A New Fund Monitor Case: Eiger Funding (PCC) Limited v Ridge and Partners LLP [2026] EWHC 609 (TCC)

Introduction

1. This note summarises the judgment in Eiger Funding (PCC) Limited v Ridge and Partners LLP [2026] EWHC 609 (TCC), handed down on 16 March 2026.[1] The case concerns the liability of an Independent Monitoring Surveyor (“IMS”) appointed by a lender in connection with a property development loan. It is an important decision that clarifies the scope of duty owed by monitoring surveyors, the consequences of conflicts of interest, and the approach to quantifying damages in “no transaction” cases. Sean Brannigan KC, Joint Head of Chambers at 4 Pump Court, acted for the successful Claimant.
2. The judgment is set out below in summary form, followed by a discussion of how it fits within the developing line of authority on monitoring surveyor liability, including Lloyds Bank v McBains Cooper and Bank of Ireland v Watts Group: both of which also involved 4 Pump Court Barristers.

The Facts

3. In November 2018, the claimant, Eiger Funding (PCC) Limited (“Eiger”), made a £12.9 million loan to Signature Living Residential Limited (“Signature”) to fund the conversion of an existing building at 60 Old Hall Street, Liverpool, into 122 residential flats. The loan was brokered by North Wall Capital LLP (“NWC”), a specialist credit investment firm which acted as Eiger’s investment manager.
4. The defendant, Ridge and Partners LLP (“Ridge”), was engaged to act as the IMS for the project. Critically, Ridge had also previously acted as Quantity Surveyor for the developer, Signature, on the same project. This dual role was central to the dispute.
5. On 9 November 2018, Ridge produced “Report 16” — a monitoring report addressed to Eiger. This was the key document upon which Eiger relied in deciding to enter the loan. Eiger’s board approved the loan on 12 November 2018, and the loan agreement was executed on 30 November 2018.
6. The development made negligible progress thereafter. The relevant Signature companies were placed into administration in April 2020. Eiger suffered an unrecovered loss of approximately £10.8 million (being the £14.1 million outstanding under the loan less £3.3 million in recoveries).
7. Eiger sued Ridge for professional negligence, advancing a “no transaction” case: that it would not have entered the loan agreement at all had Ridge properly discharged its duties as IMS.

The Issues

8. Eiger’s case was pleaded under four heads of breach:

(a)        The Conflict of Interest Issue: Ridge acted as both Quantity Surveyor for the developer and IMS for the lender, in violation of RICS professional guidance, without obtaining the required “Informed Consent”.[2][3]

(b)        The Pricing Issue: Ridge failed to advise that the contract sum for the construction works was too low and carried a significant risk of contractor failure.

(c)        The Cost to Completion Issue: Ridge failed to provide its own clear and independent estimate of the costs to complete the works, instead relying on unexplained figures provided by the developer.

(d)       The Relationship Issue: Ridge failed to advise that the close relationship between the developer and its connected building contractor posed risks of cost overruns and programme slippage, and that what was nominally a fixed-price contract had in substance become a target cost arrangement.

Findings on Duty of Care

9. Ridge went into the trial denying that it owed Eiger any duty of care at all, whether in tort or in contract. By the end of the cross-examination at trial that position had disappeared: and the Court confirmed that this duty encompassed an obligation to:

(a)        advise upon the adequacy of the contract sum;

(b)        identify and report on risks that could result in cost overruns;

(c)        advise on risks that could impact the completion timeframe; and

(d)       provide the lender with an honest and informed assessment of the true costs to complete the development.

10. This is consistent with the scope of duty recognised in earlier cases, particularly Lloyds Bank v McBains Cooper (discussed below), and reflects the purpose for which lenders appoint an IMS: to provide an independent check on the developer’s representations before funds are advanced.

Findings on Breach

11. The judge found Ridge to be in breach of duty across all four heads. The key findings were as follows.
12. Pricing and Cost to Completion. Report 16 was described as a “confusing and unsatisfactory document.” The judge found that Ridge breached its duty by failing to advise Eiger that there was a significant risk that substantial additional costs would be incurred over and above the developer’s estimates.
13. The Relationship Issue. Ridge failed to inform Eiger that the developer’s fixed-price building contract had in substance been converted into a target cost contract, which had the effect of transferring the risk of cost overruns from the contractor onto the lender. Ridge also stated that the £7.6 million cost was “agreed,” failing to advise that an agreement between two highly related companies lacked legal formality and commercial value.
14. Conflict of Interest. Ridge was found to have breached RICS guidance by failing to obtain formal Informed Consent regarding its conflict of interest. The judge observed that Ridge was effectively “marking its own homework”: the original £10.2 million construction estimate had been produced by Ridge in its capacity as QS in 2015, and yet Ridge failed to warn Eiger that construction costs had risen by approximately 20% in the intervening period.

