Bratt v Jones [2025]

Bratt v Jones [2025] EWCA Civ 562

“The bracket”

When valuing assets (real property, shares, paintings) a valuer must exercise reasonable care and skill to reach the “correct” valuation. If the valuation is too high, then the buyer who relies on it will suffer loss because she pays more than the thing is worth. If it is too low, then the seller who relies on it will suffer loss because she receives less than the thing is worth. But two valuers may value the same thing differently. That does not necessarily mean that one of them has been negligent. They can reach different valuations whilst still exercising reasonable care and skill. As Eder J said in Capita Alternative Fund Services (Guernsey) v Drivers Jonas [2011] EWHC 2336 (Comm) at [145]:

“The process of valuing real property has strong subjective elements; it is an art not a science and not every error of judgment amounts to negligence. This leads to the concept of ‘the bracket’, or ‘the permissible margin of error’.” 

In the recent case of Bratt v Jones [2025] EWCA Civ 562, the Court of Appeal has considered the relevance of the concept of “the bracket” to professional negligence claims against valuers. In this article we will review the decision, but before we do so, we will first consider some of the key cases that preceded it.

The concept of “the bracket” was first coined by Watkins J in Singer & Friedlander v John D Wood & Co [1977] 2 EGLR 84. At 86A he said that:

“valuation is an art, not a science. Pinpoint accuracy in the result is not, therefore, to be expected by he who requests the valuation. There is, as I have said, a permissible margin of error, the “bracket” as I have called it. What can properly be expected from a competent valuer using reasonable skill and care is that his valuation falls within this bracket.”

In Merivale Moore plc v Strutt & Parker [2000] PNLR 498, the Court of Appeal approved Singer & Friedlander and said that to find the valuation fell outside the relevant bracket was a necessary condition of liability. (Whether it is also a sufficient condition is the issue that the Court of Appeal considered in Bratt v Jones – see further below). In other words, even if the valuer failed to exercise reasonable care and skill, he would not be liable if, despite his negligence, he nevertheless reached the ‘right’ result.

In K/S Lincoln v CB Richard Ellis [2010] PNLR 31 at [152], Coulson J illustrated this principle with the following striking example:

“Suppose the valuer made a negligent error as to the appropriate comparables, which resulted in a grossly over-stated starting figure. And then suppose that, in doing his detailed calculations, the valuer made another inexcusable error, this time a purely mathematical mistake, which led to a final figure that was much lower than it would otherwise have been if he had done the maths correctly. These two breaches may cancel each other out so that, whilst the valuer may have been in breach of duty twice over, his ultimate valuation figure may be very close to the correct figure. In those circumstances, liability would not have been made out because, possibly as a result of sheer luck, his final figure cannot sensibly be criticised.”

The notion that a valuer who, despite gross incompetence, will not be liable for negligence so long as his valuation is within the bracket, is open to criticism. If a valuer makes an arithmetic mistake of the sort considered in Coulson J’s example that leads him to overvalue or undervalue the property by 9%, one may say that it should be no defence to a claim for damages that the valuation was still within the 10% bracket (assuming that is the relevant percentage).

Support for rejecting the ‘pre-condition’ approach may be found in the judgment of Lord Hoffmann, giving the advice of the Privy Council, in Lion Nathan Ltd v CC Bottlers Ltd [1996] 1 WLR 1438 at 1445:

