In this week's bulletin we look at the FCA test case update, the Building Safety Fund deadline extension and the case summary of Bernel Limited V Canal and River Trust [2021]. All this along with insight from our colleagues around the firm and some positive news.
FCA test case update - Covid and business interruption insurance
As we reported here, the recent Supreme Court ruling means that thousands of businesses will be entitled to claim under their insurance policies for coronavirus-related business interruption losses subject to the wording of their particular policies.
The Coronavirus pandemic triggered a huge rise in insurance claims for business interruption losses, many of which were rejected. In an attempt to seek clarity on the meaning and effect of provisions in certain business interruption insurance policies, the Financial Conduct Authority (FCA) put together a 'test case' based on 700 types of polices granted by 60 different insurers and held by 370,000 policyholders.
On a leap-frog appeal from the High Court, the Supreme Court handed down judgment on 15 January 2021 ruling that all the insurance policy clauses which the Court had considered, in principle, provided cover for business interruption losses caused by the pandemic. It was also held that valid claims should not be reduced on the basis that the loss would have been incurred in any event.
The judgment is long (112 pages) and complex. Insurers and policyholders will need to review the particular policy wording against the judgment in order to establish whether a claim is eligible.
Building Safety Fund deadline extended
On 11 March 2020, the Government announced in last year's Budget that it would provide £1 billion in 2020/21 to fund the removal and replacement of unsafe non-ACM cladding systems and thereafter published guidance on the registration process.
In case you missed it, late last year, the Government announced a six month extension to the deadline for building owners to complete their applications to the Fund for the total costs of remediating their building – with a new deadline for submission of 30 June 2021. To qualify for funding, the remedial works will need to commence on site by 30 September 2021.
Despite the extension, building owners will still need to act quickly because the Fund will continue be allocated on a first come, first served basis and there will likely be a limited supply of, and high demand for, specialist contractors to do the work.
The Government also announced at the same time a £30 million "Waking Watch Relief Fund" to pay for the installation of fire alarm systems in high-rise buildings with cladding, removing or reducing the need for costly interim safety measures such "waking watch". The Fund is planned to open this month.
Case summary: Riparian rights in Bernel Limited v Canal and River Trust [2021]
Riparian rights are rights enjoyed by owners of land abutting a natural watercourse. These may, in certain circumstances, include the right to drain from its land, via the watercourse, on to neighbouring land and can therefore be essential for developments.
In Bernel Limited v Canal and River Trust [2021], a developer argued that a historic pipe running through its land, which discharged onto neighbouring land, constituted a culverted natural stream or watercourse, and therefore it was entitled to discharge surface water and treated sewage effluent from its development.
The neighbour disputed this, maintaining the pipe was merely a sewer or drain bringing effluent from septic tanks further up the street, and water from field drains, rather than naturally flowing surface water.
The court held that for there to be a natural watercourse (and therefore riparian rights):
- it need not always run, and might be temporarily dry for part of the year;
- temporary flooding of a dry channel in the earth will not be a watercourse in which riparian rights can exist; and
- whether a particular course is a watercourse is a question of fact for the judge to decide.
Whilst in this case the court concluded there was historically no natural watercourse following the course of the pipe and therefore no riparian rights, had there been, the judge concluded that the proposed use would have been permitted.
The developer also claimed it had acquired prescriptive rights (based on in excess of 20 years use) to discharge but this also failed on the facts.
Insights
- Supreme Court hands down judgment in FCA test case
- Webinar: Construction update
- Webinar: Private residential development briefing – Intellectual Property and Data in the era of smart BTR buildings
Positive news
- Children at Sibsey Primary School in Lincolnshire have surprised teachers and staff with a secret display of artwork to thank them for their help during the pandemic. More than 40 messages were put together by children and parents and attached to the school fence overnight.
- 22 year old Amanda Gorman, following in the footsteps of people such as Maya Angelou and Robert Frost, read 'The Hill we Climb' at the Presidential Inauguration in D.C. She is the youngest poet ever to recite at a presidential inauguration.
- The extensive restoring and rewilding of over 20 miles of London's rivers is seeing great results. Sightings of kingfishers in London have increased by 450% since 2000, and sightings of grey wagtails and bats are also up.
