one.

I think that’s right. And in the cases that have gone before there’s even been one I can remember where the it was a really big for an outlet center retail center out of outta town it was a valuation job, this one. But the severe concerned had.

Nik Carle: Just not had any prior experience, but they wanted the job because it was a big fee. And it was an interesting new area to to delve into and to develop their practice. So they took the job and then they took the view that they could just learn on the job and that this, once they had done this first one, that would enable them to build a business and build their [00:13:00] offering for.

For future opportunities but they did come seriously unstuck because they just didn’t know the market didn’t have enough of a a base understanding to do a proper job. And that was a multi million pound error that was made, but so the principle does cut across to all cases, and it’s emphasized in Section 2 of the Home Service Standard that you really must have that knowledge and ability, both in relation to the property and The locality as well locality is something that again is really highlighted in the home service standard.

So I think that’s on that. No, one of the difficulties is if you move home, so you used to live in I don’t know Kenton, you’ve decided to move to Wales. Suddenly you’re same time, but so you understand properties but the location’s completely changed. So yeah.

Matt Nally: How do you manage that transition? So there’s things to think [00:14:00] about there.

Nik Carle: Yes, exactly. And it’s not an optional thing in that requirement in the home service standard. It says. In section 2. 2 that RICS members must be experienced and able to deliver the services. Members must be familiar with the nature and complexity of the subject property type, the region in which it’s situated, and the relevance to the content.

Subject instruction. So if you don’t have that, you should not. You must not take on the job. For the reasons you said, Matt, that’s, can be quite a difficult decision to make, but that’s. What the standard requires because you can

Matt Nally: sympathize with the logic that you mentioned, which is if I take this on, I can progress my business.

I’ve learned something new, but the problem is you don’t know what you don’t know. So you don’t know what you’re missing. You can think that you’re putting something good together, but can [00:15:00] you get around, not get around it, but I suppose what I’m trying to say here by get around it by you take on that work, but you bring in a consultant.

To work alongside you that has that knowledge that mitigate that

Nik Carle: I think that’s a good idea. Yeah, because generally I think it’s to be encouraged that you do that. You do constantly build your knowledge, build your expertise, build your capabilities as you develop in your career. And you’re right thinking about.

different ways in which you can still stay the right side of the standard, but achieve that progression in your abilities and repertoire I think is definitely to be encouraged. So that’s a good, that’s a good option to bring in a consultant alongside.

Matt Nally: Options is a better word for it.

Yeah. Yes. I’ll use that one next time. That’s an interesting one. And so what are the flashpoints have you seen?

Nik Carle: I’m part of just before we move away from this idea about you knowledge and [00:16:00] locality. This is a again a kind of a similar theme, but section three of the home service standard also talks about locality and 3.

1 says again. RICS members must be familiar with the type of property to be inspected and the area in which it is situated, and this is really concerned with pre inspection research, which, again, I think is a, is an area that has potential to, to sprout claims and complaints. If. This idea of pre-inspection.

So before you even go out to site, to the property that you have done some desktop checking. Again, you must have the base level of knowledge about the property. So [00:17:00] you should not be continuing if you don’t have that base level of know knowledge. So this is assuming you do have the requisites, but.

Even if you do, you still need to carry out the appropriate pre inspection research. And again, this is mandatory. My instinct is it’s maybe not been very closely observed As a requirement on a day to day level, but I don’t know. That’s just a, that’s just a sense I have.

Matt Nally: Cause you can, yeah, you can imagine someone gets busy.

They’ve run over from previous appointments the day before they’re catching up and then they get, they don’t have time to do the pre research. They get there. And then maybe do it post inspection. Yes. They’re ways that. People can evidence or surveyors can evidence that they have done that research in advance because, I suppose one example, you’ve taken a screenshot, usually that’s date and timestamp that might be a useful way, but I’m wondering if there’s, are there other ways people might [00:18:00] do research in a way that doesn’t necessarily give away when it was done, i.

e. they tried to defend later that they did do it in advance, but there’s no real evidence of when it occurred.

Nik Carle: I think if, I think, if you have a uh, quite ingrained methodology that, that’s in every case in every job that you do have, if you’re very familiar with the market and the type of property, then The amount, the extent of pre inspection research you’re going to need to do is probably quite limited, but you still need to at least check that you’ve or check that box, as it were.

As to how to evidence it, I think I think if there’s some sort of electronic record or some sort of tracking that could automate that it’s been that it’s been done. Maybe, as I say, just it just a sort of check a check box that that indicates it’s been done from an audit trail point of view is helpful.

Ultimately it’ll come down to the surveyor having to [00:19:00] give a witness statement in court and explaining what the process actually was, and that witness evidence will have to be truthful that’s what it comes down to ultimately.

Matt Nally: Yeah true. And I guess if you’re, if you are taking screenshots and all, other things in your fight, you’re storing those, you’ll have a creation date usually on a document, wouldn’t you?

