8 Biggest Appraiser Liability Cases (Updated) By Peter Christensen (Appraiser Law Blog)
I have described below the 8 biggest appraiser liability cases with which I am familiar that are currently pending in the U.S. These are cases that specifically name appraisers, appraisal firms or appraisal management companies as defendants. That's an important distinction because the appraisal industry has been fortunate that only a small fraction of litigation about financial losses blamed on appraisal deficiencies actually names any appraisal defendants. Yet, the stakes below are very significant for the appraisal industry because the realistic measure of damages at issue in just these 8 cases -- not the plaintiffs' puffed-up alleged damages -- is more than what the whole industry paid last year for its professional liability insurance on a collective basis, by a factor of 3 or 4.The cases below are ranked based on the approximate alleged damages demanded by the plaintiffs or the proposed settlement amount. The first two cases involve incredible damage claims, but I wouldn't draw any conclusions about those two cases, other than the fact that they show appraisers are very much at risk for big claims made by parties who are neither their clients nor intended users. The plaintiffs' claims in those two cases are outlandish. One thing that is remarkable overall about these appraiser litigations is that they continue to be filed long after the peak of the real estate bubble and beginning of the lending crisis in 2006-2007. Most of the claims in these cases concern appraisals delivered in 2005-2006. See related article on www.readimember.org (registration is required and limited to appraisers): "What is the Statute of Limitations for a Lawsuit Against an Appraiser in My State?"
Source: Appraisal Legal Defense and Insurance Blog by Peter Christensen and Robert Wiley - Legal issues and insurance matters affecting residential and commercial real estate appraisers
Posted by Brian Davis on March 26, 2012 in E&O - Errors & Omissions
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