Avoiding Litigation Thread.

Dr. Keith Swift has offered to host this Avoiding Litigation thread. Please join in on this discussion.

*Litigation is not something that the average inspector wants to talk about. And very few inspectors want to publicly acknowledge that they’ve been sued; it’s embarrassing. I have been sued, more than once, and I was totally innocent, which taught me that the judicial system is not only easily corrupted but has made a laughing stock of justice. The reasons for this corruption are obviously complicated, but are best understood when one realizes that although American jurisprudence is based on the British system, the Americans did not include the British concept of “common law,” which takes into account the circumstances of a case and the dictates of plain old common sense. Consequently, blue-collar terrorists can file a lawsuit, confident that they have nothing to lose by doing so, and feel even more confident in the knowledge that the insurance company is very like to settle the case before it goes to court, in other words, to simply pay them to go away. As I have said in various other articles, the courts are no longer a forum for justice but a place in which huge sums of money change hands. *

*Many inspectors don’t want to hear this, and I can’t tell you how many times I’ve been accused of being paranoid or an alarmist, and been told that only incompetent inspectors get sued, or that our contracts and our standards protect us against litigation, but it’s just not true. The truth is that there are thousands of ways that we can protect ourselves against litigation, and all of us should use this forum to share those ways with one another. Let me give you just one example. This week an inspector emailed me to report on a lawsuit over the wood preservative copper naphthenate, which appears as timber with a greenish tinge in many foundation crawlspaces. I immediately wrote a narrative that serves my clients and protects me, and then posted it on the message board under “Structural,” to share with others. Could one such narrative help avoid a lawsuit? Yes, it could, and it could also piss-off realtors and earn you the reputation of being a deal-killer. These are the “truths” that we must live with. But, to quote an ancient Chinese axiom: “Truth is what the rich say.” Good luck. *

Keith Swift

What’s that? :wink:

The problem is that it exists more outside of court than it does inside of court:roll:

Oddly enough, I had a small claims lawsuit come in last week that is sueing me and my company (I am owner/operator, one & the same) and the vendors and the contractors who worked on their problems. This will be my fifth lawsuit in 4500 inspections. How anyone can hold the inspector accountable for underground sewer lines that are invisible is beyond me. On the day of my revisit, the city had backhoe and other equipment in front of the house from a backup caused by collapsed sanitary sewer lines, not only at this house but quite a ways down the street as well. When I defend myself from this one, I will be asking for the judge for advice as to how I can hold the lawyer responsible as well as the plaintiffs.

I was once named in a lawsuit for $870,000.00 for an oil spill that occured more than 3 weeks after the inspection. It was proven that it happened more than 3 weeks after the inspection yet my insurer settled for a mere 5% because that was cheaper than fighting for my innocence.

This was another example of how justice is not served but the court system and those who work in it. I do not believe in getting justice from such a system but I do intend to fight tooth & nail to defend myself from anyone who takes a run at me.

Roy D Cooke Jr.
Burlington, Ontario

It does my heart good to hear from people like you, who are determined to fight for what’s right. What a privilege it was to learn about the Americans who fought back on that fateful 911 flight, and to hear Todd Beamers echo down through the years: “Let’s roll.” It’s time for inspectors to close ranks and demand justice. Let me know how it turns out, and if I can help in any way let me know how.


Learn how to say latent defect! The lawyer is not fairly representing his client when he knowingly takes on a case that by the facts alone (latent) are well beyond the SOP, your knowledge, and your ability to comment on, would dictate that you have no responsibility, let alone your contract provision, and the fact that they will have to prove 5 points in negligence; given the facts of the issue and that the inspection was visual…, that will be impossible to prove. Obviously the client is not learned and is going on the advice of the lawyer who by using the shotgun approach is hoping to snare someone. The lawyer should be advising the plaintiff not to sue those who have no fault in the matter. Case law, which is plentiful in the case of latent defects speaks volumes about who will succeed in such a case. Too bad the lawyer is not advising the client appropriately based on case law. I guess he needs to collect a pay cheque and appears to be working on behalf of the plaintiff when in fact his is doing the client a disservice.

In this case I hope you do not have insurance. Maybe you should make that known. It is unlikely they will proceed knowing that the well is dry.

What can I do to help?

Nice to see you posting here, and welcome!


I wonder is there any way to get a few Home Inspectors to come as expert witnesses and then turn around and sue the other person when they loose the case.
This might be something to remind their lawyer that you have some long time Home inspectors who are willing to come to court and show that you are not responsible .
Roy Cooke sr… R.H.I… Royshomeinspection .

I guess it works Maw quit cooking with Cheese.

Roy Sr.

Good point. That is what took place in this case.


Good one Raymond . Roy you might want to copy this and send a copy to the lawyer and the other people letting them know you will be going after your expensis and also for your expert witnesses.
Roy Cooke sr.

