Legal Watch:Property Risks & CoverageMarch 2015Issue 003

In This Issue:

• Stop Press - court fee increase

• The Insurance Act 2015

• The Third Parties (Rights Against Insurers) Act 2010

• Avoidance of ATE policy for fraudulent misrepresentation

• Duty of neighbouring landowners

Contact UsIf you would like any further information on the cases or articles featured in this issue, please contact:

Graham BrownT: 0844 245 5447E: gsb@greenwoods-solicitors.com

Victoria JordanT: 0844 245 4000E: victoria.jordan@plexuslaw.co.uk

Anna NorrieT: 0844 245 5310E: anna.norrie@plexuslaw.co.uk

Robert DellT: 0844 245 4473E: robert.dell@plexuslaw.co.uk

Marise GellertT: 0207 469 6249E: msg@greenwoods-solicitors.com

IntroductionThis month we focus particularly on the impact of the Insurance Act 2015 receiving royal assent, with the knock-on effect that the Third Parties (Rights Against Insurers) Act 2010 is now finally coming into force later this year.

Graham Brown reviews the Insurance Act 2015 and Victoria Jordan provides a necessary reminder on the principal provisions of the Third Parties (Rights Against Insurers) Act 2010, bearing in mind how long it has been on the horizon.

Thanks go to Victoria and Graham for their articles below and to Anna Norrie and Robert Dell for their articles on IHC (A Firm) IHC Ltd v Amtrust Europe Ltd and Coope & Others v Ward & Another, dealing with the avoidance of an ATE policy for fraudulent misrepresentation and the measured duty of care owed by neighbouring landowners respectively.

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Stop Press - court fee increaseIt now appears that unless it is blocked by the House of Lords later this week, the court fees increase will come into force next Monday, 9 March 2015 and not in April, as was previously suggested. It is not clear why the date has been brought forward.

The 5% fee regime will apply to all claims over £10,000, up to and including claims valued at £200,000, over which the fee is then capped at £10,000. The new regime was approved at the delegated legislation committee stage in the House of Commons last week.

The Law Society, Bar Council, Chartered Institute of Legal Executives, the Commercial Bar Association, Action Against Medical Accidents and representatives of claimant and defendant lawyers have issued a pre-action protocol letter as the first step to obtaining a judicial review of the increase.

Whether, in the meantime, there will be a rush to issue proceedings before next Monday remains to be seen.

We will report any further developments as and when they happen.

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The Insurance Act 2015The much heralded and discussed changes to non-consumer insurance law are now reality with the Insurance Act 2015 (the Act) receiving royal assent on 12 February 2015. This means that as of 12 August 2016 the new regime will be in place, affecting insurance policies written after that date in England, Wales, Scotland and Northern Ireland.

The changes effected by the new legislation have been trailed for some time both by various reports and the draft clauses published last year. The proposed clause dealing with compensation for the late payment of claims never made it into the Insurance Bill, let alone the Act.

The Act is in seven parts. Part 1 is simply the definitions and Part 7 the general provisions. Parts 2-6 are, therefore, the “meat” of the Act. Part 6 deals with requirements necessary to enable The Third Parties (Rights Against Insurers) Act 2010 to be brought into force.

This article will consider Parts 2-5, those dealing with the changes to insurance law.

Fair presentation of the riskThis is the new regime for non-consumer insurance that deals with the duty of the insured to provide information to insurers to enable insurers to assess whether they wish to write the risk and if so on what terms. The most important difference between consumer and non-consumer insurance is that the duty of disclosure remains.

Section 3 of the Act sets out what constitutes a “fair presentation of the risk”:

1. Disclosure of all material circumstances the insured knows or ought to know, or providing such information as would put a prudent insurer on notice that he needs to make further enquiries. This section also sets out what needs not be disclosed by the insured “in the absence of enquiry”

2. The disclosure needs to be in manner that the prudent insurer would find reasonably clear and accessible

3. As regards representations, a material representation of fact has to be substantially correct and a material representation as to a matter of expectation or belief made in good faith

The Act also has specific provisions as to what is meant by “circumstance”, “material” and “substantially correct”. The function of the prudent underwriter is retained in as far as materiality is concerned. He also has the role of deciding if a representation is substantially correct.

