The Law Commission’s much-awaited report and draft bill on rights to light has been published. Anne Waltham considers its detail
Followers of all things rights to light will recall the Law Commission consultation paper, which was published in February 2013 and covered in EG on 23 February 2013, p98. After extensive consultation with stakeholders in the property industry, the Law Commission has published its final report (Law Com No 356) and draft legislation in the shape of the Rights to Light (Injunctions) Bill.
It is clear from the impact assessment study in the report that consultees have provided a significant amount of data on the financial cost of the current law. The report also annexes a survey conducted by the British Property Federation as to costs, delay and impact on development schemes and states that the work was aided “not only by detailed discussions with and submissions from developers, but also from those who benefit from rights to light”.
Perhaps inevitably however, the data is heavily skewed towards the views of developers and associated professionals in the industry, which is evident from the comment:
“the responses painted a picture of rights to light issues and disputes causing delays, under-utilised land and increased costs to developers including landholding costs, additional professional fees, interest payments, lost opportunity costs, and the costs incurred in redesigning projects”.
It is impossible for one article to do justice to the full scope of the Law Commission’s carefully researched project, so this analysis concentrates on summarising the principal recommendations and highlighting (where applicable) variances from the provisional proposals in the consultation paper. It also examines how far the report achieves its stated goal: “our recommendations are designed to clarify the legal relationships between the different parties, simplify the law and make negotiation more efficient”.
Principal recommendations
Prescription: to abolish or not?
The provisional proposal was that prescription should, for the future, be abolished for rights to light. However, only approximately one-third of consultees agreed with this proposal. The lack of support and risks highlighted by consultees persuaded the Law Commission to reverse its provisional proposal. Instead, there are two recommendations designed to make prescription operate more straightforwardly in the future:
● As recommended in the 2011 easements report –Making Land Work: Easements, Covenants and Profits à Prendre (Law Com No 327) – the Law Commission proposes to replace the existing methods of prescribing with a single statutory method applicable to all easements (including rights of light) based on 20 years’ continuous qualifying use. It will operate only as between freeholders. The Law Commission recommends that the Custom of London should continue and prevent the new form of prescription from applying within the City of London in the same way as currently applies to common law prescription (defunct in reality) or lost modern grant (but not under the Prescription Act 1832). This appears to mean that it will no longer be possible to acquire a prescriptive right within the City of London.
● To repeal the Rights of Light Act 1959 and the light obstruction notice (“LON”) as a method of blocking a prescriptive right from arising. The LON would be replaced by an application by a landowner (a freeholder, lessee with more than seven years to run, or mortgagee in possession) for registration of a certificate of light interruption on the local land charges register, which will operate with immediate effect to terminate the process of prescription. It will not have any effect on easements that are already in existence.
Injunction v damages
The most significant case in this area since the publication of the consultation paper is the Supreme Court decision in Coventry v Lawrence (t/a RDC Promotions) and others [2014] UKSC 13; [2014] EGLR 147. This was a noise nuisance case, but comments by the Supreme Court Justices as to when it is appropriate to grant an injunction are highly pertinent to rights to light claims.
An injunction should still be seen as the primary remedy, but the Supreme Court disproved of the “slavish” and “almost mechanical” application of the Shelfer criteria as happened most graphically in HXRUK II (CHC) Ltd v Heaney [2010] 3 EGLR 15.
Coventry itself gave little guidance on how the court’s discretion to award damages instead of an injunction should be exercised, but did consider that a new factor, public interest, should be part of the equation. Following Coventry, the Law Commission held a number of discussions with stakeholders and concluded (rightly in the writer’s view) that despite the shift evidenced by Coventry towards damages instead of an injunction, the law was uncertain and reform was still necessary.
Having revisited its provisional new statutory test, the Law Commission was satisfied that including proportionality as the overriding factor remains the correct approach. Its recommendation for a new statutory test is based closely on the provisional proposal, but tweaked to take into account Coventry and the views of consultees. The recommendation is that:
“a court must not grant an injunction to restrain the infringement of a right to light if doing so would be a disproportionate means of enforcing the dominant owner’s right to light, taking into account all of the circumstances including:
(1) the claimant’s interest in the dominant land;
(2) the loss of amenity attributable to the infringement (taking into account the extent to which artificial light is relied upon);
(3) whether damages would be adequate compensation;
(4) conduct of the claimant;
(5) whether the claimant delayed unreasonably in claiming an injunction;
(6) conduct of the defendants;
(7) impact of an injunction on the defendant; and
(8) the public interest.”