Causation

15. Ridge argued that Eiger did not actually rely on Report 16, pointing to the absence of any express reference to it in Eiger’s board minutes. The judge rejected this argument. The “no transaction” case was therefore made out.
16. The judge also dealt with, and rejected, Ridge’s defence of contributory negligence. Ridge had originally pleaded that Eiger acted in a “hasty and slapdash way” and failed to carry out proper due diligence. However, Ridge barely pursued these matters in cross-examination, did not call its own lending expert to give evidence, and formally abandoned several of its pleaded grounds at trial. The judge accepted the evidence of Eiger’s lending expert that it was reasonable for Eiger to rely on Report 16.

Measure of Damages

17. The approach to damages is of particular interest. The judge applied the framework established by the Supreme Court in Manchester Building Society v Grant Thornton UK LLP[4] rather than the older SAAMCO[5] information/advice distinction. The key question was: what risk was Ridge’s duty supposed to guard against? The judge’s answer was clear: the risk that Eiger would enter an unduly hazardous loan on the basis of unrealistic construction cost estimates. The loss suffered was the direct fruition of that risk.
18. The judge treated this as a “distressed asset” case: the recoverable loss crystallised on 30 November 2018 (the date the loan was executed), because the package of rights Eiger acquired was substantially less valuable than it had been led to believe on the basis of Ridge’s report.
19. To quantify the loss, the judge benchmarked the project against BCIS data[6] — the standard industry index of construction costs published by RICS. Although Ridge’s expert argued that BCIS data was an “average of averages” and unsuitable for pricing a specific project, the judge found that in circumstances where Ridge lacked the granular information to provide accurate reassurances, it should have used the BCIS data as an “objective yardstick” to warn Eiger that the developer’s cost estimates were suspiciously low.
20. Ridge had advised that the cost to complete was approximately £2.9 million. The judge found that the true open-market cost to complete was approximately £5.4 million (based on an overall realistic project cost of £13.5 million). The damages were calculated as the difference between these two figures, yielding an award of £2.5 million. This was significantly less than Eiger’s full unrecovered loss of £10.8 million, reflecting the application of the scope of duty principle: Ridge was not liable for all the consequences of the loan going wrong, only for the consequences of its advice about construction costs being wrong.

The Case in Context: Monitoring Surveyor Liability

21. The Eiger judgment is the latest in a developing line of TCC authority on the duties owed by monitoring surveyors appointed by lenders in development finance transactions. The three principal decisions are now:

(a)        Lloyds Bank Plc v McBains Cooper Consulting Ltd [2016] EWHC 2045 (TCC);[7] In which Sean Brannigan KC acted for the successful Defendant in both first instance and the court of Appeal

(b)        The Governors and Company of the Bank of Ireland and another v Watts Group plc [2017] EWHC 1667 (TCC);[8] in which Jessica Stephens KC from 4 Pump Court acted; and

(c)        Now Eiger Funding (PCC) Limited v Ridge and Partners LLP [2026] EWHC 609 (TCC).

Lloyds Bank v McBains Cooper (2016)

23. In McBains Cooper, the bank lent £2.5 million to fund the redevelopment of a church. McBains Cooper was engaged as the project monitor. After 21 months the development was unfinished and the funds were exhausted. The bank sued the monitor for professional negligence.
24. The TCC found McBains Cooper liable for a significant portion of the bank’s £1.4 million loss. The monitor’s duties were held to include:

(a)        making regular site visits;

(b)        providing accurate progress reports;

(c)        promptly notifying the lender of variations and additional costs; and

(d)       discussing funding shortfalls with the lender at the earliest opportunity.

25. However, the bank was found 33% contributorily negligent for its own failure to act on warning signs.[9] The net damages award was £415,439.95, after deduction for the lender’s contributory negligence and failure to mitigate. On causation, the court held that the monitor could not be liable for losses that would have arisen even if the advice had been correct: damages were limited to sums which would not have been advanced but for the negligent reports.

Bank of Ireland v Watts Group (2017)

26. In Watts, the Bank of Ireland instructed Watts, a quantity surveyor, to check the costings supplied by a developer and to approve drawdown requests. Watts prepared an Initial Appraisal Report and produced monthly monitoring reports thereafter.
27. The TCC dismissed the Bank’s claim entirely, holding that Watts had not fallen below the standard expected of a reasonable monitoring surveyor. In particular, the court found that Watts had conducted a reasonable “sense check” of the developer’s construction cost estimate by reference to three comparables, and that the existence of a fixed-price contract supported the reasonableness of the estimate.[10]
28. The Watts decision demonstrates that the monitoring surveyor’s duty is not absolute. A monitor who carries out a reasonable process of verification, proportionate to the information available, will not be found negligent merely because the development later fails. The court’s robust criticism of the Bank’s expert (who was found to lack independence and to have applied the wrong test) serves as a reminder that claimants in monitoring surveyor cases must adduce credible expert evidence.