“As has been said, a forecast is always the forecaster’s estimate of the most probable outcome, the mean figure within the range of foreseeable deviation. The judge appears to have assumed that if a figure would have been within the range of foreseeable deviation from the mean of a properly prepared forecast, it must follow that it would have been proper to put that figure forward as the mean. This proposition has only to be stated to be seen to be fallacious. There is no connection between the range of foreseeable deviation in a given forecast and the question of whether the forecast was properly prepared. Whether a forecast was negligent or not depends upon whether reasonable care was taken in preparing it. It is impossible to say in the abstract that a forecast of a given figure “would not have been negligent.” It might have been or it might not have been, depending upon how it was done. Assume, for example, that the vendor had forecast $1.25m and that the limits of foreseeable deviation would have been regarded as $50,000 either way. Assume that the forecast was unexceptionable in every respect but one: there had been a careless double counting of sales which, if noticed, would have reduced the estimate by $25,000. To that extent, the estimate has not been made with reasonable care. If on account of some compensating deviation the outcome is $1.25m or more, the purchaser will have suffered no loss and the vendor will incur no liability. But if the outcome is less than $1.25m, their Lordships think that the purchaser is entitled to say that if the estimate had been made with reasonable care, the figure put forward by the vendor as the mean and upon which he relied in fixing the price, would have been $25,000 lower. To this extent, he has suffered loss by reason of the breach of warranty. It is nothing to the point that the outcome is still within what would have been predicted as the limits of foreseeable deviation. His complaint is that the whole range of possible outcomes would have been stated as $25,000 lower. The purchaser has accepted the risk of any deviation attributable to factors which were unforeseeable, unknown or incalculable at the time of the forecast. He has accepted the risk of such deviation whether its true extent would have been foreseeable at the time of the forecast or not. But he has not accepted the risk of any deviation which is attributable to lack of proper care in the preparation of the forecast. The only tolerable forecast is one which, on its facts, was prepared with reasonable care.”

In Goldstein v Levy Gee [2003] PNLR 35, Lewison J (as he then was) said at [43] that Lord Hoffmann’s reasoning here was “very persuasive indeed”. Nevertheless, the need to show that the valuation fell outside the bracket was clearly stated by the Court of Appeal in Merivale Moore and in Bratt v Jones the Court of Appeal said that it was not open to them to depart from this.

We turn now to consider the case of Bratt v Jones itself.

Factual background

Mr Nigel Lawson Jones (“the Valuer”) was appointed as an independent expert under an option agreement dated 28 May 2002 between Mr Rowland Phillip Bratt (“Mr Bratt”) and Banner Homes Limited, a property development company (“Banner Homes”).

The option agreement concerned development land situated at Cotefield Farm, Bodicote, Banbury, Oxfordshire (“the Land”). It provided that the price payable by Banner Homes to Mr Bratt was 90% of the market value of the Land on a specific valuation date (subject to deduction of specified sums). The market value was to be agreed between the parties, failing which it was to be determined by an independent surveyor.

The Valuer valued the Land at £4,075,000, having regard to: (1) submissions from Mr Bratt’s surveyor (which predominantly focussed on comparable transactions of development land); (2) submissions from the surveyor appointed by Banner Homes (which focussed on the residual valuation of the anticipated development); (3) additional comparable transactions; and (4) “abnormals” that were required to make the Land ready for development. The Valuer did not, however, have regard to “Enhancements” (building costs that would potentially be spent by a developer above what was necessary to produce standard functional houses).

Banner Homes then exercised the option and acquired the Land for £3,529,500.

The first instance decision

Mr Bratt alleged both breach of contract and negligence in respect of the valuation. He asserted that the true market value was £7,800,000 and that the appropriate bracket was between £7,000,000 and £8,600,000. Mr Bratt accordingly sought damages of 90% of the difference between £7,800,000 and £4,075,000.

HHJ Cawson KC, sitting as a judge of the High Court, identified the salient principles to be as follows:

• It is a precondition of liability that the valuation should fall outside the range permitted to a non-negligent valuer.
• The court should form its view (based on the evidence before it) of the correct value at the valuation date.
• The court should then consider the appropriate margin of error. This is a fact-specific question.
• If the valuation is within the margin, negligence would not be established because liability should be determined by reference to the results of the valuation.
• Where the valuation is outside the bracket, the court will examine whether the valuer has acted in accordance with established practice in reaching the valuation. It follows that the valuation methodology is called into question at this stage.

The judge determined the appropriate value to be £4,550,000. Moreover, the judge considered the appropriate margin to be 10-15% based on: (1) the wide range of opinions as to market value since 14 June 2013; (2) the fact that there is scope for a significant margin of appreciation on how abnormals should be factored in; and (3) the fact that the margin is likely to be higher for development plots with unique features.

