As widely reported in the property press, the Law Commission has issued a Consultation Paper on rights to light. The Paper was published in February 2013 to great anticipation and has already caused controversy with its suggested proposals to overhaul the existing law. Dellah Gilbert explains the issues.
Rights to light are a creature of both common law and statute and date back over 400 years. Being a category of easement, they can be acquired by a formal deed as well as by continuous use for more than 20 years, uninterrupted by any period of a year or more. However, unlike most other easements, rights to light can be acquired passively, simply by reason of an aperture existing within a building’s outer wall, through which light is enjoyed. Once 19 years and one day of enjoyment of light has accrued, a prescriptive and actionable right to light is obtained over neighbouring property.
It is partly the passivity of their acquisition that has made rights to light so unpopular in the development world. To make matters worse, there has been a spate of recent cases in which the test to decide whether the beneficiary of a right to light should be awarded an injunction or damages, has been inconsistently applied. The most recent, HKRUK (CH) II Limited v Heaney in September 2010, resulted in an order for the demolition of a two storey extension on top of an office building, despite the fact that it had been completed before proceedings had been issued. Whilst not changing the law – an injunction remains the prime remedy unless special circumstances apply – the ruling was a salutary lesson to developers that they could not rely on a neighbouring land owner’s passivity nor on the courts to opt for damages as the appropriate remedy.
The recent cases have had a significant effect on the approach to new developments. The number and size of settlement payouts to neighbours has increased, making developments less profitable. In some cases, it has made them impossible unless they can bring such significant social or economic advantages to an area that a local planning authority is prepared to use its powers under section 237 of the Town and Country Planning Act 1990 to override the rights.
It is against that backdrop that the Law Commission decided to investigate whether the law can and, more importantly, should be changed. It seeks to address the imbalance that the law now creates whilst at the same time seeking to retain the amenity value of rights to light.
There are four main proposals.
Rights to light should in future no longer be acquired by long user
It is this proposal that has attracted the most comment. If enacted, at some point in the distant future, the majority of rights to light would cease to exist since most such rights are acquired in this way. However, the Law Commission supports the proposal on the basis that rights to light are currently acquired passively. Their view is that this passivity puts the onus on the owner of development land to appreciate the legal effect of rights to light and how to avoid them arising, which can be costly and time consuming. By contrast, the beneficiary of the right acquires something for nothing and can use it to extract a significant sum of money from a developer. In addition, historically, rights to light were used to protect against intrusive developments. However, that role has now been superseded by planning law although some might argue that relaxations in planning legislation make rights to light even more important.
A new statutory test should be introduced to clarify when the courts should order damages instead of an injunction
The current test applied by the courts dates back to the 1895 case of Shelfer v City of London Electric Lighting Company. The rule is that an injunction for interference with a property right should be granted unless the injury is small, capable of being estimated in money, can be adequately compensated in damages and it would not be oppressive to the defendant to grant an injunction. The Law Commission noted a rather formulaic application of the test when the most important element of it is oppression. Further, there is little guidance on how to assess the size and value of an injury and the Law Commission has concluded that the correct approach is to look at the amenity value of the right to light. This paves the way for taking into account the use of electric lighting in a building.
The Law Commission proposes that a court should take the following into account when deciding whether to grant damages instead of an injunction:
- the size of the injury based on loss of amenity;
- whether a money payment will be adequate compensation;
- the conduct of the beneficiary of the right to light;
- whether the beneficiary has unreasonably delayed bringing court proceedings; and
- the conduct of the developer.
The Law Commission emphasises that these are only considerations and not boxes to be ticked.
A new statutory notice procedure requiring beneficiaries to make clear to developers whether they will be applying to court for an injunction
One of the problems developers face is the inability to force their neighbour’s hand, other than by risky litigation. The Law Commission therefore proposes that the beneficiary be under an obligation to reveal their intentions. The procedure would start with the developer serving a Notice of Proposed Obstruction on the beneficiary. The beneficiary would then have four months from registration of the Notice (as a local land charge) to consider its position, take legal and surveying advice, and decide whether to serve a counter-notice objecting to the development. Following that, the parties would have a further four months to try and negotiate a settlement failing which the beneficiary must issue proceedings within that period for an injunction.
The introduction of a notice procedure is sensible. The aim is to make the negotiation process more transparent. Where the recommendation will truly bite is the requirement for the beneficiary to apply to court if negotiations are unsuccessful. Assuming the new statutory test is adopted, the beneficiary may be less likely to obtain an injunction and therefore less motivated to incur the cost of bringing a claim. However, the Law Commission’s intention is that a beneficiary’s entitlement to damages in lieu of an injunction is not detrimentally affected by a failure to respond in time.
Four months seems an insufficient period for a beneficiary to investigate whether it has a right to light to protect. By contrast, a developer may consider eight months is more than adequate. It will be a case of finding the right balance but a fair compromise might be to allocate six months apiece, which would bring the time limits in line with the one year period for a beneficiary to bring proceedings to defeat a light obstruction notice under the Rights of Light Act 1959.
The ability to extinguish or modify rights to light if they are obsolete or of no practical benefit
Currently, there is a statutory process that permits the modification or extinguishment of restrictive covenants in certain circumstances and the Law Commission has recommended that the process should apply retrospectively to all rights to light. This proposal is not a panacea for dealing with rights to light, since it will only have an impact in borderline cases, particularly if the Law Commission’s proposed new statutory test is implemented.
Overall, the review is to be welcomed as it is wideranging and tackles a difficult area. Full details of the proposals can be found at http://lawcommission.justice. gov.uk/ and the consultation period ends on 16 May 2013. Representations can be made direct to the Law Commission, which has a formal response form on its website.