The well-known case of Highcross v. Heaney has left developers with more uncertainty than ever in relation to rights of light.
The decision by Judge Langan QC to issue a mandatory injunction against the developer, Highcross, in September 2010 sent shockwaves through the development community. It was the first time that such action had been taken in favour of a commercial property owner and it stood to radically alter the course pursued by both developers and their neighbours in negotiations over rights to light.
In March 2011, the Heaney case was set to be heard in the Court of Appeal. Developers up and down the land waited with bated breath for the outcome, no doubt hoping, as Highcross did, that the earlier ruling would be overturned. In the end, the case wasn’t heard. Mr Heaney and the developer reached an out-of-court settlement. Given that the estimated cost of following the injunction and removing the offending part of the development in question was somewhere between £2 million and
£2.5 million, the compensation paid to Mr Heaney was doubtless considerable.
While this particular case has been resolved, the lingering unpredictability relating to rights of light remains unhelpful for developers.
It’s interesting to note, for example, that, according to a recent article in Bloomberg Land Securities had to renegotiate with neighbours over rights to light in respect of their ‘Walkie-Talkie’ development in the City as a direct result of the 2010 ruling. Similarly, CLS Holdings plc, the developers of the ‘Shard’ — soon to be Europe’s tallest tower — undertook around 300 consultations on the proposed tower’s effect on its neighbours, including the amount of light it might obscure, before they broke ground.
Rights to light are also causing problems for the proposed redevelopment of Liverpool FC’s Anfield stadium and threaten to prolong the project unnecessarily.
Unsurprisingly, developers are loth to take any chances with light these days. It’s just too big a risk. Had the Heaney case come to the Court of Appeal, at least there would have been judicial clarity.
As it stands, however, the consultation period for new developments remains heavily burdened by the rights to light issue. Neighbours will feel ever more able to negotiate hard (and sometimes unreasonably) in the knowledge that developers will be cowed by the threat of a potential injunction being slapped on their schemes – whether it be prohibitory or, worse still, mandatory.
Comment from First Title
"There are a few things developers can do.
"They can continue to engage their professional advisers early on to assess risk and open gentle negotiations with neighbours.
"They can instruct specialist insurers with in-depth knowledge of this complex area of property law to develop bespoke indemnity insurance solutions based on thorough due diligence and detailed light surveys by specialist surveyors.
"They can, in certain cases (such as the ‘Walkie-Talkie’), enlist the help of their local planning authority who can exercise their powers under S.237 of the Town and Country Planning Act 1990. These powers will clear the way for development and, presumably, limit the amount of compensation paid to rapacious site neighbours.
"Developers can also sit tight and hope that, in the not too distant future, things might change. Indeed, the Law Commission is currently reviewing the arcane rights to light legislation.
"But we’ll have to wait until next year before we learn the outcome of these deliberations.
In the meantime, it’s a case of continued, careful risk assessment and effective risk management."