Something like that. So there should be ways of proving that as well, but yeah.

Nik Carle: Yeah. So it’s a pre inspection. Research, I think is really is really important not from a back covering point of view, but as part of the whole picture of making sure that the that the survey product is a really comprehensive one and that it starts before you leave the office effectively.

Matt Nally: I think it’s, yeah, it’s giving you that context before you get there. Rather than going in blind. So you’ve got certain giveaway things that you can look for as soon as you turn up, if it’s, I don’t know, clay soils, you can look for certain types of shrinkage or bulge or whatever it’s called that might be affecting the property.

So [00:20:00] without that you might forget to look for those Types of things. You haven’t had the flag beforehand.

Nik Carle: Yeah, that’s right. You’re pre warned and you’re alert to potential issues before you even arrive. I think that’s a good way to put it. The one kind of topic where this has come up already a few times is on Japanese knotweed.

And the type of inspection research that we’re talking about here is heat maps and things for where knotweed is more prevalent in the country than than in other areas like South Wales, for instance, is notoriously or notorious for prominence of knotweed. But again, if you’re familiar with your market in which you’re operating with your catchment area, you should know that already.

You want to have access to your heat maps. And then this really brings us onto another kind of section of pre inspection inquiries, and that’s really getting information from the seller and or from the [00:21:00] agent. And this is dealt with in 3. 2 of the Home Service Standard.

And that says where relevant and practical the owner and or the seller or their agent should be asked to provide appropriate information. And it goes on to talk about, previous alterations, repairs, improvement work planning permissions any relevant guarantees and warranties and I think, yes, not, so not weed is given a special mention in this section.

And also about sort of neighbor disputes rights of way, and this is where you get a an overlap with the what would be inquiries of the seller. So that’s the conveyancing. The conveyancer would usually pick up some of these things, but there is. There is a definite blurring of what’s down to the surveyor to establish and what’s, [00:22:00] what can be left to the conveyances or the solicitors to, to sort out when the transaction is going through.

But again, this is an area of emphasis in the home service standard and I think it’s yet another area that could translate into claims. It’s a good way for surveyors also to be on their guard and they can, if by asking more questions of the agent or the seller or the occupier, It pushes potential responsibility away from the surveyor and into or over to the the seller or the agent or the solicitor potentially.

So that’s a good kind of deflecting tactic to protect yourself is to ask us as many questions as you can.

Matt Nally: It’s interesting when you contrast this with the home report. Process up in Scotland the property questionnaire [00:23:00] outlined or covers most of those aspects. And it’s the, obviously the property vendor that’s having to or the seller that’s having to fill that in.

So it does take a lot of the onus off or the workload off having to go and find that information because they’re required, the seller is required to provide that in a document. Yes. So yeah, versus here, where you’ve got to try and encourage people to hand over information where they’re not.

Not necessarily forced as part of the surveying process normally.

Nik Carle: Exactly. So again, the way this is, this plays out in court is that for cases that have a feature like this, Both, both the surveyor and the seller can get sued at the same time. And you have to decide how the responsibility for this is a portion between the two of them.

So you’ve got two defendants there not weed again, just to mention it it keeps coming up, but there’s been a few cases about Sellers or [00:24:00] owners concealing the existence of knotweed or concealing from the surveyor, um, other defects that might be at the, might be at the property. So if the surveyor has asked the question and then got and then got a reply in the negative nothing to worry about on that score, then the surveyor should be.

In the clear on that aspect. So it’s, as I say, it’s a really good it’s a really good thing to remember as a protective tactic and to be on your guard as ever.

Matt Nally: That’s a nice take away on that point. Actually, if you put the right type of process in, you can have a document that gets sent to the vendor or the agent on booking.

I suppose the only thing with that is it’s one thing to send it, you think, or to make sure you follow up and. And get that back with the information and otherwise it’s just a missed opportunity,

Nik Carle: yes, but even having it having that as a as an attempt to, um, to focus on [00:25:00] these sorts of questions and it could.

All you can do is, you can’t force out an answer. And I guess it’s, um, there’s a degree of reasonableness that overlays this requirement you can only do so much, but something like that, as you suggest Matt, is a good way to um, bake it into the, to the process as, as far as you can.

Matt Nally: Yeah, definitely. Definitely. I think a theme that you touched on earlier, which is it’s all about having a methodology, a process that you can evidence when you need to show that you are taking reasonable steps to do your initial, initial pre inspection work, or you’re asking those types of questions.

It’s all about consistency and processes, which we touched on last time, to be fair, actually.

Nik Carle: We did. We

Matt Nally: talked about that.

Nik Carle: Yeah. It’s very important. I’ll just before moving off this idea of the sort of pre inspection research there’s a, again a major highlighting of Appendix C in the Home Survey Standard, which is all about the location of the [00:26:00] property from an environmental perspective.

