Court of Appeal victory for Walker Morris in professional negligence case

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Specialists from Walker Morris’ Banking Litigation team have won a significant victory in the Court of Appeal in relation to the proper construction of standstill agreements. In an important judgment, the Court ruled that a standstill agreement between a mortgage lender and a firm of surveyors was drafted widely enough to cover claims in deceit.

Parties enter into standstill agreements to suspend the usual limitation period for bringing a claim. Walker Morris acted for the mortgage lender, Mortgage Express, in its appeal against a decision that a standstill agreement it had made with Countrywide Surveyors Limited did not have the effect of suspending time for a deceit claim it had brought against the firm.

By way of background, the claim concerned valuations which had been prepared for a number of properties. Mortgage Express originally alleged negligence and breach of contract with respect to the valuations. When it later brought its actual claim, allegations of deceit were included.  Countrywide denied the allegations, arguing that there was a limitation defence because the agreement did not extend to cover claims in deceit. The Judge at first instance ruled in their favour. That ruling was successfully overturned in the Court of Appeal, which concluded that the relevant provisions in the standstill agreement had been drafted very widely and therefore claims in deceit were included within its scope. Mortgage Express had also specifically reserved its right from the start to amend or raise additional allegations.

The decision represents a significant outcome for Mortgage Express and has wider implications regarding the nature of claims brought against professionals.