Rights of Light Valuation Methods

It is a curious fact that all rights of light surveyors are aware of the book value method of valuation but that many are unaware of its origins or of its correct interpretation. Beyond this, there is wide knowledge of the profit share-based assessment or the assessment of actual loss although, in negotiations, these usually only form a basis for discussion. The concept of injurious affection might actually relate to the whole area of actionable nuisance but in reality, it only becomes a consideration when assessing loss of value in accordance with the Compensation Act.

In my previous articles I have written about the methodologies, including how to deal with leasehold property and apportionment but I have not gone to the extent of examining the validity of the methodology. In fact, apart from the actual loss method, each of the others relies upon an invented system that is demonstrably flawed.

It is worth noting that the RICS guidance on the valuation of compensation for loss of light is limited to the Rights of Light Guidance Note 2nd edition issued in 2016 and that it does not feature at all in the valuation handbook referred to as ‘The Red Book’.

In the guidance note there is an explicit statement “Where it is deemed appropriate to pay compensation for an injury, various issues need to be considered. The valuation of compensation for loss of light is a very complex and potentially litigious matter that requires a high degree of expertise.”

It is arguable that the majority of practicing surveyors do not have the breadth of expertise implied by this statement, but they rarely seek specific advice from Chartered Valuation Surveyors because few of these have an awareness of issues involved.

The guidance goes on to state that “On occasion, valuations will require a multi-disciplinary approach calling on the assistance of other advisers, such as quantity surveyors and valuation surveyors. Therefore, the obligation only to undertake roles in which members hold sufficient skill and experience should not be underplayed, nor should the need to ensure that all parties are appropriately skilled to advise in this area.”

The guidance recognises that the compensation process principally concerns the valuation in the following three scenarios:

1 ???????????valuing the diminution in the dominant owner’s property interest

2 ???????????valuing the servient owner’s gain resulting from the infringement

3 ???????????valuing diminution according to statutory provision.

It states that, “in terms of the first two of these situations there is no single accepted methodology for preparing a right of light valuation. A detailed understanding of all appropriate valuation methods and surrounding technical and legal concerns is essential.

Although the practitioner may arrive at a valuation based on the above or other methods, the courts refuse to be bound by any particular method or selection of valuation methods. This and the complexities in other aspects of analysis and valuation can make advice in this area particularly onerous. The third valuation approach follows methods defined by statute for Compulsory Purchase”

It should be noted however that the guidance note is well overdue for amendment as, amongst other things, it still references section 237 of the Town and Country Planning Act 1990 which has been superseded by section 203 of the Housing and Planning Act 2016.

In this article I have chosen to look at the following distinct methodologies

1.?????Book Value

2.?????Profit Share Based

3.?????Actual Loss

4.?????Injurious affection under the Compensation Act

Valuation Methods

Book Value

According to Andrew Thompson in his paper entitled The Worth of Natural Light, the foundations for this method of valuation were laid out in a presentation to the “Chartered Surveyors Institution on Monday 10th May 1937 (Head, 1937). The introductory words to that paper effectively set out the basis for what has become the current method of valuation.

‘Modern development by high buildings in already densely built-up areas frequently causes a loss of light to the older buildings around them, and consequently the buildings sometimes suffer damage by loss of rent ...’ Therefore, since 1937 the basis of light compensation calculations has used the rationale of the Light Standard Rent (LSR) as the foundation stone from which to value the worth of a natural light injury”.

However, this paper did not link to the Waldram methodology for assessment of loss of daylight and it was said by John Anstey that his father Bryan Anstey sat down in 1971 with Keith McDonald and Eric Arnall, the leading practitioners of the time and ‘codified’ their view on the breaking down of areas and the relative value of light as part of the rental value.?Despite this I have found no published books or papers, from that time, that do so and it is not mentioned by Bryan Anstey in his book, The Right to Light, written with Michael Chavasse. It would appear therefore that up until 1981 the method of valuation known as ‘book value’ had not been formalised. This is not to say that it hadn’t been used but simply that John Anstey had not gotten round to writing about it.

In his booklet entitled “The Valuation of Rights of Light” published by the College of Estate Management in February 1981 he briefly described the basis of assessing light injury and then, on page 7 onwards, he described the valuation process and I make no apology for quoting from this extensively.

