Margins of error

A look at what is deemed to be an acceptable margin of error in valuation disputes.

It is has been left to the courts to decide what is a permitted margin of error when carrying out a valuation of  property. Generally, case law precedent refers to a margin of between 10% and 15% depending upon the facts.

Singer and Friedlander v John D Wood & Co [1977] 243 EG 212 states that the margin of error can be 10% either side of a figure that can be said to be the right figure that a competent careful and experienced valuer arrives at after making all the necessary enquiries and paying property regard to the state of the market.

In exceptional circumstances, the permissible margin  could be extended to about 15% or a little more either way.

The permitted margin of error principle is considered in the following: 

• Banque Bruxelles Lambert SA v Eagle Star Insurance Co Ltd [1995] 12 EG 143
• South Australian Asset Management Corporation v York Montague Ltd [1995] 3 WLR 87
• First National Commercial Bank plc v Andrew S Taylor (Commercial) Ltd 1995 [1997] P.N.L.R. 37
• Merivale Moore Plc v Strutt & Parker 1999
• Goldstein v Levy Gee 2003
• Scullion v Bank of Scotland Plc (t/a Colleys) 2010
• K/S Lincoln v CB Richard Ellis Hotels Ltd 2010
• Paratus AMC Ltd and Countrywide Surveyors 2011
• Capital Alternative Fund Services (Guernsey) v Drivers Jonas QBD 2011
• Blemain Finance Ltd v ESurv Ltd 2012
• Webb Resolution Ltd v Esurv Ltd 2012
• Phillips v Francis 2012
• Titan Europe 2006-3 v Colliers International UK plc (in liquidation) 2015