By Reema Mannah, Titlesolv
The proliferation of skyscrapers in London shows no sign of abating. There are currently proposals for 263 buildings that are over 20 storeys high in the Greater London area either in planning process or under construction. High demand, coupled with soaring land prices, means that for many developers vertical developments are the most commercially viable.
Whilst a protagonist of a more futuristic London will support an evolving skyline characterised by cutting edge and cleverly designed skyscrapers, at a localised level the concern is the impact of tall buildings on light intake and the value of surrounding properties. Architectural and technical advancements, such as the innovative "shadowless" design recently proposed by architects NBBJ, which features a pair of towers which reflect light off each other to minimise the shadows, may in future address local concerns but in the short term those with an interest in neighbouring properties will look to the centuries old and disjointed evolution of the legal principles of rights to light as a pre-emptive strike against development.
To date ambiguity in case law and legislation has been a great source of concern for developers both from the perspective of enforceability and available reliefs for an affected claimant. In an attempt to simplify and clarify the law on both issues in December 2014, The Law Commission published its recommendations on rights to light law reform, which it hopes will become law in due course. The call for reform was undoubtedly prompted by HKRUK II (CHC) Ltd v Heaney  where the court awarded a mandatory injunction against a developer, compelling the demolition of the top two floors of a newly constructed building following from a rights to light infringement.
The Law Commission's recommendations propose five key changes to the law:
- Introducing a statutory Notice of Proposed Obstruction (NPO) procedure which would allow landowners to require their neighbours to confirm within an eight month period of whether they intend to seek an injunction to protect their right to light, failing which they would lose the right to injunctive relief;
- Introducing a statutory test to clarify when courts may order damages in lieu of injunctive relief;
- Updating the premise on which landowners can prevent neighbours from acquiring rights to light by prescription;
- Amending the law relating to abandonment of rights to light;
- Granting power for the Lands Chamber of the Upper Tribunal to discharge or modify obsolete or unused rights to light.
From a title insurer's perspective the proposed changes will significantly impact upon the manner in which rights to lights risks are underwritten. The NPO procedure contemplates flushing out a party, which intends to seek injunctive relief so that the developer benefits from certainty of remedy that it faces. For insurers this would arguably mean that the availing of the NPO procedure and of an insurance policy will become mutually exclusive options, as the former may provoke claims on the policy by parties who may not have necessarily been on notice of their rights prior to service of the NPO.
On a positive note, the ambition to codify the position in Coventry v Lawrence  UKSC 13 to grant an ultimate discretion in the Courts to determine whether damages are an appropriate remedy in lieu of injunctions in a material departure from the Shelfer Test would be welcomed by insurers in their ultimate assessment of the quantum of indemnity pay-out and associated legal costs.
As the proposed reforms clarify some areas they introduce ambiguities in others. The new proposed Certificates of Light Interruptions to be registered on Local Land Charges Registers will stop the clock on prescription for future claimants but all historically acquired prescriptive rights are preserved, creating a dual regime for developers and dual considerations for insurers when underwriting rights based on prescription.
On balance, the proposed reforms should be greeted positively by both developers and insurers. The clarification of the law introduces certainty and clear paths to resolution of claims, which in turn streamlines what is often a convoluted underwriting process for insurers in rights to lights cases. More importantly, the proposed restrictions on the availability of injunctive relief strips out from insurance streams those cases with higher risk exposures to this remedy, which ultimately assists with risk profiling and fairer, more transparent premium calculations for these highly specialist cases. Change which places all parties on the same level should always be embraced.
Titlesolv is the trading name of London & European Title Insurance Services Ltd, authorised and regulated by the Financial Conduct Authority.