Privy Council considers reformulated test for determining scope of duty of care owed by professional advisers

In the context of a claim brought by a bank against a valuer, seeking damages in respect of a negligent valuation report for land representing the bank’s security, the Board of the Privy Council has allowed an appeal by the valuer on the basis that the losses claimed did not fall within the scope of the duty of care owed by the valuer to the bank: Charles B Lawrence & Associates v Inter-commercial Bank Limited (Trinidad and Tobago) [2021] UKPC 30.

This decision is the first case to consider the Supreme Court’s leading decision in Manchester Building Society v Grant Thornton [2021] UKSC 20 as to the proper approach to determining the scope of duty and the extent of liability of professional advisers in the tort of negligence, including the proper application of the so-called SAAMCO principle. Following Manchester Building Society, the Board emphasised that in determining the scope of the duty of care, it is particularly important to consider the purpose of the advice or information being given (and therefore the risk being guarded against), and that the SAAMCO counterfactual test will not necessarily be applied in all cases, especially where to do so would be unhelpful.

For more information see this post on our Banking Litigation Notes blog.