SAAMCO v York Montague [1996]

South Australia Asset Management Corporation v York Montague Ltd and Banque Bruxelles Lambert SA v Eagle Star Insurance Co Ltd [1996] UKHL 10, commonly known as the SAAMCO case, addresses issues of causation and remoteness of damage in English contract law. This legal dispute emerged from the property market crash in the early 1990s, with banks pursuing valuers for overpricing properties to recover lost market value.

In the South Australia case, a valuer provided a negligent valuation to a bank, advising that a property, intended as security for a loan, was worth more than its actual market value. The central question was whether the valuer should be held liable not only for losses related to the deficient security but also for additional losses resulting from a general fall in the property market.

The House of Lords held that the valuer was not liable for losses stemming from market fluctuations. Lord Hoffmann, delivering the judgment, outlined the principles guiding the determination of the scope of the valuer's duty. He emphasised the need to construe the agreement as a whole in its commercial setting and defined the scope of the duty based on what the law considers as best giving effect to the express obligations assumed by the valuer.

Lord Hoffmann distinguished between cases where a party assumes liability for all consequences of wrongful conduct and those where liability is limited to the consequences directly attributable to the wrongful act. He illustrated this distinction through an example involving a mountaineer seeking a doctor's advice about the fitness of his knee before embarking on a climbing expedition.

The Court of Appeal's principle, which held the valuer responsible for all consequences of the transaction, was criticised by Lord Hoffmann as being against common sense. He argued that a person under a duty to provide information for someone else's decision should not generally be held responsible for all the consequences of that decision but only for the consequences of the information being wrong.

The SAAMCO principle, as established by this case, excludes liability for damages that are not directly attributable to the inaccurate information provided by the valuer. It emphasises the fairness and reasonableness of limiting liability to the consequences of the information being incorrect, rather than extending it to all foreseeable risks associated with the course of action taken by the relying party.

The significance of the SAAMCO case lies in its impact on subsequent case law, particularly in distinguishing between cases involving the provision of information and those involving advice. The principle has been applied to limit liability in situations where an informant's duty is to supply information rather than to advise on a course of action. However, challenges may arise in precisely demarcating the boundary between providing information and giving directed investment advice in certain contexts.
Back to blog

UOL Case Bank

Upon joining, you become a valuable UOL student and gain instant access to over 2,100 case summaries. UOL Case Bank is constantly expanding. Speed up your revision with us now.

Subscribe Now

Where are our students from?

Yale University
Council of Europe
Baker Mckenzie 
University of Chicago
Columbia University
New York University
University of Michigan 
INSEAD
University College London (UCL)
London School of Economics (LSE)
King’s College London (KCL)
University of London
University of Manchester
University of Zurich
University of York
Brandeis University
University of Exeter
University of Sheffield
Boston University
University of Washington
University of Leeds
University of Law
Royal Holloway, University of London 
Birkbeck, University of London
SOAS, University of London
University of Kent
University of Hull
Queen’s University Belfast
Toronto Metropolitan University
Hong Kong University of Science and Technology
University of Buckingham

  • Criminal Practice

    Diagrams and Charts

    Our carefully designed diagrams and charts will guide you through complex legal issues.

  • Criminal Law

    Clear and Succinct Definitions

    Key concepts are concisely defined to help you understand legal topics quickly.

  • Property Law

    Statutory Provisions

    Statutory provisions are provided side by side with legal concepts to help you swiftly locate the relevant legislation.

  • Public Law

    Case Summaries

    We have summarised important cases for you so that you don't need to read long and boring cases.

  • Evidence

    Rules and Exceptions

    Rules and exceptions are clearly listed so that you know when a rule applies and when it doesn't.

  • Company Law

    Terminology

    Legal terms and key concepts are explained at the beginning of each chapter to help you learn efficiently.

  • Case Law

    Case law is provided side by side with legal concepts so that you know how legal principles and precedents were established.

  • Law Exam Guide

    Law Essay Guide

    You will learn essential law exam skills and essay writing techniques that are not taught in class.

  • Law Exam Guide

    Problem Question Guide

    We will show you how to answer problem questions step by step to achieve first-class results.

  • Conflict of Laws

    Structured Explanations

    Complex legal concepts are broken down into concise and digestible bullet point explanations.

  • Legal System and Method

    Legal Research

    You will learn legal research techniques with our study guide and become a proficient legal researcher.

  • Jurisprudence and Legal Theory

    Exam-focused

    All essential concepts, principles, and case law are included so that you can answer exam questions quickly.