Insurers warned of rise in Japanese knotweed nuisance claims - DAC Beachcroft

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Insurers warned of rise in Japanese knotweed nuisance claims

Published 8 agosto 2018

Insurers are likely to see an increase in nuisance claims following a recent Court of Appeal decision. 

In Network Rail v Williams & Waistell [2018] EWCA Civ 1514, it was decided that the encroachment of Japanese Knotweed and its rhizomes onto a property was capable of giving rise to a claim in private nuisance despite the fact that no physical damage had (yet) been caused. 

The claimants own two adjoining semi-detached bungalows.  Network Rail own the land immediately behind, on which there is Japanese Knotweed which all parties accepted had been present for at least 50 years. The claimants issued claims in private nuisance against Network Rail on the basis that the Japanese Knotweed on its land had: (1) encroached upon their properties; and (2) interfered with the quiet enjoyment and amenity value of their properties by reducing their market value. 

At first instance in Cardiff County Court, the judge found that the claimants were entitled to succeed in a claim for private nuisance.  The Court held that Network Rail's failure to deal with the Japanese Knotweed in a reasonable manner rendered it in breach of their duty as a landowner, which had caused a continuing nuisance and a diminution in market value of the properties.

The Court of Appeal upheld the lower court's decision, but for different reasons.  It was held that the claimants could not claim in private nuisance merely because of the diminution in the properties' market value (which had been claimed to be due to buyer deterrence and lender caution on properties affected by Japanese Knotweed). 

Any such diminution was considered to be a type of pure economic loss which was not grounded in any interference with property rights.  The Court of Appeal said that the purpose of the tort of nuisance was not to protect the value of property as an investment or a financial asset, rather it was to protect the land's intangible amenity value which concerned use and enjoyment of the land (but not the ability to dispose of it at a proper value). 

It was said that damage should be regarded as an elastic concept and harm which fell short of actual injury to the fabric of the property was not precluded.  Nuisance was about the protection of property rights and, in particular, the use and enjoyment of land, and it was interference with this property right which led to the award of damages.

This decision has wide ranging implications for insurers of landowners, particularly those with large holdings such as Network Rail, local authorities, public bodies, development companies and pension fund landlords, who are likely to face increasing claims in nuisance where the enjoyment of neighbouring properties is affected by Japanese Knotweed (or tree roots, noise, dust or odour causing similar nuisance). 

The Court of Appeal clarified that a claimant will not be required to demonstrate physical damage by Japanese Knotweed (or any other nuisance), rather interference with the use and enjoyment of their land will suffice.  Not all policies will cover claims in nuisance where there is no physical damage.  Furthermore, solicitors, estate agents and surveyors need to be ever more vigilant as to the potential presence of this perceived pernicious plant, even on adjoining land, which will be of concern to professional indemnity insurers. 

Authors

Lyn Crawford

Lyn Crawford

Manchester

+44(0)161 934 3163

Key Contacts

Lyn Crawford

Lyn Crawford

Manchester

+44(0)161 934 3163

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