This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. Find out more here.
X
MM+Cover+small+181214
Categories:Mortgages

Court ruling could cut negligence claims

  • Print
  • Comment

A ruling in a High Court case between GMAC-RFC and Countrywide Surveyors could result in fewer lenders making claims of negligence against surveyors.

GMAC-RFC started legal proceedings against Countrywide Surveyors in 2008 for allegedly negligently overvaluing a property which it lent on in 2004. The borrower defaulted in 2007 and GMAC-RFC repossessed the property.

But Countrywide, in turn, made allegations of contributory negligence against GMAC-RFC for its lax lending practices.

On December 14, 2011, Judge Keyser ruled that Countrywide had not been negligent but he added that if it had been found liable, the judge would also have found that GMAC-RFC was contributory negligent for not verifying the borrower’s income and other information.

He ruled that GMAC-RFC contributed to its own loss and as a result he would have deducted 60 per cent of any money awarded to it if the court had found Countrywide liable.

Law firm Mills & Reeve consultant Ed Coulson says: “Sixty per cent is a significant reduction and should concentrate the minds of mortgage lenders when they are considering suing their own professional advisers.”

“In this case, the contributory negligence was not as gross as it has been in other cases I have seen with lenders - on that basis, one can expect to see reductions for contributory negligence increase significantly.”

  • Print
  • Comment

Daily Email Updates
If you enjoyed this article, sign up to receive the latest news and analysis from Money Marketing.

The Money Marketing CPD Centre
Build your annual CPD - you can log and plan your CPD hours for free with The Money Marketing CPD Centre.

Money Marketing Awards 2015
Put your firm forward as the leading practitioner in your field. Adviser and Advertising categories are open to entries - Enter Now.

Have your sayEdit my profile/screen name

You must sign in to make a comment

AXA Wealth


Fund Data

Editor's Pick



Poll

Two years on from the RDR, do you think consumers are better off as a result?

Job of the week

Latest jobs

View all jobs

Most recent comments

View more comments