My Lords, given the Minister’s earlier remarks, I am delighted to provide a vehicle for what I detect she thought might be some
excitement, and I see that I have a little more than an hour to do so. With a bit of luck, it will not take that long, but here goes.
Schedule 23 to the Bill makes fundamental changes to the long-established procedures for dealing with party walls, works at the line of legal property boundary and adjacent excavations, all of which are covered by the Party Wall etc. Act 1996, which I took through this House. However, the Bill does so for HS2 phase 2a purposes only.
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By way of explanation, under the Party Wall etc. Act, a building owner wanting to do certain types of work is required to serve advance notice on the adjoining owner, spelling out the intended work. Following notice and in the absence of express consent, a dispute is statutorily triggered after 14 days, at which point Section 10 of the Act provides for a dispute resolution procedure whereby either the parties agree on the appointment of a single agreed surveyor, or, more commonly, each appoints their own surveyor to negotiate the matters not agreed. These two surveyors will then identity a third surveyor who will be called on as much or as little as needed to act as an adjudicator on any points that they cannot agree. The surveyors produce an award that can be appealed, although I am glad to say that very few are. Further awards can be made subsequently as necessary.
The reasonable costs of the administration of this process are normally met by the person doing the works, who is statutorily liable for any loss or damage to the adjoining owner. This, of course, is the reasonable loss—the loss that flows from the works notified. The Act contains safeguards and default provisions and, given that this has been around in central London since the 1930s and in England and Wales since 1997, most people understand the process. As it is investigative, the surveyors use their skill and expertise in construction, building condition, property title and tenure, as well as in the functioning of the Act and the professional guidance issued by their various bodies, to resolve matters.
Schedule 23 to the Bill would change much of that for HS2 phase 2a purposes. I am indebted to party wall experts Michael Cooper and Andrew Thompson, who first alerted practitioners to the issues with phase 1 of the HS2 Bill series in an article for the Property Journal. If the Minister or any other noble Lord has not seen that article and would like to do so, I will arrange to send it through by email. They concluded that serious adverse consequences would likely ensue from the operation of the schedule. I am also indebted to Shirley Waldron, another eminent party wall specialist, for her comments which were partly based on her long experience dealing with Crossrail. I am grateful also for the comments of barrister Alex Frame.
The Bill removes the need for any notice under Sections 1, 3 or 6 of the party wall Act. It attempts to disapply the Act for HS2 purposes, but in fact it also appears to override some common law elements by permitting works thereby on neighbouring property without notice. One of the definitions of party wall—although it is not the only one—is that the line of legal boundary bisects the wall or structure in question,
making it party. The purpose of notice is of course to alert a neighbour to what is about to happen and to provide details. But it also provides the trigger for a counter notice. It seems impossible that there can be a counter notice facility if no trigger notice is possible in its original form. The disapplication of Section 3 of the party wall Act, which is what Schedule 23 would do, effectively disables the notification process for an extensive list of rights set out in Section 2 of the Act, which begs the question of which of those rights remain. Those rights are important because they exceed common law rights.
The Bill refers to
“(right to repair etc party wall)”.
This formula of words is lifted from the marginal notes to the Party Wall etc. Act, but they are not part of the legislation. This might be taken to mean that Parliament intended something different from the Act, especially shorn of the further recitals of the full list of rights under Section 2(2). Seemingly, the neighbour has no say in all this.
Parts of the Party Wall etc. Act where counter notice might be applicable, as I have mentioned before, seem to be rendered inoperable, particularly where one serves a notice to reduce the height of a party wall under Section 2(2)(m). This has an allied provision in Section 11(7), for the service of a counter notice. However, you cannot serve a counter notice unless the originating notice is there, so the drafting appears defective.
Section 6 of the Party Wall etc. Act, which relates to adjacent excavation and construction, is disapplied for any purposes related to phase 2 work. This is perfectly logical for a major underground scheme in an urban area such as phase 1, or, for that matter, Crossrail, but it is much more questionable for this and later phases, for construction and above-ground work. It is not clear what the definition of “Phase 2a purposes” might be in any given instance and it does not appear to be limited to the type of works specified under the Party Wall etc. Act, though doubtless it will be interpreted liberally in HS2 Ltd’s favour. Party wall legislation, after all, is driven by certain clearly specified types of work and not their purpose.
Moreover, it is not clear whether paragraph 5 of Schedule 23, which refers specifically to “(underpinning of adjoining buildings)”, is consistent with the application to
“anything, for Phase 2a purposes”
as opposed to those defined by Section 6(1) and (2) of the Party Wall etc. Act, which are the two tests governing the degree of proximity of works to another person’s building which require notice.
Protective underpinning of neighbouring structures is at Section 6(3) of the Party Wall etc. Act, but it is disapplied in the circumstances of paragraph 6(2)(a) of Schedule 23 and it is not clear what this part of the Bill seeks to achieve. It seems to be the intention to absolve HS2 Ltd from the obligations while retaining the benefits. I am entirely unclear that it achieves this.
Paragraph 6(2) of the schedule proposes the insertion of new subsection (6B) where underpinning to HS2’s structures is involved. This appears to be an additional requirement, but it then goes on to refer to a procedure
for a “consent notice”, as opposed to the normal term, “counter notice”, which inter alia may make further demands on a neighbour wanting to do works. This is misleading terminology because the consent notice can in fact be a notice of dissent.