As regards “fair presentation of the risk”, in this respect the Act updates the previous legislation, providing some additional clarity and refinement but does not, in our view, significantly alter the approach to be adopted towards non-disclosure and/or misrepresentation issues.

One of the issues which tested the courts at length under the current regime is what constitutes knowledge of a material circumstance to be disclosed on the part of the insured, and, importantly the insured’s agent. This is now subject to Sections 4 to 6 of the new Act.

Insofar as a corporate insured is concerned, it has to be knowledge on the part of the senior management (which is defined as “the individuals who play significant roles in the making of decisions about how the insured’s activities are to be managed or organised”) or those responsible for the insured’s insurance. Perhaps of greatest importance is the fact that if information is acquired by an insured’s agent (or an employee of that agent) by way of a business relationship with a person who is not connected with the contract of insurance, then that is not knowledge of the insured.

Section 5 of the Act also deals with what constitutes insurers’ knowledge. It is important to note that whilst the knowledge of those writing the risk is the relevant knowledge, something known within the insurers’ organisation (or by its agent) which ought reasonably to have been passed on by the person with knowledge, to the person making the decision, is known to that person. If insurers have systems to pass on claims information and these are not followed then they will still be fixed with knowledge.

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Whilst the sections of the Act on knowledge arguably do no more than reflect the position achieved by the authorities on this question, the clarification provided is welcome and will ease the consideration of any issue arising in this regard.

The most significant change to the duty of fair presentation and that most heralded in the run-up to the new regime (perhaps the single most important driving factor for it) is in relation to remedies. The proportionate remedies based on the nature of the breach of the duty which was applied to consumer insurance by way of the Consumer Insurance (Representations and Disclosure) Act 2012 has now been introduced into non-consumer insurance.

If any single change brings insurance law into the twenty-first century, this is it – but it comes with a price. As with the role of the prudent underwriter, inducement of the actual underwriter is preserved but a whole new area of contention is introduced. As with consumer insurance, if the insurer wishes to ensure its right to avoid then it will have to show that the breach of duty was either “deliberate” or “reckless”. Simply proving the non-disclosure or misrepresentation is no longer enough and an examination of how it arose is now required. It will be interesting to see the extent to which, over the next few years, this leads to a willingness on the insurer’s part in pleadings to allege deliberate breach of duty on the part of the insured (or its agent) in the pre-contractual process.

If any single change brings insurance law into the twenty-first century, this is it...The alternative, proportionate remedy involves an examination of what the insurer would have done, given the proper information. There is still the possibility of avoidance but again a new question has arisen, would the insurer have written the risk but only on different terms, those different terms not being limited to premium? If the latter then the

remedy is to treat those terms as having been incorporated but what would they have been? Thought will now have to be given to this in the future where it has not been necessary to date.

WarrantiesThe Act makes a number of important changes insofar as warranties are concerned. These include:

• The abolition of basis of contract clauses – these are usually found in proposal forms and purport to turn the responses in the form into warranties in the contract

• The abolition of any rule of law that breach of a warranty results in the discharge of the insurer’s liability under the contract

The position under the new regime is that the insurer has no liability under the insurance in respect of any loss which occurred, or was attributable to something happening after the breach of the warranty but before the breach had been remedied. It is still for insurers to prove the breach.

Importantly, during the passage of the Act through Parliament, the provisions relating to the terms not being relevant to the actual loss were reintroduced in essence giving a further escape route to the insured. As late as December 2014 this was not part of the Act. It means an insurer cannot rely on non-compliance to exclude limit or discharge its liability if the insured can show that the non-compliance with the term could not have increased the risk of the loss which actually occurred in the circumstance in which it occurred. It is interesting to note that it is the insured who needs to establish that non-compliance could not have increased the risk.

Again these charges are to be welcomed in the modern commercial environment.

