• When faced with a development infringing a neighbour’s rights of light, the Court may be unwilling to order an injunction / demolition where there will be economic and environmental “waste” and where there is a public interest case. Developers should continue to engage with adjoining owners and document their efforts to do so, but the Court is also clearly influenced by the wider public interest in development and seem to be prepared to tolerate a level of risk-taking (at least, to the extent of awarding damages for an infringement, instead of an injunction). 
• The damages were calculated on a “negotiated basis”, i.e. hypothetically, what the developer would have paid to negotiate a release of the rights of light. The damages awarded were significant. The Court said that “book value” damages (i.e. basing damages on the accounting book value of an assert) were irrelevant to the assessment of negotiating damages. This will be of interest to developers and insurers, who may previously have assumed that damages calculated as a multiple of book value might be the appropriate approach. 
• The Waldram method (used to measure light entering a building) is imperfect but remains market standard. In cases where the Waldram method produces marginal results, the Court may give consideration to alternative methods of assessment, such as the Radiance methodology (which is software that can calculate light – including reflected light – more accurately), but the Waldram method remains the simplest acceptable methodology for assessing loss of light in rights of light cases.
• Developers should consider seeking to obtain protection for their developments under s203 of the Housing and Planning Act 2016 – which can override rights of light, thereby eliminating the risk of injunctions and potentially decreasing the amount of compensation payable. 

In this case, the development comprised several high-rise buildings, to be constructed in phases over a period of 15 years. Planning permission for the overall scheme (including eight substantial buildings) was granted in 2014.

The claimants were leaseholders in a residential building adjacent to the development site. Their complaint related specifically to “Arbor”, the first building to be built in the development. Construction of Arbor, a 19-storey office block, began in 2019 and it was completed in December 2022. The claimants alleged that the construction of Arbor interfered with their rights of light. 

In 2022, as a result of these allegations, the developer asked the council to protect the whole of the development site from rights of lights claims pursuant to its powers under s203 of the Housing and Planning Act 2016, which it duly did. However, the s203 protection did not extend to Arbor, which was by that time virtually complete (and so could not benefit from such protection). 

In relation to Arbor, the claimants sought either an injunction requiring the demolition of parts of the building or, in the alternative, an award of damages. The developer contested both the existence of actionable interference with the claimants’ rights of light, and the appropriateness of the remedies sought by the claimants.

First, the Court had to determine the appropriate method for assessing whether the claimants had suffered an actionable loss of light.

The claimants relied on the Waldram method, a long-established approach to measuring light in rights of light cases, but which the developer argued was out-dated and less reliable than the modern, software-based Radiance methodology. 

The Waldram method is relatively simple, and assesses the adequacy of a room's lighting by measuring the visibility of the sky from various points within the room. If a new development reduces visibility below a certain threshold (which is deemed acceptable by the Waldram method), that development may be considered an actionable interference with rights of light.

The Court recognised that the Radiance methodology may be appropriate in cases where the Waldram results are disputed, or where there is a material discrepancy between the results of the Waldram method and the Radiance method – but that was not the case here, and the Court was content to apply the Waldram methodology. 

Based on the Waldrum methodology, the Court ultimately concluded that the construction of Arbor infringed the claimants’ rights of light.

The owner of a right of light does not have a right to all the light entering their building, but simply a right to sufficient light for ordinary purposes. The issue of infringement is determined by what light remains, not the amount of light that has been taken away.

In this case, the light currently enjoyed by the claimants (following the construction of Arbor) would be further impacted after the construction of the rest of the development. However, the other buildings would be protected by the s203 resolution, which overrides the claimants’ rights of light in relation to them (subject to payment of compensation). 

Accordingly, and in the alternative to an injunction, the claimants sought damages based on the difference between:

a. the “before” value of the amount of light entering their flats prior to the construction of Arbor; and 

b. the “after” value of the amount of light entering the flats post-construction of Arbor. 

The Court agreed with the claimants that that the light coming from the rest of the development, which the claimant was unable to protect by virtue of the s203 resolution, should be excluded from the assessment as to whether sufficient light would remain post-construction of Arbor. 

That was because the claimants had an unenforceable / unprotectable right of light over the rest of the development site – a right which technically existed, but which could not be protected in practice. So, the burden of the claimants’ rights of light fell narrowly on Arbor alone (rather than on the development as a whole), meaning that the claimants met the threshold for establishing that there was an actionable infringement of their rights of light. 

Although the facts of this case were unusually complicated, as a general principle this case clarifies that where there are phased developments, it will be necessary to pay close attention to the correct basis of comparison in order to assess residual light levels post-infringement - and which sources of light may be included or excluded from that analysis. The case establishes that “other” light enjoyed by a claimant should not be taken into account if that claimant cannot protect or enforce its right to that other light.

The Court declined to grant an injunction - which would have entailed demolishing the whole or half of Arbor - and instead awarded the claimants damages. 

