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ARTICLE · 03 JULY 2025

Privy Council Clarifies Secured Party's Duty When Realising Security

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The Privy Council has clarified that the duty of care to "obtain the best price reasonably obtainable" in the sale of secured collateral does not require a secured party to improve an asset before sale to obtain...

GuernseyFinance and Banking
Alex Wickens
Alex Wickens
Seyed Ahlesaadat
Seyed Ahlesaadat
Robert White
Robert White
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Gart O'Finlayson & another v Caterpillar Financial Services Corporation [2025] UKPC 24

The Privy Council has clarified that the duty of care to "obtain the best price reasonably obtainable" in the sale of secured collateral does not require a secured party to improve an asset before sale to obtain the best possible price. Unless there is a conflict of interest inherent in the sale, the onus is on the borrower/guarantor to establish that the secured party was in breach of its duty to obtain the best price reasonably obtainable.

This decision narrows the grounds on which a claimant can challenge a valuation in an enforcement process, providing reassurance to lenders handling distressed or high-value assets.

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