Davies v Bridgend County Borough Council & Network Rail Infrastructure (intervening)
As we approach the six-month anniversary of the judgment of the Supreme Court it is an opportune time to reflect upon the decision and its practical consequences.
A quick reminder of what was at stake
The claimant claimed that the knotweed on his property was a result of an ongoing nuisance or negligence perpetrated by the neighbouring landowner, Bridgend Council.
His claim for the cost of the knotweed treatment was dropped prior to trial as it was accepted that the need for treatment arose as a result of the initial infestation of his land, not any subsequent negligence of the council.
The claim for the alleged residual diminution in the value of his property did proceed. The basis of this claim can be summarised as damages for the "stigma" of the land having JKW. The claimant argued, and it was accepted by the Court of Appeal, that the fact the council remained in breach of duty for a period meant that the losses associated with this historic escape were still recoverable. At the heart of this decision was a reliance on the case of Delaware v. City of Westminster ([2001] UKHL 55), which was interpreted by the Court of the Appeal to support this position.
The Court of Appeal decision concluded that for a claimant to successfully recover the diminution in value of their property related to "stigma" they only had to prove that there was an actionable breach of duty by the defendant and not that this breach was the original cause of the "stigma".
Network Rail Infrastructure, recognising, on our advice, the potential consequences of this remaining good law sought permission to intervene and make representations to the Supreme Court specifically on the Delaware point but also "but for" causation generally.
The Supreme Court heard representations from counsel on behalf of all parties and in May their judgement was published.
The Supreme Court concluded that the Court of Appeal had misinterpreted the ratio of Delaware; reiterating that the case concerned the cost of abating an ongoing nuisance as opposed to recovering damages incurred as a result of any continuing nuisance. The principal of Performance Cars v Abraham [1962] QB 33 applied and remained good law reiterating the general tortious principles of "but for" causation, where a breach of duty did not increase the burden on the claimant no loss was sustained. We would also point to the Supreme Court's decision in Jalla v Shell concerning recovering damages for continuing nuisance.
In Performance Cars, a claimant who owned a car that needed re-spraying did not suffer any further loss simply because a subsequent breach of duty required the car to need a re-spray. The need for a re-spray had not changed.
A claimant can only recover the losses caused by that breach of duty where there was a pre-existing JKW infestation a subsequent breach of duty that allowed JKW to infest the claimant's land did not cause any loss as the "Stigma" was already present as a result of the first infestation.
The impact of the decision 6 months on
In practice, this has meant that in a significant proportion of the litigated claims the claimants no longer have an arguable case of "Stigma" and the courts are striking out claims or the claims are being discontinued prior to trial.
This is resulting in significant savings in terms of damages and costs as well as recovering a proportion of the incurred defence costs on a discontinuance.
In terms of pre-litigated matters, we predict that claims are going to become less economical with higher risk and lower returns. Claimant firms have been impacted by the introduction of Fixed Recoverable Cost and some experts are leaving the market. This significant clarification from the Supreme Court as to when any causative loss has been sustained means that a lot of claims simply do not have a legal claim to bring.
This has culminated in a significant drop off of claims being presented and existing matters are being dropped.
This decision protects landowners from historic breaches of duty that have occurred as a result of a historic failure to identify and reasonably treat knotweed on their land.
The decision is a watershed moment for landowners who had feared that a historic failure to control knotweed on their land was going to result in a significant liability. As long as inspection and treatment regimens are now appropriate and, where appropriate, in compliance with the RICS and PCA best practice guides, any liability for the existence of knotweed and its spread will be limited and ever decreasing but only if appropriate inspection and treatment regimens are in place.
However, be mindful of claims where "young" infestations are not being managed, but these are increasingly brought by litigants in person seeking assistance with treatment and, if dealt with appropriately, with the right advice, costs can be controlled and mitigated against.
The existence of knotweed remains a potential liability but with an appropriate inspection and treatment regime coupled with a softening public and professional perception of the risk of damage means that it is no longer the standout danger it once was.
