0370 270 6000

already registered?

Please sign in with your existing account details.

need to register?

Register to access exclusive content, sign up to receive our updates and personalise your experience on brownejacobson.com.

Privacy statement - Terms and conditions

assessing diminution in amenity value in Japanese knotweed cases

18 July 2018

Note: this article focuses on private nuisance disputes, typically, between neighbouring landowners. ** Different principles apply to negligence cases and to the valuation exercise that would be required, for instance, in a claim against a professional **

Last week's Court of Appeal decision in Williams and Waistell v Network Rail (3 July 2018) could lead, soon, to an influx of new instructions to surveyors. Landowners and their lawyers may need to enlist expert assistance on some tricky issues of valuation.

Diminution

The Court of Appeal ruled that the mere presence of knotweed on a claimant's land means that the intangible amenity value of that land is diminished.

The concept of amenity value

The court also made clear that - conceptually - the following right is not includedwithin a particular piece of land's amenity value:

" ... the claimant's right to realise or deploy the value of the property in his or her financial interests ..."

The court was referring here, for example, to the claimant's right to let out his property or to sell it in order to make a capital gain. (But again, according to the Court of Appeal, this does not form part of what should be regarded as the amenity value of the land in question).

Therefore, in private nuisance actions, claimants cannot recover compensation to reflect (only) the fact that the presence of the knotweed has devalued their property in a purely financial or economic sense.

The Court of Appeal explained that this is because "... the purpose of the tort of nuisance is not to protect the value of property as an investment or a financial asset ..."

Instead, the critical question for experts is likely to be this:

" ... to what extent (in value terms) does the presence of the knotweed diminish the ability to use and enjoy the amenity of the subject property? ..."

Market value v amenity value

In the Network Rail case, at County Court level (in July last year):

  • Mr Williams was awarded £10,500 for the residual diminution in the value of his property after the knotweed had been treated
  • Mr Waistell was awarded £10,000 on the same basis.

However, those awards seem to have been for residual diminution in market value. Almost all the discussion in the County Court judgment is centred on the two experts' approaches to the full market value of Mr Williams' and Mr Waistell's properties (and on whose comparables were the more reliable, etc.)

It is much less clear what attention (if any) the respective valuation experts, at the County Court hearing, gave to residual diminution in amenity value.

At first blush, the Court of Appeal's ruling appears to draw a clear distinction between:

  • a drop in market (or capital) value - [in isolation, damages for this appear to be irrecoverable]
  • a drop in amenity value.

But is this simply two sides of the same coin? Think about the task facing expert valuers in wrestling with an assessment of intangible amenity value. It is conceivable - likely even - that they will need to have regard to how prospective purchasers in the market would react to learning that the subject property had been through knotweed control or eradication treatment.

Taking account of the actual impact of the knotweed on the occupier(s) of the land

It seems clear from Williams and Waistell v Network Rail (3 July 2018) that there is a movement away from considerations of market value and towards impact on use and enjoyment of land instead.

It is always said that damages in nuisance are for injury to the property and not to the sensibilities of the occupier. However, the Court of Appeal's recognition in another nuisance case, Dobson and Ors v Thames Water Utilities Ltd and Anr [2009], is potentially helpful:

"... If the house in question was available to be let during the period of the nuisance, it may be that there would be direct market evidence of loss of rental value. Otherwise, it is perhaps inevitable that the assessment of damages for loss of amenity will involve a considerable degree of imprecision. But if [expert valuers] are to assist in placing a value on the relevant intangibles, whether by calculating the reduction in letting value of the property for the period of the nuisance or in some other way, we would expect them in practice to take into account, for the purposes of their assessment, the actual experience of the persons in occupation of the property during the relevant period. It is difficult if not impossible to see any other way of proceeding. As Lord Hoffman observed, the measure of damages for loss of amenity will be affected by the size and commodiousness of the property. If the nature of the property is that of a family home and the property is occupied in practice by a family of the size for which it is suited, the experience of the members of that family is likely to be the best evidence available of how amenity has been affected in practical terms, upon which the financial assessment of diminution of amenity value must depend ..."

"... If the house is unoccupied throughout the time of the (transitory) nuisance, has suffered no physical injury, loss of value or other pecuniary damage, and would not in any event have been rented out, we are unable to see how there can be any damages beyond perhaps the nominal. A homeowner may be posted abroad, or working elsewhere without knowing when he will return, but may wish to keep the house available for himself at any time. He may be living elsewhere and waiting for the market to rise before selling. The house may be empty awaiting renovation. In none of those situations would there be any actual loss of amenity. So in this way also, as a matter of practicalities, the assessment of common law damages for loss of amenity to the land is likely to be affected by the actual impact of the nuisance upon the occupier, or the lack of it ..."

If this is right, I anticipate that expert valuers will want to see 'impact statements', by which the claimant-landowner will explain what his or her personal (adverse) experience has been of the knotweed. How has the presence of the knotweed spoiled his or her use or enjoyment of the property?

focus on...

Legal updates

All Risks insurance: damage not accidental but gradual deterioration and defective design

Technology & Construction Court considers meaning of ‘accidental’ damage, ‘gradual deterioration’ and ‘faulty or defective design’ in an All Risks property policy.

View

Legal updates

Avoidance for non-disclosure requires evidence of inducement

The Court of Appeal (the CA) has upheld the decision of the Commercial Court in Axa Versicherung AG v Arab Insurance Group [2017] EWCA Civ 96.

View

Legal updates

Fraudulent devices after Versloot

Following the Supreme Court decision in Versloot in July 2016, insurers are not entitled to refuse a fraudulent devices claim where lies told by an insured were collateral to an otherwise valid claim.

View

Legal updates

The Insurance Act 2015, an overview

The Insurance Act 2015 (“the Act”) introduced the most significant reform of insurance contract law in for over 100 years.

View

The content on this page is provided for the purposes of general interest and information. It contains only brief summaries of aspects of the subject matter and does not provide comprehensive statements of the law. It does not constitute legal advice and does not provide a substitute for it.

mailing list sign up



Select which mailings you would like to receive from us.

Sign up