Or the sort of environmental impacts of the property or the locality. So you’ve got the usual clear environmental considerations, which we all know about, flooding and geological and soil conditions and things like that, mining activities. But it also. Touches on climate, which, and sustainability, which is very much for the last few years has been an increasingly important theme.

There haven’t been any cases that I’m aware of on this, but in terms of a, of another flashpoint hot topic area for potential claims. I think climate is really. Important climate and energy saving considerations I think that needs to be something [00:27:00] that’s really brought to the fore in reports as the survey standard, um.

Develops over time. We talked about, how things are different from 2021 to 2025. Climate is going to be. It’s not. It’s not a theme that’s going to die back. It’s going to go the other way. So Appendix C will, I’m quite sure, remain in the new survey standard when it’s released and probably be expanded.

Matt Nally: Yeah, I think that’s probably a fair fair assessment. I think the, we did a podcast episode as well with Kate Jarrington and we focused very much on part of it was on yeah, quality of home reports and so on, but there was, we did do a topic on what’d you call it? The, yeah, the environmental aspects and making sure that you’re reporting on that in the right way.

Nik Carle: Yes.

Matt Nally: Um, and I think it’s possibly an area that’s easy to. There’s so many new products coming out, new materials, new technologies that can impact how a how it [00:28:00] operates, works. It’s important to try and keep up to date with those, that bit, that information in order to be able to report on it in the right way.

Nik Carle: Yes. And there’s a real sense that from consumers perspectives, the that’s a big part, a crucial part of their buying decision. How how energy efficient the property is how the location of the property, is it, again, in climate terms, how with the changing climate how is this specific property going to fare over.

The lifespan of the of their ownership, and these are really. I think there’s been quite a bit of research on this, but these are really top of the list or near the top of the list in what informs the the buying decision and cost of the property in energy terms with energy prices currently being so so high.

So bound to be an area that will need to return to, I think, in coming [00:29:00] years.

Matt Nally: Yeah, definitely. And it’s, cause it’s hard to imagine otherwise as a consumer, how how the cost of maintenance might change as, environmental factors the change value, increasing wind and rain and sun and all that type of stuff will change how the ground operates around the house or the trees or the guttering or whatever it might be.

Yes. I’m sure that’s right. I’m sure that’s right.

Nik Carle: And no doubt, like everything else, it will be. if there’s any sort of failing by the surveyor to give insufficient attention to these kind of issues, then that is going to translate into into claims. But I think this is more for the later part of this decade that we might some really future Looking by quite a number of years, but it’s definitely worth mentioning.

Now there’s still quite early stage.

Matt Nally: Yes

Nik Carle: definitely true. So my next flashpoint matters. It is a familiar one. I’m sure I know that. Tim [00:30:00] Kenny touched on it as well in his podcast. And it’s further investigations. A very sort of vexed topic and again, one that there’s been an array of court cases on and further investigations is 4.

9 of the home survey standard.

Matt Nally: It’s a hot topic this one because it’s where are you covering yourself? Where are you not giving the right information to the customer? Where are you? Yeah. I’m interested to hear what you’ve got to say on this one.

Nik Carle: Yes. I think, um, the working party that put together the original edition of the home service standard were very switched on to how difficult things have become because of.

This uncertainty about further investigations, and you can see this in the language that’s used in the home service standard. It says, um, that the RSS member, the severe should exercise professional judgment and must not again mandatory must not call for further [00:31:00] investigations only to cover him or herself against future liabilities.

And. I hear this all the time, that I hear this this almost constant anxiety about the prospect of a claim. There’s so much worry about that happening, of being liable, of having, of ending up in court, that it becomes almost Crippling in terms of trying to do a, a fulsome job for the for the client and what you tend to get in.

Historically, this is always the case. You got reports that were so laden with caveats and again back covering that the report often was of no use. To to, to the consumer or the client and a very common way to get yourself out of this situation and say, [00:32:00] Oh you might want to just bring in a specialist here or make some further investigations there.

So the home service and really try to cut that. Down and say, and it again, it’s it’s very clear that you must not do that as a means to just protect yourself from liability. That’s not a good or professional approach to adopt at all. Is

Matt Nally: there guidance do you think on where the balance is?

Because I suppose, you can, there’s some that might make sense and the grounds heavily dipping around the drains, you might want to get a CCTV train survey to establish if it’s cracked and broken because obviously can’t see that might make sense. But when it comes to.

Like the electrics, for example, they’re not, surveyors aren’t qualified electricians, so they’re not going around checking all the electrical points and everything else they can do a visual. So again, do you put in a a seeking electrician’s advice on that? Or I suppose where do we draw the line on what’s.