**Buyers get no help from ancient rule **** **

The Dotted Line Alan Silverstein
Saturday February 15,1997 New Homes Section Toronto Star

While the world prepares to welcome the 21st century, much of real estate is still governed by a 13th century doctrine — caveat emptor, or buyer beware. Although sellers have intimate knowledge about an existing property, the law only imposes a narrow duty on them to disclose defects in its physical condition. (New home buyers are protected by the Ontario New Home Warranty Program.)

Property defects fall into two categories, patent and latent. Patent defects are obvious flaws buyers should detect inspecting a property with ordinary care. Example: a crumbling chimney. Latent defects are not as apparent. They would not be revealed by any inquiry a buyer could make before closing a deal.

Different disclosure rules apply to each type of defect. Sellers do not have to draw alert buyers to patent defects; caveat emptor prevails. The onus is on buyers to ascertain the physical condition of what they are buying.

The law on latent defects is much more complex. Vendors have a duty to disclose latent defects that render the premises dangerous. Similarly, any latent defects which vendors know (or ought to know) would render the premises unfit for habitation must be disclosed.

However, sellers have no Iegal obligation to volunteer information about latent defects that only affect the value of a property, provided they do not pose a health or safety risk. Once again caveat emptor applies, although the latent detect might be a material factor which could have a negative effect on a property’s value. The presence of methane gas in well water is an example).

All this assumes the vendor makes no attempt to deliberately conceal patent or latent defect. Fraud, mistake and misrepresentation are exceptions to the rule of caveat emptor.

To fully protect themselves, home buyers must ask pertinent questions about specific areas of concern, add the appropriate clauses to their agreement of purchase and sale, and conduct a proper inspection (usually involving a home inspector).

In the U.S., the heyday of caveat emptor has passed. In most states, either “seller disclosure” Iaws force sellers to reveal defects to prospective buyers, or the real estate industry itself has made a standard disclosure form mandatory when listing a home.

What must be divulged? The U.S test is relatively clear-cut— “known hidden defects,” that is, latent defects.

Unfortunately, the Canadian real estate industry hasn’t embraced the concept of “seller disclosure” as warmly. The B.C. Real Estate Association was the first to make a property condition disclosure statement mandatory for all MLS listings in 1993. More than three years later, only a handful of boards in Ontario have done the same. While OREA’s vendor property information statement is voluntarily used by some boards and realtors, its acceptance is far from widespread.

Seller disclosure is not meant to replace a home inspection. The OREA form states. “Purchasers still must make their own enquiries.” Rightly so, since purchasers are to assume patent defects with a resale home, unless clauses to the contrary appear in an offer.

While buyers directly benefit from seller disclosure, realtors have been spearheading the reform movement in the U.S. Why? Self-interest. Seller disclosure helps insulate agents from potential liability to purchasers, by shifting the blame for undisclosed defects from realtor to vendor.

Later this year the real estate industry will be given the power to “self-manage.” One of its first moves should be the mandatory use of seller disclosure, at least in residential real estate transactions. The public demands it.

Gentlemen: we’re traveling down the same old beaten path, talking about standards of practice and contracts, and what’s right and what wrong. Plaintiffs and their attorneys could care less about such moral imperatives. They know that ninety-five percent of all cases will be settled before they even get to court. And, if a case does get to court and the defendent wins, that defendant is not likely to compensated for attorney’s fees and lost time. In fact, it is more likely that the defendant’s policy will be cancelled, or the premiums raised. What we want to share with one another is ways to “avoid litigation.” For instance, I will never rely on my contracts and standards to protect me. In this particular case, I would select a narrative that explains, that although I flush water through every active fixture and evaluate the draw, I cannot see inside a main sewer pipe, and recommend that it be video-scanned, within the contingency period or before the close of escrow. That is a reasonable recommendation, and no one has ever complained about it. However, that is only one of many narratives that I have regarding a main sewer pipe. I have others that recommend a video-scan due to the age of the residence, the presence of mature trees in the general vicinity of the sewer pipe etc, etc. We must meet these potential threats, head-on. Roy, I wish you well.

Yay Keith! Thanks for another enlightening post.
Your fan, Cheryl


Keith, no offence, there is no way I am going to start putting in disclaimers for every conceivable threat. I don’t believe in producing reports full of disclaimers. I try and provide the most accurate inspection based on my years of experience. Disclaimers are not going to stop you from being sued. It is only a disclaimer that hopefully someone with “common sense” would act on. Disclaimer or not advice not taken and heeded is the purchasers fault. They have a duty to excercise due dilligence, not following advice is hardly due dilligence is it?

As far as I am concerned the blame should be placed squarely on the insurers for not fighting. I understand the American Ladder Manufactures Association has successfully defended all claims and has never been sued successfully. Maybe that is what our Associations should be doing and forget the insurers, they are scum suckers.