He stated that “the valuation process is very much derived from normal valuation practice.” What he failed to say was that the methodology documented is not recognised in any standard valuation textbooks such as the RICS Red Book. However, he went on to state that “even when one has established a general rental value for the property under consideration there are then certain refinements not usually covered in valuation for letting. Staircases for example which do not figure very large in most valuations can be very important in rights of light cases and the loss of light to a staircase can put the occupier at risk of bodily injury and though it will not come on the same rate as light to the living room or to the managing director’s office it must be assessed at a commensurate figure. Lavatories may command a certain level of compensation. The value of staircases or lavatories must relate to the value of the accommodation with which they are associated, and the only problem is how large a proportion they should be worth and that must vary with the circumstances and I cannot give you a definite figure but about half will not be far wrong although in some domestic cases the value can be virtually on a par with the general level.”

How many surveyors actually make such an adjustment in the present day?

Anstey then went on to asset that “There are two ways of actually valuing the injury one of them has been tried and discarded by the pundits the other is more or less generally accepted by them. The discarded method is to try to say that the room as previously was worth ￡x/sqft and it is now worth only ￡y/sqft. You then multiply the area of the whole room by x – y. What is wrong with this method is that it is extremely hard to agree upon ‘y’. Furthermore, it does not so accurately reflect the actual extent of the injury in relation to the room as a whole. The only case where, in my opinion, it is an accurate method is where an entire room can be said to have been reduced from one kind of use, say office to another, say storage, because the injury to light is so severe. I have known a case where an adjoining owner agreed to window being completely blocked up with just the effect described above and therefore this method became entirely appropriate. On the whole however it is not to be recommended.”

His preferred method, he says, “gradually came about through constant argument between certain regular practitioners, about four in number and I have myself enthusiastically adopted their system. Further refinement of this method led to the realisation that the various experts usually tended to agree on a certain percentage (light rental to gross rental value) in the case of similar rentals and eventually three of them drew up a graph which represented the sum of their various agreements, in graphical form. Such a graph can be used in almost any circumstances, especially commercial, but the level of which various percentages will apply or vary according to the level of rents prevailing at the time in particular location.”

The graph used at this point appeared as below:

If, for example, the rental at ￡A was ￡2 per square foot then the light rental value would be about ￡1.40 per square foot. If the rental were about ￡20 per square foot at ￡K, then then the light rental value would be about ￡5.00 per square foot, assuming the monetary spacing ￡A to ￡K is equal and based on Anstey’s figures at the time.

Anstey then went on to describe how to capitalise the value in simplistic terms and specifically where tenancies exist. What he did not explain, no doubt assuming that practitioners understood the process, was how to arrive at a yield value from which the Year’s Purchase (YP) could be derived and I will come to this in due course.

What he did do then was to describe what he termed ‘refinements’ on the valuation process as follows: “if the injury is particularly severe the rental value of the light should be increased, a typical example would be where the area remaining well-lit was less than 25% of the whole room …..in such a case one would, as long as it did not produce an anomalous result, increase the value by 50% for the area of loss below 25%............. similarly for areas of loss which would not have been actual injuries in themselves lying between the 50/50 line and 75% of the room the value should be halved and for that part of the loss which occurs in the first 25% of the room usually at the back wall a quarter of the standard rate”

To translate this into the later form. Front Zone valued at 1.5 times the First Zone, First Zone valued at parity, Second Zone valued at 50% of first zone and Third Zone or Makeweight valued at 25% of the First Zone. In this way all the losses would be converted to the Equivalent First Zone (EFZ) and it would be this EFZ that is used in the valuation process.

No explanation has been provided of how these percentages were decided nor the simple fact of using four zones rather than three or any other number. However, it may be surmised that the experts of the time were aware of how some commercial premises were commonly valued using three zones, although current literature suggests that more zones might be used. In general practice and certainly for rating valuations the zone nearest a shop window would be the starting point Zone A and then Zone B would be valued at 50% of Zone A, Zone C would be valued at 25% of Zone A. i.e., reducing by 50% each time. This would, of course produce a different result to that using Anstey’s method such that the Front Zone becomes Zone A, First Zone becomes Zone B and so on.

Turning now to the question of yield and it is an unfortunate fact that most rights of light practitioners now are not valuers, and they will simply assume a yield value based upon what they have heard is being used by others in vaguely similar circumstances. In fact, knowing how to calculate property yields is vital if one is to give evidence on the question of value.