Fraudulent claimsThe Act clarifies the law insofar as fraudulent claims are concerned. The insurer need not pay the claim; they are able to recover from the insured any sums paid in respect of the claim and the insurer may, by notice, treat the contract

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as having been terminated “with effect from the time of the fraudulent act.” The termination is not automatic therefore. It is a choice to be made by insurers and communicated to the insured.

If the insurer does choose to treat the contact as having been terminated, then it has no liability to the insured under the contract in respect of a “relevant event” occurring after the time of the fraudulent act and it does not need to return any of the premiums paid under the contract.

Treating the contract as having been terminated, however, will not affect the rights and obligations of the parties in respect of any “relevant event” occurring before the time of the fraudulent act. The Act makes it clear that the “relevant event” is the event which gives rise to insurer’s liability under the contract. This is dependent on the basis on which the insurance is written, that is to say the “relevant event” can be either when the claim occurred, when it was made or notified.

Good faith and contracting outInsofar as contracting out is concerned, the provisions have no impact on a contract to settle a claim. The Act distinguishes between consumer insurance contracts and non-consumer insurance. In essence, any provision in a consumer insurance contract which would place the insured in a worse position with respect either to warranties and other terms or fraudulent claims is of no effect.

In as far as non-consumer insurance is concerned, then the insurer cannot by contract somehow reintroduce basis of contract clauses.

Insofar as the balance of the provisions in the Act relating to the presentation of the claim, warranties and fraudulent claims are concerned, then it is open to the parties to agree terms which may change their relative positions from those set out in the Act. These terms can only take effect provided that the requirements as to “transparency” as set out in the Act have been complied with. These requirements include the need to show the insurers have taken sufficient steps to draw the insured’s attention to the term before the contract

is entered into (unless it can be shown the insured had actual knowledge of the term) and that the term must be clear and unambiguous as to its effect.

In addition, in determining whether the term has been brought to the attention of the insured and is clear and unambiguous, the circumstances of the transaction and the characteristics of the insured person are to be taken into account.

SummaryThere is no doubt that when the Act comes in to force in August 2016 insurance law will have changed dramatically and for the better. It is hoped the changes will cement London’s position in the insurance world now that we have a regime which will stand up to the scrutiny of the twenty-first century commercial world. Obviously insurers will need to view their own business requirements in advance of August 2016 both in as far as the Act impacts on the underwriting of the risk (e.g. what specific warranties are now required as basis clauses are gone; what exclusions may be required in respect of the new provisions?) and the claims process. In this regard, for example, early identification of the remedy insurers seek for breach of the fair presentation provisions will be essential in any communications with the insured. The proportionate remedies mean that sensible options to make offers to settle claims and, indeed, cost effective offers in this respect, may now be available in respect of insurance written after 12 August 2016.

...when the Act comes in to force in August 2016 insurance law will have changed dramatically and for the better.

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The Third Parties (Rights Against Insurers) Act 2010The Insurance Act 2015 received royal assent last month and, apart from the important changes referred to elsewhere in this edition, finally made provision for the amendments to the Third Parties (Rights Against Insurers) Act 2010 (the 2010 Act) which have delayed the implementation of this much needed legislation.

The 2010 Act, which will now shortly enter into force, replaces the 1930 Act of the same name and makes provision with regard to the rights of third parties to pursue claims against liability insurers in cases where, among other things, the insured is insolvent. The amendments to it brought in by the Insurance Act 2015 relate mainly to the omission of certain types of insolvency and defunct organisations from the original 2010 Act and provide a regulation making power to ensure that changes in the fast developing area of insolvency law do not inadvertently operate to deprive potential claimants from the intended benefits of the Act. We set out below a brief reminder of the principal provisions of the 2010 Act.

The intention of the changes introduced by the 2010 Act is to make the legislation easier to understand, and to make it quicker and less expensive for third party claimants to recover compensation from the insurers of an insolvent defendant, without first having to institute proceedings against that defendant. Liability insurers and insurers pursuing subrogated recovery actions will need to be aware of the changes introduced by the new Act but they will also need to have an understanding of the 1930 Act, since this will still apply to cases where both the insured’s insolvency and the liability to the third party occurred before the commencement date of the new legislation.

