Damage Claims and The Party Wall Act

Where an adjoining owner suffers loss or damage as a result of works falling within the scope of the Party Wall etc. Act 1996 (the Act), and the statutory procedures have been followed, the Act provides a framework for how that damage should be made good or compensated for.

Let me first explain why I included that “…and the statutory procedures have been followed” condition above. The Act set out certain procedures which must be followed by the building owner including a requirement to formally notify an affected adjoining owner before exercising the right to undertake works. The Power & Kyson v Shah [2023] Court of Appeal decision clarified that if no notice is served the adjoining owner has no remedy under the Act and is left with common law remedies only; namely the right to bring claims in trespass, nuisance and negligence.

It’s still a grey area as to what happens when only some of the procedures have been followed e.g. where the works have been notified but have commenced before being authorised in an award, so I can only suggest that you obtain legal advice if you find yourself in that situation.

As I’m a surveyor rather than a solicitor, I’m going to focus on situations where the statutory procedures have been followed. Section 7(2) of the Act sets out a statutory indemnity:

The building owner shall compensate any adjoining owner and any adjoining occupier for any loss or damage which may result to any of them by reason of any work executed in pursuance of this Act.

Common law principles relevant to the assessment of damages apply i.e. both cost of repair and diminution in value are both legitimate methods for determining the quantum of losses suffered depending upon the facts of the case.

In addition to the indemnity above, certain Section 2(2) rights (which are rights to undertake work directly affecting a party structure such as to cut into it, raise it etc.) place an obligation on the building owner to make good damage e.g.:

Any right falling within subsection (2)(f), (g) or (h) is exercisable subject to making good all damage occasioned by the work to the adjoining premises or to their internal furnishings and decorations (Section 2(5)).

The Act goes on to confirm in Section 11(8) that where the building owner is required to make good damage:

… the adjoining owner has a right to require that the expenses of such making good be determined in accordance with section 10 and paid to him in lieu of the carrying out of work to make the damage good.

That’s important because the cost of making good damage may be different to the loss suffered by the adjoining owner. For example, if the adjoining owner’s property had been earmarked for demolition but suffered damage as a result of works notified under the Act there would not be a loss but, if there is an obligation for the building owner to make good, the adjoining owner could still request a payment in lieu of that making good.

Works falling within the scope of Section 1 (new walls at the boundary) and Section 6 (adjacent excavation) do not carry an obligation on the building owner to make good damage, only to compensate the adjoining owner.

This is the first in a short series of posts relating to damage claims under the Act which are indexed below:

1. Damage Claims and the Party Wall Act (this article).
2. Typical Causes of Damage from Party Wall Works.
3. Reducing the Risk of Damage from Party Wall Works.
4. Putting Together a Claim for Damage from Party Wall Works.
5. Resolving Damage Claims under the Party Wall Act.

If you live in the Cambridgeshire or north Essex area and require advice on party wall awards, or any other aspect of party wall procedures, you’re welcome to contact us on 01799 543532 or via email.