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Disputes between neighbours, whether they involve residential homeowners or commercial businesses, can easily become protracted and contentious. This can be especially true when issues arise over land intended for development. And when circumstances transpire to lead to a claim on one of our policies, resolving the matter requires the correct legal strategy and careful management of all factors involved. 

This case study highlights our team’s strengths at both, when a drainage ditch and an unhappy neighbour put a developer’s plans at risk.

A drain on resources

In autumn 2021, we were approached by solicitors acting on behalf of a developer. Their client was buying a parcel of land and intended to convert some existing agricultural and nursery buildings into two residential properties. Due to the proposed change of use, a new treatment plant needed to be installed to deal with wastewater. The developer intended to drain wastewater from the treatment plant, plus any surface water into a ditch along the western edge of the plot, as had been the case with the existing nursery buildings. Their solicitor noticed that the title didn’t include the legal rights to use the ditch for this purpose, and they were seeking a Services policy to provide cover against any future action being taken by a third-party claiming ownership of the ditch.

Our underwriting team established that planning permission had been granted for the proposed development without any objections from the neighbours. They were also able to confirm that no rights had previously been granted for the use of ditch, nor had there been any dispute raised over its use, so we were happy to provide cover for £1,795 with a policy limit of £1,800,000.

Just three months later, in January 2022, our claims team was contacted by the policyholder. They had received a letter from the owners of the neighbouring property, who claimed that the ditch was in fact on their land. As well as asserting ownership of the ditch, they also stated that they would not consent to it being used for drainage by any other property. 

The right approach

Our claims team quickly got to work. To decide the best course of action, the first step was to establish which property actually owned the ditch, and whether the neighbour’s claim could be contested. The previous owner of the insured property believed they owned the ditch and had included it in drawings for the transfer plan. However, further investigation of the title deeds for both the neighbouring property and the seller’s original, larger plot, produced conflicting information. As a result, our team instructed a surveyor to try to conclusively ascertain the boundary lines of the properties and where ownership of the ditch lay.

While this work was being undertaken, we began looking at what other options were available to support our policyholder and defend the claim. The previous owner’s statement that they had been using the ditch to drain excess surface water from the nursery buildings was important. It opened up the possibility that even if our policyholder didn’t own the ditch, prescriptive rights for its use could have been acquired. However, subsequent research revealed that the nursery buildings hadn’t been in use for several years, which put an end to this potential solution. And even if a prescriptive right could be claimed, it would be unlikely to extend to the proposed change of use to residential dwellings, especially as this would likely intensify the use of the ditch. To further complicate matters, the neighbours were very clear that they were unwilling to negotiate an easement, or allow any other properties to use the ditch for any purpose. So, unless our policyholder was categorically identified as the owner, there seemed to be no available avenue to continue the use of the ditch.

Light at the end of the tunnel

Some clarity was brought to the dispute when the surveyor’s findings were received. The report concluded that the boundary between the property covered by our policy and the neighbouring property, the owners of which had brought about the claim, was down the middle of the ditch. Armed with this information, our team appointed a specialist consultant to investigate alternative routes for the drainage, which quickly showed more promise. The original owner of the insured property had retained land adjacent to our policyholder’s plot, as well as another neighbouring property that the ditch also passed through. Crucially, they were happy to negotiate. An easement was subsequently obtained which would allow our policyholder to extend their drainage route, bypassing the contested section of the ditch altogether.     

Expertise in your corner

The total cost to successfully resolve the claim came to just under £15,000. This comprised legal and consultancy fees, as well as the cost of obtaining the easement to allow the drainage connection to be made into an area of the ditch that was not included in the original dispute. All of which makes the £1,795 cost of the policy a wise investment.

The policyholder was very happy with the way our team worked to ensure that the development was able to proceed with the minimum of disruption, quickly resolving the claim in a way that was satisfactory for all parties. By finding an alternative route, the team avoided getting entangled in long and complicated (and potentially very costly) legal arguments against a very stubborn third-party claimant, who was consistently unwilling to compromise and could well have prevented the development from going ahead. Their knowledge of how complex and disruptive the situation had the potential to become, meant that they were able to resolve matters before they escalated.