There are two ways in which a yield should be calculated for investors, the first being the gross yield and the second the nett yield. The gross yield is simply the annual rental value divided by the purchase price. Thus, if the purchase price were ￡1,000,000 and the rental income ￡50,000 then the yield would be 5%. By contrast the Nett Yield, which is not used for rights of light purposes, gives a more realistic result because the expenses are included. Things such as mortgage interest, letting agent costs, service charge etc., will affect the result, thus if the property expenses were included in the above calculation at the rate of ￡35,000 per annum, then the yield becomes 1.5%.

This is all rather simplistic because many properties being assessed are freehold only or, where tenanted, actual figures are unavailable, and this is where a valuer steps in to find the nearest equivalent property upon which to base a valuation.

In very general terms, a high value property in a high value area will command a lower yield percentage based on overhead costs and the safety of the investment, whereas a low value property in a low value area would command a higher yield percentage with lower overheads but more risk for an investor.

Since the valuation of the loss of light is, in effect, a purchase of the loss in perpetuity, the rental value has to be converted to a capital value. This is where valuation practice dictates that the reciprocal of the yield multiplied by 100 will provide the Years Purchase of a Reversion to Perpetuity (YP), i.e., the amount by which the light rental value should be multiplied in order to repay the loss in capital terms.

Thus a 5% yield would give a YP of 20, a 10% yield would give a YP of 10 etc. The light rental value would be multiplied by the EFZ in square feet and then by the YP to give what is termed the ‘book value’.

By 1988, Anstey had refined his explanation of the valuation process in his book entitled ‘Rights of Light and How to Deal with Them’ and so it is worth studying the changes since his original publication and these I have taken from the third edition of ‘Rights of Light and How to Deal with Them’, from 1998 as this covers the most recent interpretations.

The first noticeable difference is to the assessment of the EFZ. Anstey had by this time decided that where the loss would be serious i.e., to the Front Zone, then any Makeweight loss should be moved up to Second Zone but where the loss would be to second zone only then the loss should be moved down to Makeweight.

The tables below show the comparative results based on the original methodology and the latest version.

New

Original

The difference between these two methods is substantial in financial terms. An increase of 149sqft EFZ could result in an increased book value of ￡15,000 or so if one assumes a light rental value of ￡5 per square foot and yield of 5%.

This leads us to the thorny issue of light rental value and whether ￡5 per square foot is the right figure. In fact, Anstey published three graphs that might be used in assessing the value of the light rental in different circumstances and these have been continued even in the later versions of the book. The first being an almost straight-line graph representing London Rents generally, the second a slightly concave slope representing facilities related rents in London and the third a graph for provincial rents. Each gave percentage values against ranges of rental values.

Typically, the London based light rental graph always produces a result of around ￡5.00 per square foot. The facilities-based graph also produces results that vary either side of ￡5.00 per square foot and the provincial rates range from about ￡5 per square foot downwards. Though it is doubtful that any surveyor now uses a figure of less than ￡5 anywhere there is room for discussion about whether light rental value can be assessed on the basis of simple graphs.

In my opinion, it is much more likely that the light rental value will be specific to the property and its use. For example, a studio relying upon specific natural lighting conditions will have been chosen by the occupants for those characteristics and thus the light rental value to them will be greater than say a central London office where the location is the prime reason for occupancy and lack of natural daylight would be very low on the list of requirements.

What is interesting is that there is only two cases of note that reports this method of valuation and they are HKRUK v Heaney, although it was discarded in the final consideration, and Carr-Saunders v Dick McNeill Associates where Anstey gave a dissertation on the methodology and which the judge regarded as a sound basis had the award been for special damages alone. It may have been used in evidence in other cases but not reported. In fact, there are significantly more cases that report the profit share methodology that was best illustrated in Re Wrotham Park as will be explained below.

Many surveyors automatically apply an uplift to the book value as part of every claim, following the decision in Carr-Saunders where the uplift was applied to deal with general damages. Whilst this may be part of any negotiations it is not appropriate to assume that any specific uplift can be applied or would be supported in court.

In Carr-Saunders the Judge stated that “I am entitled to take into account not only the loss of light but the loss of amenity generally, due to such factors as loss of sky visibility, the impression that the building at the rear is now closer than it was (though that is an optical illusion), the loss of sunlight and other such matters - in short, the general deteriorating quality of the environment. Also, I have to bear in mind the fact that in any negotiations between the plaintiff and the defendants the plaintiff would certainly not be satisfied with the ￡3,000, which Mr Anstey considers appropriate.”