Nik Carle: That’s the nub of it. I don’t think with having the the home service standard up and running now for the last three, [00:33:00] four years. I don’t think there’s a clear sense of where that balance is.

It’s really difficult and there’s no clear answer, but it’s a matter for each surveyor’s professional judgment. And there are different views on that. You can be more cautious and recommend more, or you can be more robust And, maybe even speculate and try to restrict the recommendation of further investigations there will be quite a kind of generous allowance for both approaches, I think for the cautious and for the more robust because remember that these cases tend to get some resolved by reference to expert evidence.

So you’re generally safe if an expert would say look, this was a decision that a significant number of surveyors in the same sort of area would [00:34:00] very reasonably have made or decided on. So you’re protected, you’re within that sort of broad standard, you’ll be fine and not negligent.

Matt Nally: Yes, I think it’s about, as you say, finding a balance with if you’re giving too many general caveats, there’s no reason to suspect something, the drains look, the ground looks fine above the drains, it’s not dropping away there’s no real reason to suggest. Getting an expert, an expert into to check that.

So that becomes a reasonable, I think. And you’re right. It’s about ensuring as an industry, it doesn’t become to a point where consumers go, there’s no value in. The majority of home surveys, I’m not going to get one because then the industry can’t operate then you have to have a report that someone is confident to put out there saying, yeah, this is what I’ve seen.

This is a true reflection of now and you don’t need to go and get 10 other people in after me. Maybe just one for that area. A lot of it, I think

Nik Carle: is about. Confidence is a good word. Professional confidence. You’re qualified, you’re trained, you’re able to do this. [00:35:00] Just do it. That’s what you’re being paid for.

Even if you’re wrong, that doesn’t necessarily mean you’re negligent. You need to be really trained. Seriously off the pace and off the mark to be found negligent. So it is just about having more confidence when you’re reporting in your in your abilities and your training.

Matt Nally: That’s just, should we touch on that point then, where the line goes between. Something being wrong and something being negligent. I think that’s probably, that possibly will help people understand why, where the reality is full and how worried do they need to be day to day when they’re giving a confident opinion,

Nik Carle: yes. There is a difference in this context between making a mistake and being negligent. It’s quite a big difference. Actually. It’s hard. It’s hard to be negligent. But you’re only negligent if. You make a mistake that no other ordinarily competent surveyor would have made in the same circumstances.

So it’s this idea [00:36:00] of a professional body of surveyors. If a good number of that professional body would have reported or inspected in exactly the same way or in a comparable way, then you’re safe, albeit you’ve made a mistake. It’s not negligent for that reason, so you’re within this within the standard.

But if you were to ask this professional body and say would anyone have reached this decision on in these circumstances on these facts at the time with this type of property? And if no one puts their hand up, then that’s an indicator that you’re very probably. Negligent. And the way you the way the judges reach a decision on these questions is by relying on expert witnesses.

So expert witnesses come along and speak as to what the body of professional opinion is [00:37:00] saying. about this particular aspect or decision that was made. So that’s the difference between just making a mistake and actually being negligent and liable in court. Really useful to know that, I think. Yeah, and that context gives you a bit of more confidence to put things into reports and not have to caveat because you understand.

Matt Nally: Yep, I think. Most people would come up with the same conclusion. That’s safe to go. Yeah, it’s a kind of

Nik Carle: like a safety in numbers type of mindset, really.

Matt Nally: Yeah, definitely. You’re not alone. Exactly. There, but I suppose before we come on to potential case studies, are there other, any other flashpoints?

Just

Nik Carle: one last one that I’d mention And it’s, again, there’s been a few cases historically that just makes me think that this is worth focusing on, and it’s to do with the the grounds of the property. So outside the property garden general grounds of the property. In the area, and if if you look on pages 32 and 33 of the home survey [00:38:00] standard, um, this is the part that gives you a description of the extent of your inspection.

That’s expected depending on whether it’s a level one level two or a level three. And I’m looking here at the grounds. So obviously, if it’s a just a level one the inspection of the grounds is. It can be quite cursory, that’s anticipated but if you get through to level 3 the requirement is that you should perform a comprehensive inspection of the grounds.

And the reason why I think this is important is that there have been a few cases about knotweed, we’ve talked about knotweed and things like that, and what’s growing in the garden. But there’s also been some cases about what’s going on in the adjoining property [00:39:00] and the boundary of the property and how the threat from a property that you’re not inspecting that’s next door or neighboring or adjacent, how that impacts any warning that you need to give in your report about the subject property.

Now again, this is a really difficult balancing exercise. I think because you’re not, yeah, it’s hard to know what the limits are. Are you expected to go on, say, on a level three? Are you expected to try to get access to the neighboring property? What if a kind of a retaining wall is, Located on, the right at the boundary of the property at the back are you supposed to go and inspect it from the other side and things like that?