Key Themes Emerging from the Authorities

30. Taken together, these cases establish several important principles for practitioners:
31. Scope of duty. A monitoring surveyor owes a duty to exercise reasonable skill and care in checking costs, approving drawdowns, and reporting on progress. The duty extends to providing honest and informed assessments of construction costs and flagging risks that could affect the viability of the development. However, the duty is not unlimited: the monitor is not a guarantor of the project’s success.
32. Conflicts of interest. Eiger is the first reported decision to find breach of duty arising specifically from a monitoring surveyor’s failure to manage a conflict of interest in accordance with RICS guidance. Where a surveyor has acted for both borrower and lender on the same project, the risk of failing to provide a truly independent report is acute. The judge’s observation that Ridge was “marking its own homework” is a phrase likely to resonate in future cases.
33. “But for” causation. In both McBains Cooper and Eiger, the court applied a straightforward “but for” test: would the lender have advanced the funds (or continued to advance funds) if properly advised? Establishing causation requires evidence that the lender actually relied on the monitoring report, whether directly or through an intermediary (as in Eiger, where reliance was established through NWC as Eiger’s agent).
34. Measure of damages. Eiger is significant for its application of the Manchester Building Society framework to monitoring surveyor claims. Rather than asking whether the claim falls into the “information” or “advice” category under the old SAAMCO rubric, the judge focused on the risk that the duty was intended to guard against. This approach has the potential to limit damages significantly: in Eiger, the total unrecovered loss was £10.8 million but the damages were capped at £2.5 million, being the difference between the advised and the true construction costs. This reflects the principle that the monitor is responsible only for the consequences of its construction cost advice being wrong, not for all the consequences of the loan failing.
35. Contributory negligence. The treatment of contributory negligence differs markedly between the cases. In McBains Cooper, the lender was found 33% to blame for its own failure to respond to warning signs. In Eiger, the defence of contributory negligence was rejected outright, largely because Ridge failed to pursue it properly at trial. Whether a lender’s own due diligence failings will reduce the award is therefore highly fact-sensitive, and defendants who intend to run this defence must ensure they do so rigorously.
36. Expert evidence. The quality of expert evidence has been decisive in these cases. In Watts, the claim failed largely because the court found the lender’s expert to be unreliable and lacking in independence. In Eiger, the judge relied on BCIS benchmarking data as the measure of true construction costs. Future claimants would be well-advised to ensure their quantum experts adopt a recognised, objective methodology.

Conclusion

37. Eiger v Ridge is an important addition to the body of TCC authority on monitoring surveyor liability. It confirms that an IMS owes a meaningful duty to exercise independent professional judgment and cannot simply parrot figures supplied by the borrower. It is the first case to find breach arising from a failure to manage a conflict of interest under the RICS guidance. And it demonstrates, through its application of the Manchester Building Society framework, that damages in “no transaction” cases will be limited to the consequences of the specific advice being wrong — a principle that will significantly affect the quantum recoverable in future claims against monitoring surveyors.

[1]Eiger Funding (PCC) Limited v Ridge and Partners LLP [2026] EWHC 609 (TCC), per Mr Adrian Williamson KC sitting as a Deputy Judge of the High Court. Judgment handed down 16 March 2026.

[2]RICS Professional Guidance, UK Lender’s Independent Monitoring Surveyor, 1st edition, March 2015, paragraph 2.1.5.

[3]RICS Professional Standards and Guidance, Global, Conflicts of Interest, 1st edition, March 2017, Part 3 and paragraph 4.5.

[4]Manchester Building Society v Grant Thornton UK LLP [2021] UKSC 20.

[5]South Australia Asset Management Corp v York Montague Ltd [1997] AC 191 (“SAAMCO”).

[6]BCIS: Building Cost Information Service, published by RICS.

[7]Lloyds Bank Plc v McBains Cooper Consulting Ltd [2016] EWHC 2045 (TCC).

[8]The Governors and Company of the Bank of Ireland and another v Watts Group plc [2017] EWHC 1667 (TCC).

[9]The bank’s own contributory negligence was assessed at 33%, reducing the award accordingly: ibid.

[10]The Bank’s expert was criticised for lacking independence, applying the wrong test, and attempting to mislead the court: ibid.

Article written by Alice Carse. 

Read the full judgment here.

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Sean Brannigan KC

Call 1994 King's Counsel 2009

Alice Carse

Call 2008

Related practice areas

Commercial Litigation