It was recently reported that the Kuwait sovereign wealth fund – the freehold owner of the 28-storey Willis Building, located in Lime Street, EC3 – has initiated High Court proceedings against plans for the nearby development of 50 Fenchurch Street, EC3. The case was issued by the UK real estate investment vehicle of the state of Kuwait against a special purpose vehicle controlled by AXA IM that holds the long leasehold at 50 Fenchurch Street.
Notably, the claim was issued despite planning permission already being secured for the development. Engineering and sustainability experts Arup, who were appointed to design the building, promise that the development of 50 Fenchurch Street represents “the next generation of sustainable office spaces” and will be “a worldwide example of sustainability”. However, the claim may threaten the ambitious project’s progress.
A delicate process
In an article published in The Financial Times, the claimant states that the development would “materially reduce the light enjoyed by the Willis Building” throughout some of the windows, “so as to amount to a substantial interference of the ordinary enjoyment of the Willis Building and constitute a nuisance”. It serves as a reminder to developers that obtaining planning permission does not override private proprietary rights and presents the opportunity to revisit how to best handle such claims.
The claimant is seeking an injunction to prevent the development infringing the building’s right to light. Alternatively, it is demanding unspecified financial compensation. In navigating such disputes, it is recommended that parties refer to the Rights of Light Protocol. While not a formal pre-action protocol under the Civil Procedure Rules, it was integrated into the RICS professional standard in June 2024.
The protocol facilitates early exchange of information and invites cooperation between the parties, promoting dispute resolution through dialogue and, where appropriate, alternative forms of resolution. Measures that are recommended as best practice, as outlined in Appendix C of the report, include: introductory letters from the developer to adjoining landowners; where a potential infringement has been identified, timely responses; and collaboration between surveyors on a without prejudice basis. These steps can significantly reduce the spiralling costs of litigation by fostering amicable outcomes before construction begins.
Statutory powers
Balancing the interests of landowners, developers and the wider public is a key consideration in rights to light claims. This issue is particularly relevant in London, where pressure to maintain the city’s status as a global hub necessitates the efficient use of limited space.
Section 203 of the Housing and Planning Act 2016 replaced section 237 of the Town and Country Planning Act 1990. It grants local authorities the power to override certain rights and easements, including rights to light, by appropriating the land for planning purposes.
Once the land has been appropriated, the local authority may transfer it back to the developer, who then benefits from immunity against injunctions under section 203. The affected landowner’s right to light is not extinguished, but its ability to issue a claim for an injunction is. Instead, the owner is entitled to statutory compensation under section 204 based on the diminution in value of their land caused by the loss of light. The provision attempts to strike a balance between enabling significant development projects and protecting private property rights through financial compensation.
An example of section 203 in action was a 2018 dispute involving Chelsea Football Club’s proposed £1bn redevelopment of its stadium. A neighbouring family obtained an injunction on the basis the project would infringe their right to light. Negotiations over damages and compensation prompted Hammersmith and Fulham Council to exercise its powers under Section 203. It acquired the land and leased it back to Chelsea FC, overriding the family’s right to an injunction.
Prior to the 2016 Act, similar powers were exercised under section 237 of the Town and Country Planning Act 1990 in relation to the development of 22 Bishopsgate and 20 Fenchurch Street (“the Walkie Talkie Building”), where right to light claims threatened to halt progress. Whether similar powers will be invoked in the current dispute involving 50 Fenchurch Street remains to be seen.
The importance of insurance
A vital point for developers to consider is the necessity of securing appropriate insurance once surveyors have identified a potential risk of a right to light claim.
The RICS recommends that need for rights to light insurance is incorporated into development risk management strategy. Specialist insurance providers offer policies that cover liability for damages/compensation to a third party, the costs of alterations in compliance with an enforcement action, and the diminution in the market value of the development because of a successful injunction. The identification of risks is crucial in keeping such significant projects on track.
Kate Andrews is vice-chair of the Property Litigation Association and a partner at Hamlins LLP