Surveyors offered indemnity cover

Exclusive by Glenda Thisdell



The Royal Institute of Chartered Surveyors (RICS) is gearing up to offer low-earning members a personal indemnity insurance package to protect them against negligence claims.

The package, which could be available early next month, is designed to prevent surveyors earning £10,000 or less (especially those retired or who have been made redundant) being hit by potentially crippling claims several years after carrying out a survey.

A RICS spokesman said the personal insurance is needed because people are "increasingly aggressive" about suing when professional advice is deemed to have gone wrong.

Low-earning surveyors may find it hard to get their own insurance and often rely on their firms for cover, but there are a growing number of instances where professionals must protect themselves. There are cases, said the RICS spokesman, of people taking as advice comments made in pubs or other informal gatherings and later suing.

The risk of lawsuits against professionals - including a range of construction industry personnel such as consultants and contractors in design and build projects - was dramatically brought to public attention last week by the case of RICS fellow John Babb. He faces damages claims and legal fees of £40,000 after losing his legal battle against a client who claimed he failed to notice cracks during a 1992 mortgage survey of a house she went on to buy.

At that time Babb worked for chartered surveyor Clive Walker Associates; he subsequently left the firm, which later went bankrupt without run-on liability cover. Babb was thus sued personally and lost, losing again on appeal. He had argued that his duty was to the firm not the client, but in letting the appeal court ruling stand, the Lords made it clear that any advice-giving professionals may be held personally liable for their work.

Babb's solicitor, Peter Maguire of CMS Cameron McKenna, described the law as "inadequate" in leaving professionals exposed for years, especially when "the remuneration which employees receive is not commensurate with the risk of attracting a potentially ruinous personal liability".

James Bessey, a partner withlegal firm Hammond Suddards Edge, stressed that individuals should be careful to only ever sign off reports in the name of their firm or "for and on behalf of" their firm, and not simply as themselves. Babb, he said, made this critical error.