The 2010 Act addresses a number of deficiencies in the 1930 legislation. The insurance market and insolvency procedures have both undergone significant change in the past 85 years. As a result, the application of the principles

of the 1930 Act had in many cases become problematic. This in turn has led to cumbersome and time-consuming court proceedings, with clear disadvantages to legitimate third party claimants and liability insurers alike.

Under the 1930 Act, the rights of an insolvent insured to an indemnity from its insurers under a liability policy were transferred to a third party claimant but the third party was required to establish the claim in proceedings against the insolvent insured before obtaining any rights under the insurance against the insurer. The rights transferred were those of the insolvent insured, with the result that the third party’s claim against insurers under the 1930 Act was only as good as the insolvent insured’s claim to indemnity.

The 1930 Act was originally interpreted as providing a right to information about the insurance policy only when the liability of the insolvent insured to the third party had been established, with the result that a third party pursuing litigation against an insolvent insured could find that no effective insurance was in existence. This position was modified by the 2004 case of Re OT Computers (in administration)[2004] EWCA Civ 653 in which it was established that, as soon as an insured becomes insolvent, the third party has a right to certain limited information about the insurance policy. Nevertheless, issues remained with this and other provisions of the 1930 Act, and it was apparent that there was a need for change. So it is that the new Act seeks to bring the 1930 Act up-to-date, by improving the rights of third parties and reducing litigation, expense and delay.

The new Act maintains the statutory transfer to a third party of the right to the benefit of a liability policy in the event that an insured subject to an insolvency procedure incurs a liability to that third party. However, the third party will now be able to claim against the insurer without first having to establish the liability of the insured. This removes the need for multiple proceedings by allowing the third

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party to resolve all issues relating to its claim against the insurer within those proceedings. The liability of the insured to the third party will, however, still need to be established before the rights under the insurance policy can be enforced against insurers.

The 2010 Act also gives the third party new rights to obtain certain information relating to the insolvent insured’s insurance both prior to and following the issue of proceedings. If it can be established that there is a contract of insurance which covers, or might reasonably be expected to cover, the supposed liability, information can then be obtained in relation to, among other things, the identity of the insurer, the terms of the insurance, and whether or not there are (or have been) proceedings between the insurer and the insured in respect of the supposed liability.

Anybody receiving such a notice is obliged, within 28 days (beginning with the date of receipt of the notice), to provide as much of the information specified as he or she can and, if it cannot be provided, to state why, and provide details of any other person who might be able to supply the information. Failure to comply with a notice requesting information under Schedule 1 of the new Act permits the third party to apply to the court for an order compelling compliance.

The 2010 Act also introduces three exceptions to defences which were hitherto available to an insurer against an insured:

• First, where the third party has satisfied a requirement under the insurance policy to meet a particular condition imposed on the insured, the insurer will not be able to rely on the non-performance of the policy condition by the insured

• Second, the insurer cannot rely on breach of a policy condition requiring the insured to provide the insurer with information and assistance if the insured has been dissolved and has therefore been unable to fulfil the condition

• Finally, if there is a pay-first clause before any right to indemnity from the insurer can arise, the new Act provides that such clause does not affect the third

party’s rights. Under the new Act, however, pay-first clauses will continue to apply to third parties under marine insurance contracts, except in respect of claims for death or personal injury

An important costs and time saving provision of the new Act is that it removes the need for third parties to undertake restoration of a defunct body to the register of companies to initiate proceedings against it. It does this by allowing the third party to bring proceedings directly against insurers (as already mentioned) and by allowing the third party to request information directly from persons related to the defunct body.

The 2010 Act also updates the provisions of the 1930 Act to reflect the wide range of insolvency procedures to which individuals, companies and other bodies are now subject. The amendments brought in by the Insurance Act 2015 will ensure that this aspect of the 2010 Act is kept up-to-date and in line with insolvency law.