Perhaps the most striking elements of the proposed definition are first, the use of “must” rather than “may” in the first sentence (which arguably imposes a greater constraint on the court’s discretion than hitherto) and secondly, the inclusion of public interest.
A new procedure: the notice of proposed obstruction (the “NPO”)
A consistent message throughout the project was the need for developers to know whether an injunction is a serious possibility and to have a cut-off point after which it is no longer a threat. The Law Commission’s provisional proposal was to introduce the NPO: a “put up or shut up” procedure. The proposal was generally welcomed by consultees and the report recommends the introduction of the NPO whereby a developer can require a neighbour to seek an injunction in respect of the obstruction within a specified time (which must be not less than eight months after service of the NPO) or be debarred from doing so. The neighbour’s right to damages would remain intact and the effect of the NPO should be ignored in addressing the issue of damages. This is important as if a dominant owner fails to respond to an NPO, the court will not have jurisdiction to grant an injunction, which could otherwise be fatal to a claim for equitable damages.
The recommendations set out a procedural framework for regulations to be prescribed as to the form and content of the NPO and associated procedure. Further study will be needed to understand the finer detail of the procedure and how it will work in practice. The key importance of the reform is one of timing and giving some level of certainty to a developer, rather than affecting the chances of an injunction being granted should an application be made. The stated intention of the notice procedure is to “make negotiation more effective and keep costs down for all concerned”. Assuming that the procedure operates smoothly, this goal should hopefully be achieved.
Bringing rights to light to an end
The report makes two recommendations as to the ways in which rights to light can be brought to an end. They both comprise amendments to the easements report and to the draft Easements Bill:
● Five years’ non-user will be evidence of abandonment, as opposed to the 20 years which was the recommendation for easements generally.
● The consultation paper proposes that the Lands Chamber should have the power to modify or discharge existing, as well as future rights to light. Following consultation, this now applies to all easements.
Aspects of the law where no change is recommended
(i) Test for actionable infringement
By a slim majority, consultees agreed that the current test for when an obstruction of light should be actionable should not change. They considered, but rejected, a more objective standard or other technique for measuring light, or different tests for commercial and residential promises. The most hotly debated issue was whether artificial light should be taken into account in the decision as to whether a right has been infringed. As contemplated by the provisional proposals, the answer was no, but as explained above, it should be an express factor to be considered on the question of remedy.
(ii) Method of assessing equitable damages
Despite a sizeable majority of consultees being in favour of some sort of reform, the Law Commission stood by its provisional proposal not to recommend any change in the measure of damages that can be awarded instead of an injunction. They want to see how the remaining recommendations (the new statutory test and the NPO procedure) would bed down and also the effect of Coventry, in which a number of comments were made to cast doubt on the correct measure of damages. This will not be good news to developers who see the current law as too uncertain and having the potential to result in disproportionate settlements and put at its highest, to jeopardise the viability of a development.
(iii) The effect of alterations or rebuilding
Tricky issues can arise in working out whether a right to light survives the alteration or rebuilding of the dominant property. Various possible reforms were canvassed with consultees, including a new statutory test or registration, but were ultimately rejected.
(iv) Section 237: Town & Country Planning Act 1990
Section 237 is outside the scope of the Law Commission’s project and their consideration was limited to examining whether the power was sufficient to meet the problems caused to developments to rights to light. Given the divergence of views between local authorities on the use of section 237 and that it should be regarded as a tool of last resort, the answer, unsurprisingly, was that it was not.
What happens next?
The government has not yet responded to the easements report. The latest recommendations are divided between additions/amendments to the Easements Bill and a separate Rights of Light (Injunctions) Bill. This means that the recommendations cannot be implemented in full unless and until the government responds to, and gives effect to, the Law Commission’s recommendations in the easements report. With the general election looming in 2015 and the added complication that the latest recommendations are entwined with the easements report, the question must be asked whether the reforms will ever see the light of day.
The report is available at http://lawcommission.justice.gov.uk/publications/rights-to-light.htm
Anne Waltham is a partner at Wragge Lawrence Graham & Co LLP
