An exception to the rules

An exception to the rules

With over 20 year's use of an unregistered access way, a property would usually have obtained prescriptive rights, giving the owner a legal right to use it. But the following case demonstrates a situation when this wasn't possible and how insurance played a vital role.

Change of use

We were approached to provide an indemnity policy to cover a developer who intended to change the use of a single residential property to 16 leasehold flats. For over 20 years, the property had enjoyed vehicular access via a strip of unregistered land.

Despite the apparent prescriptive rights that may have been obtained over this period, indemnity cover was required for the proposed change in use of the property and to reflect the increased use of the access way.

The developers provided us with a copy of their planning report which showed that 57 neighbours had been consulted and no objections were received, and no-one had come forward regarding ownership of the roadway. As a result, we issued an Access Indemnity policy with a £1.8m limit of indemnity and the development works went ahead.

Thrown off track

A couple of years after the works had been completed, our insured was contacted by a solicitor acting for Network Rail who advised that the access land belonged to them. Usually, our first course of action would be to assert that our insured had acquired the benefit of a prescriptive easement for the residential use of the property, which existed prior to and following the developments.

However, in this case, it turned out that this wasn't possible. Section 57 of the 1949 British Transport Commission Act (and a subsequent modification to the Act in 1993) states that "no right of way shall be acquired by prescription over… property of the Commission and any successors." In this instance, Network Rail was indeed a successor of the British Transport Commission and our claims team began working on an agreement regarding the purchase of legal rights of way.

Initially, the claims negotiations took a slightly unusual direction when it was suggested that Network Rail might accept one of the newly-developed flats in lieu of payment. Instead, our claims team agreed to pay £120,000 plus more than £13,000 in legal costs to obtain a formal deed granting rights of way for our insured.