Project managers who monitored construction of a residential tower block on behalf of a bank which loaned the money needed to bring the project to fruition have ended up carrying the financial can after the developers went bust.
The bank lost over £8 million when the developers sank into administration. The bank took action against the project managers, who agreed to settle the claim for £3.35 million. The project managers themselves subsequently launched proceedings, seeking to recover at least part of their loss from specialist commercial property surveyors who had given valuation advice to the bank.
The surveyors conceded that their assessment of the project’s value was not carried out with reasonable care. However, in dismissing the project manager’s contribution claim, the High Court found that the advice that the surveyors gave had played no significant part in the bank’s decision to fund the development. In those circumstances, the surveyors’ negligence had not caused the bank’s loss.