So lots of question marks there, which gives rise to uncertainty from a legal liability. point of view, but, um, I have noted that quite a few [00:40:00] cases have arisen that have concerned what’s going on the periphery and not on the subject property.

Matt Nally: I suppose what becomes interesting with this is if you’re starting to do more historically we’ve had, you might look at something from the ground with binoculars, then pole cameras, and potentially now drones can go even higher.

Drones, yeah. Where does the boundary sit in terms of your potential viewpoint has now expanded much wider. So again, if you can see stuff, where do you cut that off? You got to see, you’re not going to see Japanese knotweed from five doors away from a drone, but something along those lines, you can see something five doors down, where’d you draw the line?

Nik Carle: No, that’s a good, that’s a good point. That’s a really good point. I hadn’t quite thought of that, but I guess it’s, it must be right that if it’s so much easier now with the use of drones, drone technology to check what might be going on in the environs and on the periphery, then I think a lot of Judges would expect that is easier than [00:41:00] therefore you should.

You should do it and that the sort of the extent of your inspected your expected inspection is greater now with if you’re using a drone, that is It might also mean, you need to up that fee that you’re quoting for the, or estimating for the client. Because, you are assuming a sort of a broader responsibility with the job.

Matt Nally: Yeah, true. So rather than it being a freebie that comes with it, it’s with the risk that’s the extra risk plus the licensing and, purchase of the drone, et cetera, it’s worth. Yes. Yeah. Yeah. Many reasons to to push the fee up for that justifiably, I think for that one.

Nik Carle: So those are my flashpoints.

But definitely some, something to think about there. And obviously the the standard is there. Is really quite a detailed document, but I think if if surveyors could zone in on those, um, sections that identify, then that would go a long way to to building a [00:42:00] more sort of protective outlook as they’re doing jobs.

Matt Nally: That was a really fascinating oversight, I think. Yeah, I won’t list out all of these in the summary. I’ll get people to listen and get the detail. Perfect. So I think what might be interesting to cover is case studies. You mentioned or sent a couple of three before before we came onto the podcast, I suppose you with the flashpoints, you mentioned summer.

More future, so like the environment, environmental aspects and some might be more current. So are there certain trends you’re seeing in the type of cases that are coming to court? And is there a trend in terms of there are more litigation going on at the moment or standard, standard amount?

Nik Carle: Since we last, since we had our last session, Matt, I think I was mentioning then, maybe it was about 18 months ago I was mentioning then that there seem to be more cases. Coming through and the change that we were seeing was, um, less [00:43:00] missed defects type claims and many more valuation claims.

Matt Nally: Yes. He did. Yeah. And that trend has has intensified, I would say. So there are now, um, I’m trying to track them all. And this is just claims in the high court. And I’m tracking, this is over the last two or three or four years, I’m tracking about 20 cases at the moment. A good portion of those have already settled.

Nik Carle: But they have obviously gone as far as being issued in the High Court and have gone through some of the initial stages of the litigation before they’ve resolved. Of those 20 or 25 most, the majority of them, I would say, are valuation cases, and they tend to be very large commercial valuation cases.

So that’s the current trend very much. Now, so [00:44:00] that’s 20, 25 cases, and those are just the ones I’ve been able to find out about. Um, maybe just to give you a comparison, maybe 10 years ago, there would have only been, I would say, five cases. So it’s quite a

Matt Nally: bit,

Nik Carle: quite a big difference.

Uplifting the change what do you

Matt Nally: think is driving that? Is that because we touched on last time that it tends to be when the market or the economy is dipping perhaps and money’s tighter that tends to come through. Is that with, although they’re more commercially focused, is that the same type of reason that might be going on?

Nik Carle: I think it must still be the usual driver is. An economic backdrop or an economic factor behind it, and I think being that there’s so many of these property developments that have gone wrong have not come to fruition and have failed for one reason or another. And this is the kind of attempt by suing the professional.

This is the attempt to. To salvage something from that from a [00:45:00] failed development or an investment or a project. So I think that’s a lot. It’s a big explaining factor there. But otherwise I don’t really know. Sometimes these the answer doesn’t reveal itself until many years later when you can look back.

So we’re in the, we’re in the sort of midst of it at the moment, and it’s quite difficult to get a handle on what’s behind it. But there’s definitely this. this very notable uptick in, in the number of claims. And I’m only talking about high court claims. If you’ve got 25 big cases in the high court I’m imagining there’ll be hundreds and hundreds in the county courts throughout the country.

So it’s It’s really a sizable change.

Matt Nally: Yeah, what’s the typical reason with valuations? Is it overvaluation, undervaluation or,

Nik Carle: over almost always overvaluation. Really surprisingly, the extent of the overvaluation is, in the cases I’ve been just investigating, it’s huge, it’s um, they they reported the [00:46:00] valuation was nine million and the expert that comes along and says, Oh, no, actually the true value they should have reported was 1 million.

