On the 22 November 2021, the Privy Council of Trinidad and Tobago handed down their decision in Charles B Lawrence v Intercommercial Bank Limited [2021] UKPC 30. The decision provides a useful analysis of the scope of duty in professional negligence claims against valuers in light of the recent Supreme Court decisions in Manchester Building Society v Grant Thornton UK LLP and Meadows v Khan.


International Bank Ltd (“the Bank”) was the claimant lender and respondent to the case. Singapore Automotive Trading Ltd (“SAT”) approached the Bank for a loan. Rafferty Development Ltd (“Rafferty”) was to be the guarantor of the loan and there was to be a mortgage of land owned by Rafferty as security for the loan.

Following Rafferty’s instructions, Charles B Lawrence & Associates (“CBL”) provided that the land for the proposed mortgage (“the Land”) was valued at $15 million, but, on the assumption that:

  • good marketable title to the land could be shown;
  • planning permission would be granted for commercial development; and
  • the Land was free from all encumbrances with vacant possession.

In reliance of the valuation, the Bank loaned SAT $3 million, with Rafferty as guarantor and with mortgage of the Land as security for the loan. SAT and Rafferty then defaulted on the loan. As a result, the Bank appointed a receiver to enforce the security, but the highest bid received for the Land was $2 million. In response the Bank issued a claim against CBL seeking damages for negligent valuation.

The Bank subsequently discovered that Rafferty did not have good title to the Land, rendering the mortgage worthless. The Bank brought a subsequent action against its conveyancing attorney for negligent failure to investigate title. This action was settled for $2.4 million, but the claim against CBL proceeded to trial.

The decision of the High Court in Trinidad and Tobago

Madam Justice Jones decided that:

  • CBL owed the Bank a duty of care regarding the valuation report;
  • There was a breach of that duty of care by CBL in two respects:
    1. CBL should have valued the Land on the basis that it could only be developed for residential use;
    2. CBL failed to draw attention to the fact that there were occupiers on the Land;
  • All the loss suffered by the Bank was caused by CBL’s breach and was recoverable from CBL. Moreover, it was held that there was no contributory negligence by the Bank.

The court assessed damages at $2.36 million ($3 million loan, plus 15.75% contractual interest, minus $2.4 settlement with conveyancing attorney).

The decision of the Trinidad and Tobago Court of Appeal

CBL appealed primarily in relation to negligence, interest and the Bank’s contributory negligence.

The Court of Appeal dismissed the appeal, upholding Madam Justice Jones’ decision, subject to:

  • The appropriate rate of interest to be added should instead be the statutory 12%;
  • There should be a 20% reduction for the Bank’s contributory negligence in not sending their own officers to inspect the Land as this would have revealed the presence of the occupiers.

Applying this, the court reduced damages to $2.07 million. CBL then appealed to the Privy Council.

The decision of the Privy Council

CBL appealed on the basis that the lower courts were incorrect as a matter of law because their decisions were contrary to the “scope of duty principle” established in SAAMCO. In their judgment, the Privy Council referred to the decisions in Manchester Building Society v Grant Thornton UK LLP [2021] UKSC 20; [2021] 3 WLR 81 (“Manchester”) and Meadows v Khan [2021] UKSC 21; [2021] 3 WLR 147 (“Meadows”), where negligent advice had been given by an auditor and doctor respectively.

In Manchester and Meadows, the Supreme Court made it clear that “in determining the scope of duty of care, it is particularly important to consider the purpose of the advice or information being given.” On this point, the Privy Council noted that it was “clear…that the purpose of [CBL]’s report was to value the property on the assumption that there was a good legal title to the land. It was not the purpose of [CBL]’s report to advise on, or give information about, the title to the Land.”

CBL submitted that the loss suffered by the Bank should be split into two distinct losses:

  • The loss suffered because the Land was overvalued as being for commercial use; and
  • The loss suffered because the title to the Land was defective.

CBL asserted that the second of these losses was outside their scope of duty and irrecoverable.

The Privy Council held that CBL were not responsible for the loss arising because the title to the Land was defective as this was outside CBL’s duty of care, given they were not instructed with investigating title. This loss was instead attributable to the conveyancing attorney. CBL were however liable for the loss suffered due to the Land being overvalued for commercial use.

The court also concluded that the counterfactual test in SAAMCO was not helpful in this instance. The counterfactual test requires a person to ask whether the claimant would still have suffered the same loss if the information or advice given had been true. If the answers was ‘yes’, the scope of duty would not extend to the recovery of that loss. The court highlighted that applying the test to the facts would have contradicted their aforementioned view that the defective title loss was outside the scope of CBL’s duty of care. The court considered the decisions in Manchester and Meadows, which held that the counterfactual test should be applied flexibly and used as a cross-check to decide the scope of duty in some (but not all) cases. In this instance, the Privy Council decided the counterfactual test was not of primary importance to establish the scope of the duty of care, instead preferring to follow the Supreme Court decisions in Manchester and Meadows, which held that the scope of duty will be defined by a careful examination of the purpose of the advice or information being given.

On this reasoning, the Privy Council allowed the appeal and damages held to be around $833,000 (being the $3 million loan, minus the value of the land at the date of the loan assuming good legal title, which was $2.375 million, minus the Bank’s 20% contributory negligence and adding the 12% interest rate).


Although this decision was outside the jurisdiction of England and Wales, it is useful as it applied English law and further clarified the appropriate test for scope of duty in professional negligence claims by applying the reasoning of the Supreme Court in Manchester and Meadows in holding that the scope of the duty of care can be established by examining the purpose of the advice or information being given. This decision highlights the importance, for all professionals, of clearly defining the scope of work in the initial terms of engagement, in order to attempt to avoid any future disputes as to the scope of the duty owed.

If you require any advice regarding a potential professional negligence claim, please do not hesitate to contact Kate Dwyer or any member of our Insurance Litigation team.

Please note that this blog is provided for general information only. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content of this blog.

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