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Christopher Andrews v Barnett Waddingham LLP (2006) EWCA 93

Mr Andrews had amassed a pension pot of nearly £2m. In 1994 he approached Barnett Waddingham, a firm of actuaries to advise him on what to do on his retirement. He split his fund between an annuity linked to the retail prices index and a with profits annuity, both with Equitable Life. Mr Andrews alleged that he was negligently advised by Barnett Waddingham in relation to the with profits annuity. However, the relevant advice was given when Equitable Life’s problems were still some distance in the future and there was never any allegation that the advice to do so was negligent; nor was there any finding that Barnett Waddingham had assumed a duty to protect Mr Andrews from the possibility that Equitable Life would have financial difficulties. The Trial Judge found that the loss suffered by Mr Andrews was “inextricably linked to the negligently given information” (which was in respect of the Policyholders Protection Act 1975)and awarded him over £1million. The Court of Appeal restated the analysis explained in Saamco that a Claimant must not only show that a duty of care was owed to him and that it has been breached, but also that it was a duty in respect of the kind of loss which was suffered. In this case, the loss suffered by Mr Andrews was unconnected to the fact that the PPA 1975 did not apply to his with profits annuity as he was advised it did. The correct measure of damages was the difference between the loss sustained by acquiring the with profits policy annuity and the loss which would have been sustained if the PPA 1975 applied to the with profits annuity as Mr Andrews was advised it did i.e. nil because Equitable Life was not insolvent. The judgement was set aside on appeal and leave to appeal to the House of Lords was refused. -

South Australia Asset Management Corporation -v- York Montague Ltd; [1997] AC 191 - Gazette 1996-09-04 - Times 1996-06-24 - [1996] 3 WLR 87

This was one of the many cases arising out of the 1980’s property boom and subsequent fall. York Montague had valued some Docklands property at £15 million. SAAMCO relied on this to finance a development, which was defaulted on. The sale of the site realized less than £3million and SAAMCO claimed £9,753million with interest against York. The case for establishing causation was the "but-for" test in which a defendant will be liable only if a claimant’s damage would not have occurred "but for" his negligence. Alternatively, the defendant will not be liable if the damage would, or could have occurred anyway, regardless of his or her negligence. The illustration was used:- “A mountaineer about to undertake a difficult climb is concerned about the fitness of his knee. He goes to a doctor who negligently makes a superficial examination and pronounces the knee fit. The climber goes on the expedition, which he would not have undertaken if the doctor had told him the true state of his knee. He suffers an injury which is an entirely foreseeable consequence of mountaineering but has nothing to do with his knee. The doctor's negligence does result in the mountaineer running a risk which he otherwise would not have done, but this is insufficient to incur liability. The purpose of the doctor's duty to take care is to protect the mountaineer against injuries caused by the failure of the knee, not rock falls. Even though the injury might be reasonably foreseeable, the doctor is not liable”. It was held that a valuer provides an estimate of the value of the property at the date of the valuation. He does not undertake the role of a prophet. It is unfair that merely because for one reason or other the lender would not otherwise have lent, the valuer should be saddled with the whole risk of the transaction, including a subsequent fall in the value of the property. -