So it’s huge differentials which indicates that either claimants have Got it completely wrong, or it’s a very sort of opportunistic claim, or the surveyors who are in the hot seat are miles and miles off, off the mark. We talked about this idea of the professional body of opinion, but that is the kind of extreme differential that that we were talking about to to find yourself in In a claim situation in the high court.

So these are really big claims on the numbers and the costs are The lowest costs are on them are huge.

Matt Nally: So

Nik Carle: yeah, the sleep was nice

Matt Nally: definitely. Oh, yeah, I’d not something I’d want to be involved in. No

Nik Carle: so the So that’s the that’s what we’re seeing in court at the moment is a lot of [00:47:00] these big cases working themselves through.

So I think there’s a couple of really interesting cases going to the Court of Appeal next year in 2025. And those are helpful because, like Heart Enlarge, they give an extra layer of guidance to, to surveyors in practice and everyone can pore over the detail and see what went wrong on those particular Cases and how they can avoid repeating the error.

So even those, even though they will be mainly valuation cases, there’ll be a lot of learning points that will emerge from the judgments when they become available.

Matt Nally: Definitely. But it sounds like if you’re mainly doing yeah, defect based surveys, rather than the evaluation ones, then going back to what we were saying about having the confidence to not caveat everything out of the report you’d be confident that what you’re giving is reasonable advice that everyone would give then.

you’re not likely to come up against a claim, at least not one that reaches that level. I think

Nik Carle: that’s right. The one sort of case study I [00:48:00] did just want to to mention is a defect case actually. So this is the one that is still ongoing. I’ve got to be a little bit careful because this is not a case that has reached trial yet.

So it’s it’s still halfway through. But it has, unfortunately for those concerned, it has been reported In the Daily Mail and they’ve not been very sensitive about about the read through, but it’s interesting at a kind of salacious level. But this is the case against where the claimants are Mr.

and Mrs. Green. And they’re suing they’re suing a couple, Mr. And Mrs. Windy and a firm of firm of surveyors. This, the property was former coach house. Just trying to remember where it was. I think it was Red Redding. It’s the old vi, the old Vicarage.

It was called and [00:49:00] the purchase price was two million, so it’s quite a nice heritage property and this case is interesting because it brings us back to one of our earlier points about concealing, um, because the allegation the case here, The surveyor has been sued, but also the sellers have been sued and what the the claimant, I think it’s Mr.

Gore, he alleges that that the sellers Where Mr. and Mrs. Winsey that they made a misrepresentation and that Mr. Gore only bought the property because he believed and he understood relying on the representations of the seller. He understood that it didn’t have any value. Significant defects.

And the allegation is that was untrue. And that the allegation is it’s only [00:50:00] an allegation. Is that the fact of the matter was that the property suffered extensively from dry rot. And also that it was structurally unsound and that the Whinseys, the Sellers, failed to disclose this.

And there is a sense in the case that they actively concealed. allegedly actively concealed the the existence of the works. Now, really important to say that the the sellers completely deny this, flatly deny this, so this is still a case to be tested at trial but it’s interesting, and there may not be a trial because it may need to settle, but the facts are interesting about the interplay between the surveyor and the sellers and, the questions that the surveyor was expected to ask, and, could he, notwithstanding the limited information he had [00:51:00] could he have discovered?

Could he have served as that safety net for the purchaser in these kind of circumstances? And how extensive did he need to, did he need to be he presumably wasn’t on notice of any kind of previous works to the property. Should he have discovered them irrespective of what the sellers were to him or to the purchaser.

So with some really interesting issues there and you’ve also got this idea of, it was a quite a kind of special, unusual, complex heritage property. I don’t know about the surveyors particular experience, but again, that might be a factor here because this was, not a run of the mill inspection by any means.

And so I hope the surveyor would have asked himself. Is this within my, the range of my capabilities before he went out? [00:52:00] To being selfish about it would be really interesting if this did reach trial, because there’s a lot of, there’s a lot of very typical issues that, that the judge would need to work through.

There are experts involved on both sides. So it’d be fascinating to see how it what the result was at trial and how all the evidence panned out.

Matt Nally: Yeah. From an academic perspective and understanding, yeah, the nuances of it, that would be very interesting. Obviously for all the parties you want them to resolve it as yeah, quickly as easily as possible.

But yeah, from that perspective, it would be very interesting. I think, I suppose it ties. Yeah. And I see what you said in terms of the severe understanding, their experience levels and whether that was a factor because that, that, that would be very interesting to know. And then it comes down to if they are the experience and that’s the type of work they do where do you draw the line on what you should be able to pick up in terms of what potential works might’ve been done without having any knowledge of that property?

Cause I suppose arguably an older property you should be able to [00:53:00] expect that work will have been done over time and what type of things might affect. Timber or other fabrics of the building. So yes, it’s a very interesting one in terms of yeah, what should have been picked up, not picked up what’s covered, what isn’t.