In this case, the judge took the view that the figure produced by Anstey should be multiplied by approximately 2.67 times in order to arrive at a figure that satisfied both special damages and general damages but, most importantly, it was because the end number ‘felt right’, a description that weas used again when considering profit share.

Profit based

The profit-based assessment of compensation comes from the concept that the developer would not be able to construct part of their proposed development without causing light injury and so, for the consideration of a reasonable part of the profit on that part of the development that could not otherwise be built, the dominant owner would surrender the right to the extent agreed. In law this was always stated to be on the basis of reasonable negotiations between willing parties and not an opportunity for excessive demands. The published cases appear to settle on a figure of around 30-33% with the qualification that the figure ‘felt right’.

In order to arrive at a compensation figure by this method it is necessary to assess the extent to which the proposed development could not be constructed without causing injury and this is known as the ‘cutback analysis’. It is possible to undertake a simplistic cutback and assess the areas of floor that would be lost but two questions arise. Firstly, is it appropriate to use the movement of the 0.2% contour line, whose basis is questioned by many practitioners, rather than the absolute movement of the no sky line and the second is whether, in undertaking the cutback, the result should take account of useable floor space rather than say a volumetric reduction or a simple floor area reduction. For example, a small area with useable ceiling height might be left by a cutback but with no means, within reasonable design parameters, to access that space.

Notably, in the case of HKRUK v Heaney, the Architect was instructed to prepare an alternative scheme that would not cause a light injury and arrived a reduced ‘net area’ of around 4,599 square feet. The term ‘net area’ was not explained, and it is not known if this complied with the rules of measurement at that time.

The issue with using the 0.2% contour is that it relies upon the flawed research of Percy Waldram, and it is quite possible that a court might prefer evidence based upon a different methodology with a different evaluation of useful daylight and the adequacy thereof. This then would produce a different cutback result. Unfortunately, the use of the no sky contour would produce anomalous results as it takes no account of the fact that the courts accept that a reduction in daylight can occur provided that sufficient remains for ordinary use.

On the issue of useable floor space, it is relatively common practice to assert than any space with a remaining ceiling height of 1.5 metres, or more, would remain useable as part of a larger room of normal ceiling height but, in order to ascertain the potential loss to the project it would be necessary to assess what could still be built within the cutback envelope and to value the development in that state as against the value of the full development. This would truly represent the area of profit that needs to be assessed.

The problem with adopting this approach is that it would require the designers to remodel the development, as happened in HKRUK v Heaney, within the agreed envelope and then for the capital value of the alternative development to be assessed and agreed. Unless the designers had already done this exercise it would represent additional cost to the servient owner when, in law, it would be for the claimant’s responsibility to prove. For the claimant to perform this exercise they would have to be given the servient owners drawings and to engage another architect and another valuer in the hope that such costs might be recouped through a successful action or negotiations. Neither of these solutions is practical for the majority of cases where a negotiated settlement is the most likely outcome.

In these circumstances a common-sense approach is often adopted, and the lost floor area is calculated irrespective of issues such as accessibility to the remainder.

In any case, the valuation method employed is based upon what is known as a ‘residual valuation’.

Traditionally, a residual valuation has been used to assess the value of land or property when considering purchase. By assessing the value of the completed project and deducting all costs, including profit, it is possible to determine an appropriate price to pay for the existing land or property.

The formula would be expressed as VLP = GDV – C – F – P

Where:

VLP ??????is the value of land or property,

GDV ?????is the gross development value, i.e., what the final capital value of the completed development is projected to be when it is eventually sold to an interested party.

C ??????????is construction costs, including any costs related to the site preparation and construction of the property.

F ???????????represents fees and covers things such as payments to professionals who are involved in the process – solicitors, planning consultants, architects, engineers, property agents for example. Other fees such as planning consents, building regulation consents, 106 agreements etc. should also be included here.

P ??????????is the profit element which is usually decided by the developer.

However, for the purposes of assessing compensation in rights of light cases, the assessment equation is rephrased as P = GDV – VLP – C – F.

To undertake a valuation, on this basis, it is necessary to have knowledge of all the costs associated with the development from land purchase to design and construction and including such things as marketing costs, all of which can affect the level of profit. The question of taxes needs also to be considered. A new housing development might be zero rated for VAT whereas a refurbishment and extension will probably attract VAT, and this would form part of the construction costs. It is not appropriate, however, to deduct income tax from the profit. Once all these costs are known it is then necessary to value the completed development. Any reasonable developer will have made an estimate of this prior to setting out on the project and as part of their business plan but such estimates are subject to the vagaries of the property market and so, whilst the estimate may be a useful benchmark it is essential to get a current valuation.

