Eiger Funding v Ridge: Redefining the limits of monitoring surveyor liability

The High Court’s decision in Eiger Funding (PCC) Limited v Ridge and Partners LLP [2026] EWHC 609 (TCC) provides important new guidance on the scope of a monitoring surveyor’s duty and, critically, the limits of recoverable loss in lender claims.

Why Eiger Funding v Ridge matters for both lenders and monitoring surveyors

Cases involving failed development finance are not new. What distinguishes Eiger Funding v Ridge is the court’s detailed analysis of what a monitoring surveyor is responsible for, and just as importantly, what they are not.

While the claimant lender successfully established breach, causation and reliance, the damages awarded were significantly lower than the overall loss. That outcome reflects the continued influence of the Supreme Court’s decision in Manchester Building Society v Grant Thornton and signals a more constrained approach to recovery in professional negligence claims.

The background

The claim arose from a £12.9 million loan advanced to fund the completion of a residential development. The lender relied on advice from an independent monitoring surveyor in assessing the viability of the project.

That advice was found to be deficient in several key respects:

• construction costs were materially underestimated
• no clear or independent assessment of the cost to complete was provided
• risks arising from the developer–contractor relationship were not adequately identified
• a conflict of interest was not properly managed

The court was critical of the monitoring report, describing it as lacking proper analysis and clarity, and failing to provide a reliable foundation for lending decisions.

“No transaction” claims in the development lending context

A central feature of the case was the claimant’s argument that it would not have entered into the loan at all had proper advice been given.

The court accepted this as a classic “no transaction” case. On the facts, the monitoring surveyor’s advice formed part of the decision-making process and was a condition precedent to the lending.

This confirms that, in principle, monitoring surveyors can be exposed to “no transaction” claims where their advice is fundamental to the lender’s decision.

Why a successful claim still led to limited recovery

Despite succeeding on causation, the claimant did not recover its full losses.

Instead, the court applied the Manchester Building Society framework, focusing on the purpose of the duty and the specific risk the surveyor was engaged to address.

In this case, that risk was limited to the accuracy of advice on construction costs and the cost to complete. Losses flowing from the wider failure of the development fell outside the scope of that duty.

The result was a significant reduction in damages. Although the overall loss exceeded £10 million, recovery was limited to £2.5 million, representing the financial impact of the incorrect cost advice.

This reinforces that even where a “no transaction” case is established, recovery will be confined to losses falling within the scope of the duty undertaken.

Monitoring surveyors must scrutinise developer estimates

The judgment reinforces that a monitoring surveyor must do more than relay information provided by the developer.

In this case, the surveyor relied heavily on developer figures without sufficient scrutiny. There was no meaningful benchmarking or independent validation of the construction costs.

The court found that a reasonably competent surveyor should have identified that the figures were unusually low and carried a clear risk of cost overrun. In particular, the failure to test those figures against objective benchmarks was a critical omission .

The decision therefore underlines that an independent monitoring surveyor must exercise genuine independent professional judgment and cannot simply adopt borrower-supplied figures without proper analysis. This aspect of the judgment is likely to be widely cited in future disputes concerning monitoring surveyor liability.

A cautionary note on conflicts of interest

The case also addresses conflicts of interest in a way that will be of practical importance to surveyors.

The defendant had previously acted for the developer and was, in effect, reviewing its own earlier work. The court found that this gave rise to a conflict which was not properly managed in accordance with RICS guidance.

Importantly, the court emphasised that informed consent is not a formality. It requires a clear explanation of the conflict and its implications, and genuine agreement from the affected party.

This is one of the first reported decisions to establish liability for breach arising from a failure to properly manage a conflict of interest in this context and signals a renewed focus on strict compliance with RICS guidance.

Where risk shifts back to the lender

The judgment also highlights risks for lenders beyond professional negligence.

Although the project was structured as a fixed price contract, the relationship between the developer and contractor meant that, in practice, it operated more like a target cost arrangement.

The effect was to shift the risk of cost overruns towards the lender.

The court’s analysis is a reminder that lenders cannot rely solely on contractual labels and must consider the underlying commercial dynamics of a project.

Practical implications for lenders and surveyors

This decision highlights several points of practical importance.

For lenders, it reinforces the need to scrutinise monitoring advice carefully, particularly where assumptions are based on developer-provided figures. It also underlines that even where a claim succeeds, and breach of duty is established, damages may still be limited to those losses the monitoring surveyor was actually responsible for, rather than the lender’s overall losses.

For monitoring surveyors, the judgment emphasises the need for clear, independent analysis and transparent reporting. In particular, surveyors must be able to demonstrate that they have critically assessed construction costs rather than relying on information provided by the borrower.

Key takeaways

The judgment provides clarity on the scope of a monitoring surveyor’s duty of care to their clients and to the financial position of the project as a whole.

It confirms that a monitoring surveyor is under a substantive obligation to exercise independent professional judgment and must not merely adopt figures provided by the borrower.

It also demonstrates that, even in a successful “no transaction” claim, recovery will be limited to losses falling within the scope of the duty undertaken.

Finally, the case is likely to be one of the first to establish liability for breach arising from a failure to properly manage a conflict of interest under RICS guidance.