The decision of the House of Lords in South Australia Asset Management Company (SAAMCO) v York Montague [1997] has troubled practitioners and courts for almost 10 years. However, an important recent decision may go some way towards resolving the problems SAAMCO has caused.
SAAMCO determined that someone under a duty to take reasonable care with regard to the information on which someone else relies will generally only be responsible for the consequences of the information being wrong. Thus negligent surveyors who overvalue will only be liable for lenders’ losses up to the difference between the correct valuation and their negligent one – not the whole loss, which may be caused in part by, for instance, a collapse in property prices.