Further, a third party can now claim directly against insurers even if the insurance covers liabilities voluntarily assumed by the insured. The new Act also clarifies the position with regard to cases having a foreign element and provides that, so long as a transfer of rights is triggered in accordance with its provisions, the Act will apply regardless of whether the case has a foreign element.

SummaryGiven the stated intention of the new Act to more easily facilitate third party claims in insolvency situations, liability insurers can anticipate an increase in requests for information. Such requests will impose a significant administrative burden on insurers and there is a relatively short 28-day time limit for compliance.

The new regime ushers in a number of benefits for third party claimants, from whom we can expect to see an increase in the number of claims lodged. There is, however, likely to be an ultimate saving in costs if insurers have a defence under the policy, because it will now be possible to first bring proceedings against insurers to resolve policy issues.

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Avoidance of ATE policy for fraudulent misrepresentationIn IHC (A Firm) (1) and IHC Ltd (2) v Amtrust Europe Ltd [2015] EWHC 257 (QB) the court held that an ATE insurer was not estopped from relying on a right to avoid a policy for fraudulent misrepresentation. By making an interim payment and increasing the limit of indemnity it had not made a representation which carried with it apparent awareness of the right to avoid on which it would not insist. It therefore followed that the company involved could not have relied on the representation to mean that the insurer would not insist on its right to avoid because the insurer had not done anything to suggest that it had any rights.

BackgroundThe claimant brokers (IHC) brought a claim against the defendant ATE provider (Amtrust) seeking payment of unpaid ATE cover. The proceedings arose out of an earlier case as follows:

• Amtrust had provided ATE cover to a company (Consortium Hotels). Consortium Hotels brought proceedings against IHC alleging that IHC had received, but not disclosed, commission in respect of a health insurance scheme. IHC’s defence was that a director of IHC was well aware that IHC were paid commission

• Consortium Hotels obtained ATE cover in the sum of £75,000. IHC obtained summary judgment against Consortium Hotels on the breach of fiduciary duty claim and Consortium Hotels was ordered to pay £10,000 on account of costs. This sum was paid by Amtrust under the ATE policy. The ATE cover was subsequently increased to £190,000

• Consortium Hotels pursued the balance of the claim against IHC to trial. The balance of the claim was dismissed at trial. The court found that Consortium Hotels had pursued the claim notwithstanding the fact that a director of Consortium Hotels knew that IHC were

paid a commission. Consortium Hotels was ordered to pay costs of £361,400 and went into liquidation without paying. Given the court’s findings about the knowledge of the director of Consortium Hotels, Amtrust declined cover under the ATE policy

IHC sought to recover the unpaid costs from Amtrust under the Third Parties (Rights Against Insurers) Act 1930. IHC accepted that Amtrust was entitled to avoid the policy for misrepresentation and non-disclosure but argued that Amtrust was estopped from relying on that right because by paying £10,000 in respect of costs and by increasing the limit of indemnity, Amtrust had represented that it would not refuse to indemnify Consortium Hotels in respect of liability for IHC’s costs. Amtrust argued that at the time of making the payment on account of costs and subsequently increasing the limit of indemnity, it did not appreciate that it was entitled to avoid the policy.

Judgment• The case failed and the action was dismissed. The court

held that unless a representation carried with it some apparent awareness of rights, IHC could not establish a waiver by estoppel

• The fact that summary judgment was entered against Consortium Hotels did not necessarily mean that the director of Consortium Hotels had lied. The successful summary judgment application was only a step on the way to considering whether by making an interim payment in respect of costs and increasing the limit of indemnity, Amtrust clearly and unequivocally made a representation which carried with it some apparent awareness of the right on which it would not insist, namely the right to avoid the policy. The representations were made in ignorance of the untruthfulness of the director of Consortium Hotels and it was not implicit in

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either representation that Amtrust did not care whether Consortium Hotels was untruthful or not. It was plain that neither representation carried with it apparent awareness

