Establishing a protocol for rights of light

In the summer of 2023, leading rights of light practice GIA published a wide-ranging opinion piece on the condition of the rights of light field. It accurately highlighted the challenges and uncertainties – both technical and legal – brought about by rights of light issues in the current market. These issues mainly affect developers and their professional advisers, but of course also impact their potentially injured neighbours. With a contracting number of insurance providers, rising premiums, an uptick in litigation and the emergence of surveying and law practices specifically soliciting claims from persons affected by new developments, it is unsurprising that rights of light risks are getting more expensive to mitigate and becoming an ever bigger line item in the development appraisal. Legislation or litigation? The problem is, what to do about it? We already know there is no appetite to legislate. The Law Commission reported on rights of light in 2014. Even taking account of the many unexpected events that have intervened since then, there is no suggestion of any political party tackling the problem. In any event, much has changed in the rights of light world since 2014 and some of the thinking may well be out of date. Some have argued that we need the courts to come to the rescue and bring clarity. Sadly, this is also probably not the answer. Among the many big unanswered questions in the rights of light sphere is the question of how light loss should be measured. There are now multiple methods of assessing light loss as an alternative or adjunct to the venerable “Waldram” analysis (now more than a century old). The impact of artificial light also comes into the equation more and more, particularly in the context of modern commercial buildings. As for residential space, it becomes ever more important to understand how such space is impacted by loss of light and where the line between damages and injunction should be drawn. New and complementary technical solutions are now available to assist the parties, but which are the right ones to use, or in what combination? What weight should be attached to different methodologies? Unpacking all this is not a matter of law but policy. The court looks to parliament to establish policy – particularly where the Law Commission has had a say. There have been remarkably few rights of light court cases in recent years and, truth be told, none of them have helped very much on the wider conceptual points; cases about interference with easements turn on their facts. So if neither parliament nor the courts can help, what is to be done? There is another part of the property industry that faced a similar issue years ago and did something about it. The rights of light industry should follow the trail blazed by the dilapidations industry by drafting and adopting a legal pre-action protocol. The Dilapidations Protocol was adopted into the Civil Procedure Rules in 2012, after 10 years of work by the industry to establish the use of the protocol as the gold standard approach in dilapidations claims. Ultimately, the industry bought into it, and now it governs how dilapidations cases should proceed. The rights of light industry should follow suit. What might a protocol look like? For a rights of light protocol to work, it would have to deal with substance as well as process. The process elements should not be overly controversial. They should provide: for claims to be brought to the attention of developers early (and for developers to contact potentially affected neighbours early); for the early exchange of information in standard formats; for potentially injured properties to be inspected; and for a prescribed process or period of without prejudice discussions before proceedings are issued. The matters of substance are more interesting and ultimately will depend on how far the industry is prepared to agree matters. Key areas of uncertainty in rights of light claims include: how light loss is best measured; how light loss should be valued; the impact of artificial lighting; the impact of particular sensitivities of use; and the question of whether an injunction should be a default remedy for all light interference. There are now several new methodologies available to measure light loss, making use of the significant strides in technology. Rather than considering questions of candles, newspapers and contour drawings, analyses attempting to show in more real terms the actual presence of light in the room are available, as are other methods of showing the cumulative impact of developments around an impacted property. One size will not fit all, but there are good arguments for examining whether parties should use more than one method at the start of discussions without worrying about making concessions. More, rather than less, information is generally an aid to resolving any dispute. Running alongside the question of measurement is that of valuing light loss. Waldram analysis at least has the benefit of being relatively easy to value – albeit there are often arguments over the appropriate multipliers to be used. But it is not the only method, and, as the court has shown in the most recent cases, damages for light loss can be assessed as a proportion of developer profits. It is this basis of valuation that causes a good deal of the uncertainty. When should profit be considered as against other methods? How reliable is the data used to calculate a profit share? In built-up areas, is it possible to reliably calculate exactly what “slice” of the profit should be allocated to a particular affected property? Is it right to value the profit of a full “cutback” where, in reality, it is only a slice of the proposed structure that is causing the light loss, not the massing above it? It would be a great achievement if an agreed protocol could establish the parameters of how light loss should be measured and valued in given circumstances. That all being said, it has to be recognised that not all properties are the same, either in design or useage. An office floor in a city centre is different from a medieval church, which is different from an artist’s studio, which is different from a residential living room, which is different from a warehouse stock room. A protocol should acknowledge these differences and attempt to set agreed parameters for how injuries to different types of property are to be approached and valued. Within this, the question of the relevance of artificial light to a particular use class should be resolved. With all these matters, the ultimate question of the deployment of the threat of injunction should also be addressed. There will, of course, be cases where the use and enjoyment of light really matters to the user and the potential for injunction should not be done away with entirely. But the threat of injunction simply as a tool to obtain a greater payment from a developer has done more to inflate the cost of rights of light mitigation than any other factor. Might a protocol seek to address this and establish a presumption (at negotiation stage) in favour of damages for light loss with guidelines and parameters as to when it is appropriate for an injunction to be pursued? Is achieving an agreed protocol possible? Agreement of a protocol will require the buy-in of the rights of light surveyors, lawyers and the rights of light insurance market, as well of course of their major clients. While the answers to these problems are not straightforward, the ongoing uncertainty is not going to change and is ultimately costing too much money. It is understood that the Royal Institution of Chartered Surveyors expects to publish a protocol around early information sharing in rights of light claims later this year. This is a really positive step. Perhaps there is indeed some growing momentum from the industry to help bring the clarity that is so urgently needed. Watch this space. Jeremy Stephen is a partner at Clyde & Co LLP Image © Gerard Lacz/Shutterstock