There are a lot of conclusory [and accusatory] statements in this post but nothing in the way of supporting fact. I, too, have been sued twice and both times exonerated thanks to vigorous defense put up by my E & O insurance carrier. I have also been reported to the Disciplinary Committee of the Supreme Court by an out of state lawyer who didn’t want to pay for services rendered. I was exonerated then, as well. If you hold yourself out as a professional and you practice for long enough, you will be sued. Guaranteed. It is a cost of doing business.

Contrary to the assertion above, people who file lawsuits have quite a bit to lose, even if they are successful. For one thing their lives are an open book, defense lawyers can probe far and wide during discovery. They can be compelled to turn over tax returns, medical records, business records and so on. There is the cost of prosecuting a case: court costs, attorneys fees, whether hourly or contingent, records fees, deposition fees, copying costs, postage, you name it. If they are not successful, they have thrown good money after bad.

Lawyers who take unmeritorious cases do not last long in the profession. I have noticed that the folks who complain loudest about the American legal system are the fastest ones to the court house when they have a wrong to be redressed.

You cannot prevent yourself from being sued. But you can make it easy for your attorney to defend you and avoid being held accountable by managing client expectations, having a signed agreement, following the SOP and clearly documenting your findings.

Not if they don’t want to lose a lot of money.

Yes and, by and large, those are the meritorious ones. By settling, the defendants save money both in attorneys fees and damages.

Defendants win the vast majority of cases that are tried either by an outright defense verdict or by a vastly improved result from the plaintiff’s demands.

The American Rule is that all parties bear their own costs. This rule prevents a lot of suits and promotes settlement of most suits. Some jurisdictions, including Pennsylvania, have statutory remedies for truly frivolous suits that permit prevailing defendants to recover tort damages from plaintiffs who file frivolous suits.

Individual Home Inspectors E & O insurance is not experience rated. Rates will go up if the experience of the entire class warrants it. Home Inspectors who are constant defendants of meritorious suits will likely wear out their welcome with the insurer.

Again, this will not prevent a suit but it will help you avoid being held accountable.


I think you use the term “meritorious” deleteriously. Insurance companies often settle because it’s cheaper - thereby sacrificing the inspector’s good name in the name of economy. THAT’S why Tort reform is needed!


Well in Mr. Cookes case he is going to have to represent himself from what we all know is a latent defect well outside his experience and that of the SOP. There is no way any competent judge would side with the litigant given what the standard of the profession is.

The litgant will also have to prove his claims that Mr. Cooke was negligent. How will they prove that when it is hidden defect, and is well beyond defendable SOP’s? The lawyer in my opinion is wasting his clients money and the client is naive too.


Insurance Companies represent You.

They only settle a claim against your wishes if you let them.

Forcing them to do their job demonstrates that Expedience is not necessarily Cheaper.

Forcing them (Insurers) to do their job exposes the level of their Competence / Incompetence in Claim handling.


Joe, I respect your defense of the legal profession, and I’m sure you believe that what you’re saying is true, but please don’t expect the average inspector to believe that only meritorious attorneys remain in business, or that justice prevails in our industry. The sad truth is that ninety-five percent of all cases against inspectors are settled before they ever get to court, and only when the attorneys on both sides have made a decent amount of money. And not one inspector that I’m aware of has ever been compensated for time and money lost. My first insurance company cancelled my policy following two frivolous and groundless lawsuits, despite a letter from my attorney proclaiming my innocence. And you can read about my latest frivolous lawsuit, which I documented with actual emails, which I posted on the NACH message board under the title “Perfectly Legal Extortion.” And this is just my experience, but I can provide case numbers of many other suits that have made a laughing stock of justice. I didn’t choose to be the voice of dissent, I started out by reporting on injustices that I was aware of, and then wanted to encourage Nick to provide a forum in which inspectors could help each other to avoid litigation. I don’t have any magical solution, but if this can be accomplished with better disclaimers, or with more proactive narratives, such as those that I posted regarding “sewer mains,” and “copper naphthenate,” so be it. Like you, I spent a number of years in the ivory towers of academia, but I’ve been down in the trenches for awhile, and know what it’s like to come under fire. And, ever since 911, I’ve been longing to see justice against terrorism, foreign or domestic. If you’re really interested in learning something more about justice, I recommend that you read a book by one of my heroes: The Death of Common Sense, by New York attorney Philip K Howard. It will leave you giggling in disbelief, or shaking you head in despair. Meanwhile, praise the Lord, and pass the ammunition. PS Let’s have a beer at the next convention and discuss the trial of O.J. Simpson, and the merits of British common law.

I think you will find that if the insurer could have settled for a lesser amount and you refused and it goes to as to court as it likely would because you would not agree to settlement/awards, you the inspector will be paying the difference.

Your insurance premium is only as low as your claim frequency.