Claims against auctioneers: (not) going going gone!

Auctioneers – daytime TV shows suggest they are a rather friendly, energetic bunch of people, but did you know they're facing an increase in professional negligence claims? We delve into what happens if complaints are made after the gavel falls.

When you think of an auctioneer, your mind probably goes to: (1) fast-speaking individuals; (2) people who can spot the slightest raise of a hand in a crowded room; and (3) BBC's Bargain Hunt (a throwback to lunchtime during Covid – no, just me?), but did you know there seems to be an uptick in professional negligence claims against auctioneers? We look at the new trend and what to look out for.

Auctioneers, as expected, owe a duty of care to their clients (the seller), but the duty also extends to those participating in the auction (the buyer) –not a particularly common position where a duty is owed to both parties in a transaction. Claims against auctioneers are typically brought for one of the following reasons:

1. A failure to ensure the property or product is as described.
2. A property or product is mis-valued.
3. A property or product is described incorrectly.
4. The property or product is from unknown origins or is stolen .
5. When the property or product is damaged in the auctioneer's care (either from the seller before the auction, or from the buyer after the auction).

It might seem peculiar that such claims are being pursued against the auctioneer – after all, doesn’t the problem lie with the other party to the contract? That might be the case, but auctioneers are perhaps an 'easier target'. Take for example a situation where a vase is listed at auction. Let's say it's described as an 18th century antique vase and sells for £2,000. On completion of the purchase, an internet research leads you to discover it's available online, brand new, for £19.99. You could pursue a claim against the seller for misrepresentation, but there's no guarantee that the seller can afford to pay. Furthermore, auction contracts often contain numerous liability exclusions. Whilst these might be open to challenge, the easier option is likely to be a claim against the auctioneer – who at the very least is likely to have professional indemnity insurance in place and with that the ability to meet redress.

On receipt of such claims, as well as the usual considerations in relation to liability, the auctioneer will also need to give thought to whether a recovery could be brought against the "other" party. 

The number of auctions is continuing to increase, with property sales via auction in particular rising steadily since 2021. This trend is only likely to continue, with the number of insolvencies and house repossessions taking place and we anticipate that consequently there will be a rise in the number of complaints against auctioneers. 

The risk to auctioneers certainly isn’t going going gone!