Everybody knows right to light claims are really only all about the money, right? And in many cases that can be a significant amount of money. Often running to millions of pounds for major developments when injunction impact on permissible development, compensatory damages and the legal costs of litigation of going to trial are all taken into account.
The stakes are high for all parties. So, without prejudice settlement offers are very important and understanding how the Court interprets them when making orders on costs is critical to getting the right tactics and litigation strategy so as to achieve the best possible commercial outcome for developers.
Which makes Mr Justice Fancourt’s recent judgment on costs in the heavily contested case of Kevin Cooper, Stephen Powell, Jennifer Powell v Ludgate House Limited [2026] EWHC 484, which followed his trial judgment on 8 July 2025, particularly worth study.
Judgment at trial
At trial the Judge found against the developer, Ludgate House Limited, that the Abor tower at Bankside Yards infringed the neighbouring residential flat owners’ rights to light. Whilst refusing to exercise the Court’s discretion to grant an injunction requiring the building to be “cut back” the Judge awarded damages, on the basis of a hypothetical negotiation between the parties, which he assessed at £350,000 for Mr Cooper and £500,000 for Mr and Mrs Powell. Significantly less than the £3 million plus each had claimed.
Judgment on costs
In civil litigation, the starting point is an unsuccessful party pays the successful party’s costs. But the Court has a wide discretion and will make a different order where “success” is divided. It is also vital to realise that if a party fails to beat a settlement offer it can be ordered to pay the other parties’ costs even if it has otherwise been completely successful with its claim.
Who was the winner?
It is not unusual for “success” to be divided in a right to light claim, and that was the position in this case. The flat owners had established an infringement but not secured an injunction which was their primary remedy – and for technical reasons always must be the primary remedy sought as you cannot be awarded damages in place of an injunction if you have not claimed for one.
The Judge refused to accept the developer’s argument that it was the successful party because the flat owners failed to get an injunction. Whilst was an issue of importance – particularly to the developer in saving it the huge costs of cutting back their building – it was the only issue on which the flat owners had failed since they had proved infringement and been awarded substantial damages. In those circumstances, it was a case where the Court said the “obvious” order was to allow the flat owners to recover a proportion of their costs to reflect the extent of their success in practical terms.
Part 36 offers
Offers under Part 36 are made on a “without prejudice save as to costs” basis so only come into play once a judgment has been given. The trial Judge is not usually aware whether any have been made and will certainly not know their terms. However, they can have a massive impact on the outcome of a claim in commercial terms. This is because if a party fails to beat an offer made by their opponent at trial, the Court can impose various penalties when considering the issue of costs. These penalties can include liability for the opponents’ costs, interest at a penal rate and in some cases additional damages. They can displace the usual rule that the unsuccessful party pays.
It is almost always advisable for developers to make early settlement offers and unsurprisingly offers were made in this case of £500,000 to each of the flat owners conditional on the release of rights to light but also to other related claims.
Impact of the developer’s Part 36 offers
Not unreasonably given the amounts of damages awarded the developer argued that the flat owners should pay its costs from the point that its Part 36 offers were made onwards, even though the Court had decided the flat owners were partially successful,
In the Powells’ case, the Judge concluded that taking account of interest they had in fact beaten the developer’s offer, so the Judge did not have to give weight to the offer in making its decision on costs. The Judge also noted that the offer was conditional on the Powells releasing rights beyond the claim itself. Taking everything together, the Judge ordered that they could recover two thirds of their legal costs.
Mr Cooper’s case was more complicated. Even with interest his damages were around £385,000, so well short of the developer’s offer. Had the offer only dealt the rights in issue in the claim it is very likely that the Judge would have made an adverse costs order against him requiring him to pay the developer’s costs from the point the developer’s offer was made despite his level of success. However, the developer’s offer required Mr Cooper to release rights that might generate future compensation claims. As the value of those rights had not been determined in the case it was not possible to say whether the damages awarded to Mr Cooper were less advantageous than the developer’s offer. That was enough for the Judge to conclude that the Part 36 consequences should not apply.
Nevertheless, the Judge was still critical of Mr Cooper’s approach to settlement. The counter-offer he had made of £7million was unrealistic as it was beyond any reasonable valuation of his claim. The Judge took it has demonstrating Mr Cooper had pursued the claim to trial in hope of extracting a far larger payment. As a result, the Judge was only prepared to order that Mr Cooper should recover one-third of his costs.
What tactical lessons do we learn from the judgment on costs?
If a developer succeeds in resists the Court granting an injunction whilst it can still expect to pay the neighbour’s legal costs, the proportion to be paid is likely to be reduced. This is even where the neighbour has proved that an infringement has occurred.
The level of the reduction can be significant once any Part 36 settlement offers are considered and if the claimant’s approach to settlement is unrealistic and evidently designed to simply extract the largest amount of money as possible.
This gives a developer a strategic window to seek a negotiated settlement based on payment of financial compensation. Properly pitched Part 36 offers – both in terms of timing and amount – are central to exploiting that window and can act as a break on a claimant’s willingness to litigate to trial. It is important therefore for developers to take proper independent professional advice at an early stage.
Whilst it may be attractive to a developer from a purely commercial perspective to make any settlement a compressive resolution of all potential claims that a neighbour may have there is a trap in getting too greedy. Including claims that are not part of the litigation lets the Court ignore settlement offers that would others be effective to reduce or even extinguish what would otherwise be the developer’s liability to pay the neighbour’s costs.
The Court’s exercise of its discretion as to whether to grant an injunction will always be central to rights to light claims. A factor in that decision will be the Judge’s perception of whether a claimant genuinely desires an injunction or is only really interested in the money.
The Judge in this case was clearly concerned that Mr Cooper was too interested in the money. Judge Peter Knox QC took the opposite view of the Claimant in Beaumont Business Centres Limited v Florala Properties Limited [2020] EWHC 550 despite it being a commercial case not involving any residential property and there being significant evidence to the contrary which included the fact that the neighbour had a history of extracting damages payments from developers on other sides of its building.
It is important that the Judge’s perception of the claimant’s motive is accurate, since the effect of awarding an injunction to a claimant that is only really interested in money (particularly where the impacted development has already been completed) is to hand the neighbour a much-enhanced negotiating position …. so perhaps actually it really is only ever the Money, Stupid.
The flip side of these factors is that they can and will – particularly where proper independent professional advice is sought – will act as a break on claimant’s willingness to litigate to trial.
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