The difference between the two figures, final value and total costs, represents the anticipated profit of the development unaltered.

It is usual then to divide this figure by the gross internal area of the development to establish a profit value per square metre of GIA. ?However, where the development is an extension of an existing property the calculations have to be constrained solely to the extended part i.e., the costs associated with creating the extension and the profit element on the extension alone and this can make for a much more complicated valuation.

By then taking the cutback GIA away from the original GIA, an area can be deduced which can be multiplied by the profit value per square metre to arrive a profit value for the useable floor area that would be lost.

In HKRUK v Heaney, the judge described how he assessed the level of damages that might have been awarded on this basis. He referred to the “one solid piece of evidence which I do have is the estimate of profit ……. from the whole development was ￡6,908,000. He then went on to state that “The claimant would have had this figure in mind at the time of the hypothetical negotiations and would also have had in mind that the profit would inevitably have been less if it had been forced to reduce the areas of the sixth and seventh floors.” A profit differential had been put forward of around ￡1,400,000 and a suggested apportionment of ￡500,000 to which the judge stated that, ”Even if the figure is accurate, an award of more than one-third of the profit differential appears to me to be extravagant.” Having taken into account various representations as to costs which the Law Commission summarised as follows:

Projected cost of development:??????????????????????????????????????????????????????????????????????????????????????￡28,530.000.00

Anticipated Profit:????????????????????????????????????????????????????????????????????????????????????????????????????????????????￡6,908,000.00

Reduction in price paid for property to allow for right to light claims:??????????????????????￡350,000.00

Contingency fund to deal with right to light claims: ???????????????????????????????????????????????????????￡200,000.00

Estimated cost to development if plans had been revised early to avoid infringement: ???????????????????????????????????????????????????????????????????????????????????????????￡1,010,000.00

Estimated cost to development if court ordered rebuilding work: ??????????????????????????￡1,785,000.00

The judge advised that, had an injunction not been awarded, then the figure of ￡225,000 would have been awarded as a fair share of the profit stating that, “The evidence in the case is not such as would enable any judge to produce a scientifically justifiable figure. This makes all the more important the last part of the process, which is to stand back and ask myself whether the sum which I have mentioned ‘feels right’ – or, put another way, whether it looks either extravagant or mean. To my mind, ￡225,000 survives this final test.”

What was not challenged was the methodology by which such a cutback had been assessed. If, for example, it could be shown that adequate daylight remained with a lesser cutback then it may have been the case that the judge would have viewed the case differently and not awarded an injunction. That is a matter of conjecture, but it reinforces the point that research is needed to determine whether the Waldram methodology should be replaced using modern techniques.

Actual Loss

There is a concept in law allows for the assessment of actual loss as a backstop. This comes from the form of damages known as special damages where an actual loss can be quantified, and this exceeds the amount that would otherwise be awarded using other valuation methods. It is feasible, for example, that a situation might occur where a dominant owner loses development value for his land as described in Griffith V. Richard Clay & Sons, Limited 1912, 291 2 Ch where the loss extended beyond the building for which a right to light existed.

No doubt other examples exist but perhaps, more importantly, it cannot be argued that no loss has or will occur due to enhancement of the property value as a result of the adjacent development. This was explained in Eagle v. The Charing Cross Railway Company. (1866-67) L.R. 2 C.P. 638 where the court, having considered the findings, held that the diminution of light did injuriously affect the plaintiff's interest in the premises and that this entitled him to compensation under the statute; and that, it was not correct to find that, by reason of accidental circumstances, the saleable value of the premises was not diminished.

Injurious Affection

Where property or a right to light is compulsorily purchased as occurs under section 203 of the Housing and Planning Act 2016 C.22 to appropriate the right to light, compensation is to be assessed in accordance with the Compensation Act.

The Compensation Act recognises a form of compensation known as “injurious affection”. There are two classes into which claims may fall, the first being for injurious affection to land formerly held with the land taken and the second due to the exercise of statutory powers on land not owned by the claimant. It is this latter that relates to cases involving rights to light and, whilst Section 68 of the Land Clauses Acts is more general, the considerations under section 203 are very similar.

It should be noted that no notice to treat has to be served although appropriation under section 203 has to follow the rules of that legislation in terms of notification, and the right to compensation does not crystalise until there has been actual interference with the right to light. When the interference has been suffered then the owner may submit a claim to the acquiring body stating the nature of their interest and the amount being claimed.