HHJ Cawson KC then concluded that the negligence claim failed because:

• The appropriate margin for a non-negligent valuation was between 10 and 15%, either side of the correct value.
• The Valuer’s valuation was within 14.15% of the correct value (as determined by the court).

The appeal

Permission to appeal was granted on four grounds:

1. The judge applied the wrong legal test to determine liability.
2. The judge was wrong to approach the question of the size of the bracket to be determined as a factual question, based on expert evidence. Mr Bratt argued that the determination of the bracket was a legal question.
3. The judge erred in his treatment of enhancements and abnormals. The correct value should have been £590,594 higher.
4. The judge ought to have relied on two other comparables in reaching his conclusion on the correct market value of the Land. This would have placed the valuation outside the permissible bracket.

 Decision

The Court of Appeal dismissed all four grounds of appeal.

Ground 1 – The approach to claims against valuers

The Court of Appeal placed particular reliance on the decisions in Singer & Friedlander and Merivale Moore and concluded that a valuer is not automatically negligent where the valuation figure is outside the relevant bracket.

Once it has been shown that the valuation is outside the bracket, the claimant still needs to demonstrate negligence in accordance with Bolam principles. The Court of Appeal rejected Mr Bratt’s contention that a valuation outside the bracket reverses the burden of proof – the  legal burden of proof in establishing negligence always rests with the claimant.

Accordingly, it is for a claimant to demonstrate that the valuation was outside the acceptable bracket and that the valuer has breached their Bolam duty.

Ground 2 – Determination of the bracket

After reviewing Singer & Friedlander and K/S Lincoln, the court stated that the determination of the relevant bracket is a question of fact, not law. This conclusion was also supported by Merivale Moore where Buxton LJ highlighted that the determination of the bracket was not a mechanistic exercise, detached from the facts of the case.

It was open to the judge to reach the conclusion that he did, having conducted his evaluation of the available evidence (including the expert evidence).

Ground 3 – Enhancements and Abnormals

In determining the value of the Land, HHJ Cawson KC deducted £550,000 to take account of enhancements given that there may have been some enhancements at a comparable property and/or a chance that the whole of the enhancement cost would not be recovered through an increase in purchase prices.

The Court of Appeal concluded that it was proper for the judge to make adjustments for enhancements. Further, the amount of the adjustment was supported by expert evidence.

The court also rejected the contention that the judge’s treatment of abnormals was erroneous. There was no pleaded allegation on this point and the judge made no finding of fact on this. However, in any event, the court did not consider that the treatment of abnormals would have affected the judge’s assessment of the correct valuation.

Ground 4 – other comparables

The final criticism of the judge’s decision was that he ought to have considered two additional properties as comparables. It was accepted on Mr Bratt’s behalf that the proposed additional comparables were “inferior comparables” to the Land given their location.

The difficulty here was that the experts had not carried out an exercise with these comparables so there was no evidence as to what the result would have been.

The court found that the judge was not required to engage in a valuation exercise which had not been carried out by any of the experts.

Comments/ analysis

The main takeaway from the decision is the confirmation that, to establish negligence against a valuer, the claimant must show both (i) that the valuation fell outside the applicable bracket and (ii) that the valuer failed to act with reasonable care and skill (applying the Bolam test) when carrying out the valuation.

However, the Court clearly had misgivings about the pre-condition requirement laid down by Merivale Moore – and with some justification. If the claimant can show that the valuer acted without reasonable care and skill, why should a valuer escape liability just because his valuation happened to be 9% above the true value, when another valuer, though equally culpable, would be liable if his valuation was 11% above the true value?

Only the Supreme Court can decide if the pre-condition approach is correct or whether it must yield to the observations of Lord Hoffmann in SAAMCO and Lion Nathan. The problem is finding the right case. The point can only go to the Supreme Court if the loss falls within the bracket (i.e. is less than 10% or 15% of the asset’s true value). To justify the cost of a Supreme Court appeal and all that comes before it would therefore require a claim involving a very high-value asset indeed.

Article by Tom Bell and Priya Gopal