Save for where the private neighbour needs to carry out work of underpinning to HS2 structures, the power to execute the work is reserved wholly to HS2 Ltd, but at the sole expense of the other neighbour wanting to carry out the works. HS2 Ltd can presumably dictate such terms as it likes, regardless of reasonableness, causes, need or cost of the work.
There is a complicated provision under the schedule’s paragraph 6(2)(b) in relation to new subsection (7A)(b) for notice where a dispute is deemed to have arisen. It seems curious to have a notification process regarding a dispute once the matter is already in the dispute mode. The occasion triggering the requirement of such a notice appears unstated.
The overarching adjoining owner right to be reimbursed for any loss or damage under Section 7(2) of the Party Wall etc. Act is apparently unamended, but it would appear to cut across other matters proposed in this schedule.
Section 7(5) of the Party Wall etc. Act, which is to do with the appointment of surveyors, is disapplied by Schedule 23 in so far as it relates to surveyors acting on behalf of the parties, leaving the matter of any subsequent deviations from the work—which is what that section of the Act refers to—to be settled between the parties. There is no brokerage arrangement for this other than by further arbitration.
The major change is that the resolution of disputes provision under Section 10 of the party wall Act is replaced by a provision for arbitration by a single arbitrator. Again, there is no obvious trigger giving rise to a dispute to which arbitration relates, nor any contractual agreement to refer to. The circumstances are undefined. What if HS2 encounters an unresponsive owner? There is no appointment of surveyors by the owners, nor any third surveyor. There is no process of post-appointment negotiation because no surveyors have been mandated to handle the matter in that way.
No duty applies to the process of investigative brokerage of matters in dispute which no arbitrator can perform, being bound as they are by the Arbitration Act procedures. There is no express obligation on the proposer of the works to meet reasonable or any costs flowing from the proposals, bar the general party wall Act Section 7(2) provision, or the arbitrator’s award, and what happens when one differs from the other I just do not know.
The HS2 Bill goes on to make an insertion at new Section 10(5), referring to
“the notice in respect of which the dispute arises”
suggesting that somewhere in this cat’s cradle, a formal notice of dispute procedure is intended after all, but no provisions for it seems to remain, all the other notifications having been stripped out of the Bill.
This is just a selection of the issues which the Bill raises. More broadly, the basic symmetry of process under the party wall Act would be substantially damaged for the purposes of the Bill, along with the established
party wall guidance and precedents. A statutory but fluid framework, focused on consensus, would be replaced by a single-stage legalistic and inflexible one where contention is assumed. It will create rather than defuse divisions and antagonism and is very likely to involve substantial additional costs. It significantly overrides adjacent owner rights, long granted by Parliament and the common law, and even, on one interpretation, fundamental rights granted under international conventions. In other words, the proposed process reverses the very workable arrangements that have been in place for many years and seems to up the stakes unnecessarily.
The suggested engineer-led solution is flawed. Engineers are of course splendid people, but boundaries, title, land law and occupational rights, neighbour impact, specification and remediation of minor works, consequential losses, and compensatable interference with homes and the operation of businesses are not generally within their professional scope. That is why party wall matters are customarily dealt with by surveyors with the necessary training, experience and professional indemnity cover for such work. This gives the impression of an attempt to graft statutory party wall procedures on to an Engineering Council standard form of contract dispute resolution—equivalent to a “cut and shut” in the second-hand car market.
Nobody would dispute the need to govern works being done by a neighbour that would undermine or damage essential operational HS2 infrastructure. Neither would it be unreasonable to disapply Section 6 of the party wall Act for subterranean works. After all, this was done with Crossrail, and it avoids serving innumerable notices. However, if that is the intention, then this is a convoluted way under Schedule 23, and almost certainly ineffective in achieving these aims. Can the Minister reassure me that this is not some pretext for using powers in lieu of the party wall Act provisions? If that is the case, I suggest that it is an entirely improper use of the legislative process.
My assumption is that in amending the party wall Act, it was not the intention to disapply it completely. That might have been one approach, but at no time did those drafting this schedule make any contact with me, as chairman of the relevant RICS professional panel, nor apparently did they consult any other specialist party wall practitioner group, such as the Faculty of Party Wall Surveyors or the Pyramus & Thisbe Club. These are the reasons I oppose the Question that Schedule 23 stand part, and I hope the Minister will be able to put my mind at rest, although I sense that she may need to write.
A lot of professionals outside are very worried about the effect of this and think that it will create all sort of problems, with litigation to work out what it actually means. The Minister might like to tell the Committee on whose advice the drafting was concluded. In any event, I suggest that she arrange a specific meeting between the Bill team and experts, including at least one of the specialist barristers working in this field, to discuss this special point about the impact on party wall procedures. Subject to knowing exactly what the Bill seeks to achieve, we can then see if something workable can be put in place so that it does
not become a litigators’ paradise. Meanwhile, I ask that the noble Lord, Lord Berkeley, who has put his name to this amendment, and I could meet the noble Baroness and her team to discuss how this should be dealt with in line with trying to achieve the timely progression of the Bill.
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