Bring Me Sunshine … but London Rights of Light Injunction Is Refused

The Facts

Bankside Yards in Southwark is a major regeneration scheme close to the Thames. The case concerned an office building, the first of the new blocks on the site, completed in 2022, and whether it had infringed the rights of light of two nearby flats. The flat owners sought an injunction, which may have meant the office building had to be demolished or altered. The developer argued this would be disproportionate and that relatively modest compensation would be the appropriate remedy.

The office building was the only new building in the scheme that did not benefit from Southwark Council's decision to use its powers under section 203 of the Housing and Planning Act 2016 to override rights of light held by neighbouring owners. That decision prevented neighbours from seeking injunctions in relation to subsequent buildings and meant they would only receive compensation based on the diminution in value of their flats caused by the loss of light in relation to those later buildings, which is considerably less than the usual level of damages. Section 203 did not protect the office building because the building had been completed prior to the Council exercising the section 203 power.

The Judgment

The court accepted that the claimants' rights of light were infringed, but refused to award the injunction sought, instead awarding the claimants £850,000 in damages between them. The claimants had been seeking over £6 million if the court found against them on the injunction issue.

Key Points

The injunction issue. The court held it had a broad discretion whether to grant an injunction or award damages instead, taking account of all relevant factors. It is not only in exceptional cases that an injunction should be refused. In refusing the injunction, and the potential demolition it entailed, the court took account of the following (among other factors):

• The environmental damage resulting from demolition;
• Even if the building was demolished, it was likely that a new planning permission would be granted for a similar development which this time would have the section 203 protection. Therefore demolition would be an unjustified waste of valuable resources;
• The quality of the office accommodation, with its strong sustainability credentials;
• Although the developer had taken a risk in commencing development before settling with the claimants, the judge found that "risk-taking is a necessary part of commercial life and should not be regarded as … recklessness". The judge accepted that "this is what developers in cities have to do". The developer had not behaved badly and had sought to negotiate genuinely with the claimants prior to beginning the works;
• The strong public interest in retaining the building given the public benefits of the Bankside Yards scheme;
• All other neighbours had settled with the developer, which suggested that damages were an adequate remedy;
• The impact on tenant occupiers of the office building, who had not been joined in to the proceedings.

This approach will please developers of urban schemes. Also, while the section 203 power did not apply to this specific building, the prospect of that power applying to a rebuild worked in the developer's favour in the balancing exercise of whether an injunction should be granted.

The amount of damages. In previous cases, neighbours have tended to be awarded a roughly one-third share of the profit made from infringing the light. However, the judge ruled that this was a complex and risky redevelopment scheme, and the developer would need a greater profit share, with all affected neighbours only being given a 12.5% profit share among them. Their damages were reduced further because it would have been disproportionate to award more than the value of their flats. The damages awarded were between 30-50% of the value of their flats.

How should light be measured for the purpose of assessing whether an interference has occurred? The judge endorsed the use of the long-standing Waldram method (which takes exposure to at least 0.2% of the sky in half of the internal area of the room at desk height as a proxy for sufficient light in the room as a whole). While other methods may be relevant, it was common ground that the Waldram method is the industry standard and is used by everyone. The developer lost on this point: It had been arguing for more modern methods to apply, as it felt these would be more conducive to its case.

 Looking Ahead

 The decision is generally "developer friendly", but every case turns on its own facts. If the developer's behaviour had been "bad", or if the scheme had fewer public benefits, query whether the outcome would have been the same. It may also have been a factor that the claimants were not using their flats as their main residence. It remains to be seen whether the approach to damages will be followed in other cases. Ultimately, the claimants were still awarded 30-50% of their flats' value, which may be attractive to potential claimants, so rights of light will continue to be an important consideration for developers.