• There was no evidence that Consortium Hotels relied on the representations. Consortium Hotels did not rely on the representations because it did not carry with it apparent awareness of the right on which Amtrust would not insist

CommentThis case makes it clear that in order to establish waiver by estoppel, it is necessary to show:

• A clear and unequivocal representation on the part of the representor not to exercise its rights under the policy and

• Reliance on the representation by the representee, making it inequitable for the representor to go back on the representation

Obviously a representor such as Amtrust that is unaware that it has a particular right, such as avoidance, is not likely to make a representation that carries with it apparent awareness that it has such a right. That being the case, it follows that a representee that is unaware that a representor has a particular right is unlikely to understand the representation to mean that the representor is not going to insist on that right. In those circumstances the representee is unlikely to be able to adduce evidence that it actually relied on the alleged misrepresentation.

The key is the nature and content of the communications between the parties. In this case the judge commented, “I have to say that the case for... IHC in this action seemed to me to be pure Alice in Wonderland”. IHC relied on the facts of the interim payment being made and the limit of indemnity being increased rather than on the communications between the parties at the time. The judge went on to say that so far as he was aware “…never in the field of equity has assistance been lent to a crook to the disadvantage of an innocent party defrauded by the crook.”

“I have to say that the case for...IHC in this action seemed to me to be pure Alice in Wonderland”

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Duty of neighbouring landownersIn the case of Coope & Ors v Ward & Anor [2015] EWCA Civ30 the Court of Appeal looked at the measured duty of care that landowners have to each other, and the consequences of that duty of care when a wall adjoining two properties (and offering support to one) collapses.

The facts and decision at first instanceThe appeal was brought by the Coopes (the defendants) against a court order in favour of the Wards (the claimants), which held that the Coopes and the Wards owed each other a measured duty of care in respect of the consequences attendant upon the collapse of a wall between the parties’ adjoining properties, and required the Coopes to pay a contribution to the cost of unspecified remedial repairs to a collapsed wall.

The wall in question had been built, at the latest, by 1953 and from that date it provided some supporting function for land about four feet deep. The judge at first instance found that by 1991 the level of the land had increased to nine feet. In January 2010, after heavy snowfall, the wall collapsed into the Coopes’ garden. It was found in the first instance trial that prior to the collapse there was no sign (that would have been visible to a lay person) that the wall was under distress. The wall did not collapse because of anything that the Coopes had done to interfere with the earth retaining capability of the wall or to interfere with any easement that might have existed. The judge at first instance also held that the Wards were not responsible for additional loading against the wall. The judge was satisfied that no duty of care arose on the part of the Wards or Coopes prior to the collapse and that once that wall had collapsed there was no danger of the Wards’ land falling onto the Coopes’ land if nothing was done. It was just and reasonable to impose an obligation on both parties that was fair, just and reasonable to prevent or minimise the known risk of future collapse of the defendant’s land onto the claimant’s land. An order was

made requiring the Coopes to contribute to an unspecified remedial scheme.

The appealThe Coopes appealed the order. The central issue of the appeal was whether:

1. The Coopes owed a measured duty of care to the Wards which could arise in certain circumstances as between adjoining landowners in respect of a hazard arising on their land without their fault

2. The extent of that duty, and

3. Whether it was reasonable and fair to require the Coopes to contribute to the cost of reconstruction

The Coopes’ argumentsThe Coopes primarily relied on the argument that the judge at first instance was wrong to impose any financial contribution to the cost of repairing the wall on them; it is possible to empathise with this position given that nothing they had done or did not do caused the collapse of the wall. The Coopes submitted that the wall collapsed because the occupiers of number 41 (presently owned by the Wards) had built up the land on the Orchard Lane side of the wall. The Coopes were victims of the collapse.

Furthermore, they argued that the order made by the judge at first instance was difficult to interpret and unsatisfactory because:

• It did not define what was meant by certain phrases within the order;

• It left open the engineering solution (another wall, a terrace, or other solution) and without a specified solution is was impossible to say what it might be reasonable to require from the Coopes;

• There was no justification for the Coopes having to pay a proportion of costs up to four feet when any right of

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support in respect of that four feet had been lost by subsequent building.