The right to compensation for injurious affection conferred by section 68 of the Lands Clauses Act is limited by the application of four rules approved by the courts in McCarthy v Metropolitan Board of Works (1874) and subsequent cases. To entitle the owner to compensation the claim must pass all four tests otherwise there will be no right to compensation.

Rule 1???the damage or loss must result from an act made lawful by the acquiring bodies statutory powers and for this it is imperative that the authority comply fully with all of the requirements in the Housing and Planning Act 2016.

Rule 2 the damage must arise from something which would have been actionable if the acquiring body had not been protected by statutory powers.

Rule 3 the damage must be an injury to land not a mere personal or trade injury.

Rule 4 the damage must be caused by the execution of the works and not by their subsequent user.

When considering Rule 3 the direct implication is that the compensation is solely for the loss in value of the property thus excluding the equitable loss referenced in Carr-Saunders and any consideration of profit share but crucially the ruling in Eagle v Charing Cross still applies in that it is not possible to argue that no loss in value has occurred when there has been a reduction in daylight that would be considered actionable.

The options for valuation that remain, at present, are the book value method or proof of actual loss.

Account of Profits

It is worth, in passing, mentioning the case of Forsyth-Grant v Allen EWCA Civ 505; [2008] as the appeal emphatically rejected the argument for the use of this method in assessing damages. The court said that there was no decided case where an account of profits had been awarded in lieu of damages for nuisance and there was no reason not to hold that it was only available in exceptional circumstances, Attorney General v Blake [2001] 1 A.C. 268 applied. Actionable nuisance did not involve a misappropriation of a claimant's rights and the judge was entitled to reject F's claim for an account of profits on the basis that it was not an available remedy for nuisance. Even if that was wrong, his finding that such an award required exceptional circumstances could not be wrong.

Conclusions

Whilst the book value approach stems from a rational assumption that the rental value of a property will be reduced by loss of light, the present approach relies firstly on the assumption that the Waldram methodology accurately produces comparative contours that reflect adequacy of daylight provision and that the difference between the contours can be categorised by arbitrarily weighting the interference according to the extent of injury derived from that methodology.

It is arguable that the use of a figure of ￡5 per square foot for light rental value is not justified in terms of actual valuation practice and specifically, since it does not feature in the RICS Red Book, is not a feature of usual valuation practice. In fact, it is suggested that that the use of the affected property might define the actual value of light rental since commercial offices would be less affected that say an artist’s studio, but the case law relating to special use is quite limited, dealing with issues such as whether or not there was a special use rather than the valuation principles.

The reason why the book value method came into being was a direct result of the decision in Colls v Home and Colonial Stores 1904 which established the concept of ‘sufficient for the ordinary notions of mankind’ but failed to define what is sufficient in physical and mathematical terms. This provided the opening for Waldram to develop a methodology for the assessment of adequacy and then for the valuation methodology to be created. Take away the measurement of adequacy and the valuation method fails.

Any profit-based assessment is reliant upon a cutback design for the development that is based upon Waldram’s methodology to achieve an envelope that does not cause a light injury based upon current case law. The issue is of course that the law is free to decide that, even where a cutback has been performed, the remaining amount of light is inadequate, thus the methodology of valuing the profit reduction from a cutback is equally flawed.

An assessment of actual loss could possibly be made by a valuer, through the assessment of rental value of the property before and after obstruction. This could take into account any special requirements of the occupants which might enhance the light rental value. Equally, a valuer might take the view that the light rental value is negligible or zero for that user. The question that this might raise is whether another subsequent user would take the same view and for this reason it is unlikely that a valuer would write off the light rental value completely.

Another advantage of the ‘actual loss’ approach is that it can take account of situations such as that in Griffith V. Richard Clay & Sons, Limited where part of the loss was to undeveloped land and could not thus be assessed by any other method.

None of the above would preclude a claimant from seeking general damages but this would be for a court to decide in terms of value and ‘what feels right’. However, in practice, each of the identified methodologies only represent a starting point in negotiations. Ultimately, if both parties are willing, then the settlement figure will be whatever is agreed.

For surveyors contemplating giving expert evidence in court there is little option but to present the assessment of value on the basis of current methodologies and by reference to the RICS Guidance Note or Practice Statement, but it is recommended that this be stated in the evidence with any reservations concerning the reliability clearly expressed.