In this case, this was an exercise of the Court’s broad discretion.

• The Court considered that an injunction would likely be futile, due to the likelihood that the developer would:

a. obtain planning permission to re-build Arbor (or an even larger building); and

b. would ensure that any new building was protected by a s203 resolution (so that the claimants could not prevent the replacement building). The Court noted that the financial impact on the developer of demolishing Arbor would have been nearly £250m.

• There were was a strong public interest in retaining Arbor, which greatly outweighed the adverse impact on the claimants, whose flats were not going to be rendered unfit for use, but simply less attractive and enjoyable. Demolition would have unjustifiably wasted public time, money and resources – and if Arbor were never re-built in any shape or form, that would have amounted to a waste of top-quality office accommodation with strong sustainability credentials, which would be contrary to local planning policies and the wider public interest. 
• The Court also noted that commercial tenants already occupied two-thirds of Arbor, but had not been included as parties to the claim. Although the Court accepted the claimants were simply trying to keep costs down by not involving the commercial tenants, it also meant that it would not be possible to enforce any injunction immediately (as the commercial tenants would have to be given the opportunity to apply to set aside or vary the injunction – given the direct impact on them). 
• Finally, the Court took into account the fact that others in the same position as the claimants had settled with the developer for money, which tended to support the argument that monetary damages would be an adequate remedy for the claimants.

Overall, the Court appears to have adopted a relatively pragmatic and developer-friendly approach, noting in its judgment that “risk-taking is a necessary part of commercial life”, and accepting that it is standard practice for developers to take reasonable steps and adopt reasonable positions in order to improve their commercial negotiating position. On that basis, the Court rejected the argument that the developer had acted oppressively or recklessly in sending settlement offers to neighbours only shortly before construction began (so that those neighbours had little opportunity to take advice and react). 

It will, nevertheless, continue to be important for developers to document such engagement with neighbours – so that, if necessary, a Court is in a position to be able to conclude that a developer’s actions are reasonable, rather than oppressive or reckless. 

The Court awarded the claimants damages, as compensation for the loss of a valuable right (of light).

The Court decided to calculate those damages on the basis of a hypothetical negotiation between the developer and the claimants shortly before the construction of Arbor began (commonly called “negotiating damages”).

In this hypothetical situation, the sum agreed for the claimants giving up their rights would be calculated by allocating a “fair proportion” of the uplift in profits that the developer would receive as a result of being able to build Arbor, without being hampered by the claimants’ rights of light. 

The two claimants sought damages in the sum of £3m and £3.75m respectively (sums which were, interestingly, more than three times the value of each flat).The Court awarded damages of £350,000 and £500,000. 

In arriving at this significantly reduced figures, the Court noted the following. 

• The hypothetical negotiations should not be characterised as a “ransom exercise”. It should only reflect the fact that the developer would be motivated to pay a reasonable amount to the claimants in order to release extra value in the development. 
• Whilst during the hypothetical negotiations the parties would have been aware of the risk of the claimants applying for an injunction, equally the parties would have been aware of the developer’s ability to seek section 203 protection from the council. 
• At the time of the hypothetical negotiations, the developer had not (yet) agreed rights of light settlements with any of the other 38 affected neighbours (six of whom stood to be substantially affected). So in the hypothetical negotiation, the developer could not reasonably be expected to give up its entire “pot” of compensation money (estimated to be approximately £3.75m) to just two neighbours. The Court therefore decided that one third of the “pot” would have been allocated to the two claimants, i.e. £1.25m, to be shared between them.
• However, the Court finally considered whether it was reasonable, in the round, to expect these kinds of sums to have been negotiated and agreed. As a result, the Court discounted the sums further, on the basis that:

a. the starting figures were disproportionate to the value of the flats; and

b. the claimants would likely be paid further sums in due course, to compensate them for the further loss of light once the remainder of the development had been built.

Importantly, the Court declined to award damages calculated by reference to the diminution in value of the claimants’ flats (which the Court said would have been only £60,000 and £20,000 respectively). Soberingly for the developer, the Court said that such low figures would not have been an adequate remedy for the claimants, and so had it been appropriate for the court to assess damages on that basis the Court might have been inclined to grant an injunction. Therefore, the strategy of arguing for lower figures could have seriously backfired.

Whilst the detailed judgment will undoubtedly assist developers and investors understand the risks and issues associated with rights of light better, easements (particularly rights of light in urban areas) and restrictive covenants continue to challenge the viability of some developments. This judgment does not alter that fundamental position. 

If you are interested in the impact of private property rights such as restrictive covenants and easements on property development, and in potential reform that could better support development including housebuilding, you may find our article “Policy in practice: reforming private law fetters to housebuilding” of interest. Rights of light, which can be “passively” acquired by neighbours, are commonly encountered in urban development, and Cooper v Ludgate House Ltd very well demonstrates some of the risks faced by developers.