A separate settlement between the Wards and another neighbour was confidential and it was not clear how that would impact upon any remedial repairs.

ApportionmentThe Court of Appeal focused on the question of apportionment of the costs of carrying out repairs to the wall. The Court of Appeal was critical of the fact that the judge had to invite submissions of the apportionment of the costs of repairs and that there was no clear proposed solution to the problem of the collapse. The Court of Appeal noted that both parties’ experts had each proposed three solutions but despite this no definitive solution had been proposed. On this basis, the first instance judge held that it would not be fair to impose equal burdens on both parties and that the Coopes should not be obliged to contribute beyond the cost of providing a wall to retain four feet of land. Therefore the potential liability of the Coopes was limited to paying a rateable proportion of the retaining wall benefiting the Wards’ land.

However, the Court of Appeal identified difficulties with the wording used by the judge at first instance in the order made and not least the interpretation of the wording used in the order.

FindingsThe Court of Appeal held that that it was not reasonable or just to impose on the Coopes a liability to contribute to the cost of some as yet unspecified engineering solution. The Court of Appeal reached this decision because:

• The cause of the collapse was the overloading of 41 Orchard Road over the years with earth and it could not be reasonable to require the Coopes to pay for what was neither their fault nor within their control

• Whilst the Wards were not personally at fault, responsibility for the collapse lay on their side of the fence and arose from the additions of earth made by the occupiers of their land

• It was unreasonable to require a contribution to an engineering solution which was entirely unspecified. The Wards’ claim was for the whole cost of replacing the Armstead Wall and repairing the Orchard Wall and consequently they had provided no clarity as to what solution would or could be put into effect

• The Wards only claimed a contribution to an unidentified solution at the very end of the claim, which was not acceptable. This was even more so that rebuilding might take place entirely on the Wards’ land and it could be reasonable for the Coopes to contribute to the construction of a wall entirely on the Wards’ land and from which they would derive no benefit

• There were a number of difficulties with the judge at first instance’s approach of setting limitations on what was required of the Coopes, not least because the cap set might bear no relation to the work that is carried out

The Court of Appeal stressed that the findings did not mean that the Coopes had no obligations on account of a measured duty of care towards the Wards (for example they should allow the Wards access to their land in order to enable works to be undertaken, or to allow their land to be used for propping).

CommentThe decision by the Court of Appeal is a common sense one. There was a finding that the Coopes had done nothing to cause the collapse; but then again neither had the Wards. However, the Wards were the occupiers of the land that caused the collapse, as it had been built up over a number of years. The Court of Appeal was quite happy to accept that neither party had done anything to cause the collapse; that said if neither party had caused a nuisance or been negligent, how then could the Coopes be liable for any costs?

The original decision was made on the basis of the measured duty of care (which the Court of Appeal agreed existed); namely that there was a measured duty of care in respect of the consequences attendant upon the collapse and the risk of further collapse, but it is clear that the Court

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The information and opinions contained in this document are not intended to be a comprehensive study, nor to provide legal advice, and should not be relied on or treated as a substitute for specific advice concerning individual situations. This document speaks as of its date and does not reflect any changes in law or practice after that date. Plexus Law and Greenwoods Solicitors are trading names of Parabis Law LLP, a Limited Liability Partnership incorporated in England & Wales. Reg No: OC315763. Registered office: 12 Dingwall Road, Croydon, Surrey CR0 2NA. Parabis Law LLP is authorised and regulated by the SRA.

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of Appeal thought the first instance judge had extended the duty to far. The Coopes had done nothing wrong and could not, therefore, be responsible.

The Court of Appeal was quite happy to accept that neither party had done anything to cause the collapse...The case highlights the difficulties parties can face when two neighbours are in dispute and issues of negligence and nuisance arise from boundary wall issues. What is clear is that in such a situation, a measured duty of care can arise, but this might only extend to co-operation between neighbours and does not automatically mean the cost of repairs will be shared.