Nik Carle: Yes. And it’s almost a perfect case. I’ve actually obtained a copy of the Each party’s statement of case, so their pleadings in the litigation. So I could see what arguments were being what positions were being advanced by the seller by the claimant purchaser and also by the severe.

Know for the severe. He’s taking every point that you would expect him to, so he’s referring to his terms of engagement and any limitations that are in there at the start. He did get his terms of engagement signed in advance, and it looks like he had his processes all nicely ordered as we would want to see but it, yeah, so there’s maybe four or five very typical issues that almost always crop up in [00:54:00] these severe cases in court, but it would be it would be useful to have a trial on this because you would get some, I’m sure you would get some developing of the law in this area for okay but you’re right, we can’t say wish for that.

I hope they do get it. They do get it settled. Yeah. But I know exactly what you’re trying to say. And you mean in the nicest of ways from a, from an educational perspective. Yes, exactly. Awesome. And I think that’s been really interesting. I think I’ll probably go straight into this last bit then rather than a separate topic.

Matt Nally: But one thing we discussed beforehand was how mediation and alternative dispute resolution are. Being used more in or the role is changing, at least in smaller cases. So obviously we’re focused on some bigger cases so far. How is that changing over time? Because we did a podcast on a DR or in, in, in our previous season.

So it’d be interesting to hear about how. How that’s changing and how it’s affecting whether things go to court or not and all that type of stuff.

Nik Carle: Yes and I did see that earlier podcast. It was it Christine O’Rourke? [00:55:00] Yeah I thought that was excellent. Christine made a number of really good points about ADR force, in a surveyor’s context.

So I can maybe just update a little on, on that. And give everyone an idea of where we are now, because there has been quite a significant change, um, in that the rules, the court rules are being updated from the 1st of next month. So the 1st of October and The reason it’s significant is that the, with the rule change the court is going to have the ability to effectively force parties to engage with each other and try to find a settlement to their dispute to use ADR even if they’re unwilling to do now it’s. It’s quite a change and it has has access to justice [00:56:00] implications, um, behind it so it will be interesting to see how this This develops just to give you an idea of how this has really come about the courts at the moment. It’s terrible. It’s a broken.

It’s a broken system. The NHS is, lots of talk about that. There was the report yesterday that came out on the state of the NHS and lots of talk about it being on life support and all of this sort of stuff and. Needing to be needing a a new prescription. The court system, I’m afraid to say is much this, much the same on its knees.

The backlog is, into years, 18 months at least before you get into into, in front of a judge. So the system needs to find a way to to take the pressure off and, um, the solution that’s been come up that has the courts have come up with the Ministry of Justice has come up [00:57:00] with is to push disputes as back to the parties themselves to try and resolve themselves without the court system needing to be involved.

So the judges are now going to have the ability to, as I say, to compel parties to engage in A mediation or another form of ADR that doesn’t involve a trial in front of a judge.

Matt Nally: What’s the incentive for the parties involved in that? Is it looked badly on? When you, if you do eventually go to court, if you’ve shown very little engagement with that process and the other party has tried to engage, would it work against you at that point?

Nik Carle: Yes. So if and this is, this has always been the case really if a party has been unreasonable about so let’s take a scenario where a claimant brings a claim against a surveyor and there’s some [00:58:00] exchanges between the parties about their respective positions. And then, after a month or so, the claimant says look, we clearly disagree about this.

Why don’t we? Try a mediation between us and see if we can see if we can reach a resolution. If the surveyor on the on their side says no, I’m confident I’ve done nothing wrong here. I’m not paying you anything and just declines to take up that offer of ADR offer of mediation, then, there can be consequences to that in that if it then goes into the court system and the judge reaches their decision at the end of the process and then discovers that, all of this rigmarole could have been avoided. If only the parties had actually had their mediation, that early stage, all that.

Vast amounts of lawyers fees had could have been avoided as well. [00:59:00] So there’s always been power to make a penalty award in costs which will really hurt on the sort of offending party.

Matt Nally: Yeah.

Nik Carle: Yeah. But up until now. Courts haven’t had the ability to force parties to, um, to participate in an ADR process against their will.

Whether judges will actually make these awards or these orders, is still remains to be seen, but they do have the power from the 1st of October to do it.

Matt Nally: I can see it happening because as you say in the news, you’re seeing how the courts are very under pressure. The prison’s having to release people early to try and free up space.

And otherwise the court cases can’t go ahead to, there’s no repercussion afterwards. So yeah, it does seem like Quite a bad position that the justice system is in at the moment. Oh,

Nik Carle: it really is. I’ve never known it as bad as it is now. It is broken. There’s [01:00:00] no doubt about it. And something needs to be done.

