Professional liability and property transactions
Litigation against professionals arising out of property transactions had grown significantly. Several reasons for this increase are evident. First, the law’s recognition that a professional may be sued not only in contract for breach of duty, but also in tort expanded the bases of professional liability. The decision of the House of Lords in Hedley Byrne v Heller  AC 465 paved the way for claims in negligence for economic loss, exponentially expanding the liability of professional persons. The removal of the necessity for a contractual nexus between the parties opened the doors for professionals such as solicitors, valuers, real estate agents and lenders to be liable to persons with whom they had not dealt. Leading on from the recognition of a duty of care owed by professionals has been the expansion of the categories of person to whom a professional may owe a duty of care. Cases such as Hill v Van Erp (1997) 188 CLR 159 and Perre v Apand (1999) 198 CLR 180 exemplify the judicial trend of finding a duty of care to be owed by a professional to a third party who is connected to a transaction, but who is not in a contractual relationship with the client. The rejection of the notion of proximity in favour of an approach which emphasises factors such as vulnerability of the person, assumption of responsibility by the professional and reasonable foreseeability of reliance on the advice given, has contributed to a widening of the scope of professional liability. The third, and to a certain extent most significant factor, is the increasing use of the Trade Practices Act 1974 (Cth) and State Fair Trading Acts in litigation against professionals. The move of professionals to more commercial activities and practices has also heralded a greater application of s 52 of the Trade Practices Act 1974 (Cth) to their conduct. Once described as the ‘exocet’ in the commercial lawyers arsenal, s 52 is consistently raised in litigation and has expanded the liability of professionals and the array of remedies available to potential litigants. The expanse of litigation related to property transactions suggests that these three factors have impacted significantly on the professionals involved in these types of transactions.
The growing complexity of litigation for professional liability and the interaction of remedies in contract, tort, equity and under statute prompted the need for a critical and comprehensive analysis of the spectrum of liability of property professionals.
Impact and interest:
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|Keywords:||professional liability, property transactions|
|Subjects:||Australian and New Zealand Standard Research Classification > LAW AND LEGAL STUDIES (180000) > LAW (180100) > Property Law (excl. Intellectual Property Law) (180124)|
|Divisions:||Current > QUT Faculties and Divisions > Faculty of Law|
Current > Schools > School of Law
|Copyright Owner:||Copyright 2004 The Federation Press|
|Deposited On:||07 Aug 2007|
|Last Modified:||29 Feb 2012 23:06|
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