High Court considers whether duty of care owed by lender and valuer

In a decision which, somewhat unusually, provides comfort for both lenders and valuers (who are often on opposing sides of litigation), the Circuit Commercial Court has found in favour of Santander and BNP Paribas and disposed of the Claimant's claims against them summarily.  The Rehmans, who were directors and shareholders of a company to which Santander had advanced funding, had brought proceedings against Santander and BNP Parabis allegedly that they owed various duties to them as lender and valuer respectively. 

Dispute Resolution Senior Associate, Chris Freeman, looks at some of the key aspects of the decision in Rehman & Rehman -v- Santander UK plc and BNP Paribas Real Estate Advisory and Property Management UK Limited [2018] EWHC 748 (QB) below.   


The borrower company, Rosewood Care Services Limited ("Rosewood"), ran two nursing homes and approached Santander for funding.  Santander instructed BNP Paribas to value the two properties, and funding was then duly provided to Rosewood.  Fast forward several years and administrators had been appointed in respect of Rosewood following its default, with the two nursing homes then sold and sale proceeds paid over to Santander.

The Rehmans, directors and shareholders of Rosewood, who had provided a guarantee to Santander, brought a claim against Santander on a number of bases including that (paragraph 17 of the judgment):

  • Santander owed them a duty of care to choose a competent specialist valuer, which it had breached by instructing BNP Paribas.
  • Santander had misrepresented or misstated that the valuations were a true and fair estimate of the market value of the properties, that the businesses carried on from them provided adequate security for Rosewood's liabilities to Santander and, crucially, that the Rehmans could rely on those valuations without obtaining their own.

The Rehmans brought a claim against BNP Paribas arguing that it owed them a duty of care in respect of the valuations, which it had breached causing them loss (paragraph 18).  This was despite the valuations containing express statements seeking to prevent anyone other than Santander relying on them.

Santander counterclaimed for sums due under the guarantee that the Rehmans had provided.


The Court found in favour of both Santander and BNP Paribas, and against the Rehmans.  

In relation to Santander, HHJ Klein concluded that "Generally, where a bank, about to enter into a commercial transaction, requires a valuation for its own internal purposes and engages a third party to carry out the valuation exercise, it would be unreasonable to conclude that, simply by passing on to an intended borrower or guarantor the result of the valuation exercise and then making facilities available, the bank somehow makes a representation about the accuracy or reliability of the valuation or the competence of the valuer".

On the claim against BNP Paribas, HHJ Klein found that:

  • There was no evidence to suggest that BNP Paribas even knew of the Rehmans' existence, let alone consented to the giving of the valuation reports to them or owed them a duty of care;
  • By its disclaimer in the valuation reports, BNP Paribas had made it clear that the valuation reports were private and confidential to Santander, that they could not be disclosed to (or relied on by) the Rehmans without BNP Paribas' consent, and that if the Rehmans did rely on them without such consent then BNP Paribas accepted no responsibility to them; and
  • Sufficient notice of the disclaimer had been given to the Rehmans and that any court would consider it reasonable.


Whilst the decision in itself is not a surprise, it does provide some additional comfort to lenders and valuers alike when faced with claims of a similar nature.  From a lender's perspective, it is also a reminder (albeit indirectly) of the importance of having a valuation report addressed specifically to the lender when seeking to rely on that valuation in making lending decisions.     

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