And there’s lots and lots of positives about this emphasis on ADR. Lots of positives in that it’s, as Christine was saying in her session, it’s much, much quicker as a process to get to a resolution. It’s Much, much less expensive. Often it doesn’t need lawyers to be involved and when the parties can just come to terms themselves.

But it is, the downside or maybe the reservations about it are that what does it mean when the judge says you’ve got to, you’ve got to engage in this process? Does that mean you have to. Make an offer. If you’re the claimant, do you have to accept less than your claim is worth? If you’re the defendant or the surveyor here, do you need to, do you need to pay something towards a claim where you don’t think you’re really liable just to get it resolved?[01:01:00]

And if you don’t pay anything, does that mean you’re failing to engage as the rules are quite

Matt Nally: That’s true because it sounds actually quite simple at first you go you get, you go have that conversation and then you both come to some sort of agreement and then actually it moves away.

But actually the reality is if you don’t agree on something in the first place and if it comes down to something that is, I don’t think I should be paying something. It’s hard to show you’ve actively engaged beyond, cause if you’re maintaining your position, you can engage in terms of providing good justification for that, but yes, that could be seen as a weak level of engagement perhaps. Yeah. I don’t know.

Nik Carle: Yeah. Yes, you’re right. So I think. That was the was really just wanted to lay the ground, so I think in the next couple of years we’re going to see a much, uh, greater emphasis on parties having to, or really being strongly encouraged to resolve their disputes and not litigate them.

I think [01:02:00] it’s almost as Litigating or taking your case to court for a judgment is going to be seen as a kind of a. A social Ill almost it’s a bit like, when we were in the pandemic and there was just a sense, you shouldn’t really use the resources of the NHS unless you really need to.

It’s the same, it’s the same kind of sense here. And it’s lots of guilt lading if you’re not really making a proper goal of them. An effort to get a case settled.

Matt Nally: Yeah, just get labeled as unreasonable.

Nik Carle: You can, but it’s, I don’t want to detract from all the benefits because you know, it’s better to avoid litigation or getting anywhere close to court because it’s a terrible experience.

And, I wouldn’t wish that on anyone. But at the same time most of my clients don’t just want to pay out because it’s expedient to do so that, they feel quite strongly that they have a case. They want the case to be put forward. They [01:03:00] don’t just want to, they just don’t want to fold or capitulate because it’s convenient and the thing will be ended.

That, that does really start to grate with a sense of justice, I think, or injustice. Yeah. And you don’t want to potentially encourage people chancing it because it’s easier just to give something back. Yeah. You’ll be a soft, you’ll be

perceived as a soft touch. That’s always the worry.

But Yeah, no easy answer. No easy answer, but I think it’s going to be a quite noticeable sea change in these next few years. That’s a lot more talk of ADR and other ways to resolve disputes rather than just going to court.

Matt Nally: Yeah, I get the impression that overall it should be. This is hopefully the right prediction, but it should be a positive step in terms of the majority of things being able to get sorted outside of of course, obviously it will not work for 100 percent of cases, of course not.

But yeah, but hopefully it means that things can be resolved, as you say, more quickly, more, more, less [01:04:00] expensively. And yeah, it’s a streamlined process and so people can just move on then.

Nik Carle: Yes, and you said earlier Matt, no system is perfect, so I’m not pretending that going to judges get it right or that’s a perfect system of justice.

So it’s just it’s None of it is ideal or perfect and the CEDAR adjudication scheme, which is in place for surveyors is I think a really good one. It’s free. It deals with cases up to 25, 000. It’s quick. It’s confidential. That’s the other thing. You keep this out of court.

I would encourage surveyors to embrace that as a process because it’s much more streamlined. And I think most, I think the stats on it are that most decisions are made. Go in favor of the severe and not in favor of the complainant. So

Matt Nally: interesting, worth

Nik Carle: having some confidence in that system.

Matt Nally: Yeah, definitely. And then the confidence that can go and do a good job with a report that can be relied on. Yeah,

Nik Carle: yes, quite [01:05:00]

Matt Nally: awesome. I think it’s been a really fascinating episode hearing all the flashpoints and some of the stuff that’s going on and where the future is going in terms of the processes.

So thanks very much for coming on today and discussing it again. And I’m sure we’ll touch base again in a couple of years and see see how things moved on with the

Nik Carle: pleasure. I can go back for a start episode.

Matt Nally: If if anyone wants to get in touch, just like last time, what’s the best way to drop your message or they have got any concerns or queries?

Nik Carle: I’m very active on LinkedIn. I would encourage anyone to just connect with me on LinkedIn and message me there. It’s a lot of content and I’m happily always happy to engage and keep my finger on the pulse as to what’s going on in the profession. So that’s the best place to find me, I think.

Matt Nally: Awesome. Thanks again. And I look forward to catching up soon.

Nik Carle: Okay. Thanks, Matt.