Subsidence claim

Annemos

Thank you. What a nuisance. But it must be a lovely area. 

Bluntington88

Here’s a brief outline of my situation:
* 3 years ago subsidence cracks in house 
* 200+ year old oak tree on my land with TPO

* LA refused removal of tree requested by Insurance Company 
* canopy reduction had no effect on movement 
* house is on clay soil 
* 2 years of monitoring by Insurance Company showed seasonal movement 
 * got independent structural engineer’s report 1 year ago, updated 2 months ago. He strongly argues against removal of tree and root barrier treatment. He says that the Seasonal recovery pattern of the soil confirms movement will be ongoing if the roots are removed/restrained by tree removal or root barrier. This is because the absence or reduction of roots means the soil will ‘heave’ with more water remaining in the soil than when the tree was taking up water from the soil.
* Strongly argues for underpinning
* refusal by Loss Adjuster to meet/ discuss/negotiate. 
* application for adjudication by FOS inevitable (once research of recent/similar Cases is complete)
Please, let’s continue to support each other. 

Annemos

Totally agree. And gather as much information as we can. 

Annemos

Anybody reading this, where there is NOT a heave problem for buildings. And the Tree has a TPO order on it. But the TPO tree is in Private Hands. And it is doing damage to another homeowner's property. 

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First, here is what one Council needs to be shown, to prove that the Tree is a problem tree with respect to Subsidence:

https://www.cambridge.gov.uk/building-subsidence-caused-by-trees

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And here is a very wordy description of a legal case with a summary paragraph at the end..... what happens if the Local Planning Authority (Council) DOES NOT AGREE that the tree should be cut down. And.... what happens if they DO agree that the tree can be cut down. In this paragraph towards the end, when they say homeowner... they mean the "owner of the damaged home".   

https://arboriculture.wordpress.com/2019/06/30/subsidence-tree-preservation-tpo-perrin-northampton/


As a very straightforward summary, the appeal case of Perrin & Anor v Northampton Borough Council & Ors [2007] EWCA Civ 1353 (19 December 2007) therein determined that where a tree subject to a TPO is implicated in a subsidence damage claim – and permission for removal is sought from the LPA – it cannot be assumed that removal will be consented. Indeed, the LPA can rightly refuse consent, citing the need for an engineering solution. In such an eventuality, the LPA will however be liable to subsidising the costs of the engineering solution      –      or, if the LPA grant consent for removal and the tree owner refuses, this responsibility passes on to the homeowner (or their own insurer). In this eventuality, it is pertinent for the LPA at least to consider the theoretical value of the tree(s) by assessing them in line with a valuation system such as Capital Asset Valuation of Amenity Trees (CAVAT), which can help equate the value of the trees against the cost of underpinning (including the associated activities to facilitate the underpinning).

talcy

Hi I have 2 questions relating to this thread. I hope I have done this right as it is my first posting!!

If after 10 years of a subsidence claim and the FOS finding in our favour and the insurer electing to pay compensation and a cash settlement in lieu of works, can I double check this cash settlement will not be subject to TAX @ 40%? You say somewhere in this thread that an insurance payout is not income and therefore not taxable. How do I verify this before agreeing? I have checked with our insurance lawyer and (weirdly) she is not sure. I have checked with my accountant and he is not sure either. 

The second question relates to the fact that my property is a 5 bedroom London Victorian house and therefore the costs of underpinning and superstructural works + AA + compensation far exceeds the FOS limit of enforceability on the business (ie £375k - which seems totally inadequate for London subsidence claims esp in 2024!! ). So even though the Ombudsman has found in our favour and directed the business to underpin and repair without applying any underinsurance, this - if we accept - means the insurer only has to follow this up to £375's worth. So we are at a loss to know what to do. If we cannot agree a sensible settlement figure, and cannot accept the FOS decision, does this mean we have waited for well over a year for this Ombudsman decision, but it has no value? It seems that it offers no real support to the home-owner if accepted and the insurer disregards it beyond the £375k as this then cannot be taken to court afterwards (if we could ever afford to take the limitless-budgeted insurer to court who has so far been very happy to spend hundreds of thousands on legals to avoid underpinning). Even if the insurer gets to a point where it has sorted all the underpinning but only scratches the surface of the superstructural repairs. Does our policy wording not offer enough protection to force the insurer to make good the house, so we are at least no worse off than we were before we claimed in 2014 - even if it costs more than the FOS limit (which in any case is less than our total sum insured/liability limit on the policy)?

I appreciate any advice you can give on these 2 questions! 

Bluntington88

 I have recently re-read  my Insurance Policy Schedule which states I have ‘Unlimited’ Building Cover. The excess I would have to pay on a Claim for subsidence is £1000.  However, elsewhere it qualifies this by referring Policy Holders to the Insurance Company’s Policy Wording document. In looking up the details for an insurance claim I came across  the explanation that they would cover only replacement value (not necessarily the whole cost of putting it all back to pre-subsidence condition). I’d advise getting in writing the insurance company’s final offer amount. Legal fees can far outweigh the cost of supplementing the insurance offer. Maybe write to the CEO of your Insurer and put your case?
Good luck  with whatever you decide. 

Annemos

Hello talcy. Welcome to the Forum.

It sounds like you have been through a terrible time. It must have been a real battle.    As with Bluntington88, I do wish you a good outcome. 


I am not an expert in what you are asking.... but on your first question I found this through a search. You can open up the tabs for the different types of Insurance pay-out. You could probably also get additional confirmation of what it says for your case, through HMRC. 


https://comanandco.co.uk/insurance-and-compensation#Buildings-insurance

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On the second question, I do indeed understand all your points. I suspect this has to be discussed with a solicitor perhaps? That's what this article below implies, for complex cases like yours. The FOS site also says the same thing re getting legal advice.

A solicitor would also be able to look at the actual Insurance Policy wording, to see if that issue of Indemnity could be imposed..... and if so, at what stage. Does it ever override the FOS cap? Or could it only ever be imposed through a Court action?     (Indemnity: putting back to the way it was before the event). 

Also, I remember reading, that if the FOS finds against a policyholder, then it is unlikely that a Court would find against the FOS ruling. I do not know if the reverse applies:  if the FOS give a ruling in favour of the policyholder, would a Court usually follow the same line and also find in their favour? Could there even be the possibility of an out-of-court settlement: where you come to a compromise which is above the 375k and then you do not take them through the Court Process? 

It is so complex and beyond my knowledge. Hopefully a solicitor would be able to have a preliminary discussion with you, about your options. And also would be able to discuss, if the Court route would just be too onerous (looking at the actual numbers, too). 

It is very sad. The companies do indeed have resources that far outweigh the policyholders'. (When you think about it, it does not seem quite fair, that a much smaller home in a less expensive part of the Country, could be rectified within the FOS cap. But your London home cannot.) 

https://wards.uk.com/news/fos-award-limits-increased-to-355000-from-1-april-2020/

talcy

Thanks Annemos and I will check out your links. In terms of resolution, because I caught our insurer and their legal team out on some basic lies and fabrications that they swore under oath in court against our local council (and in my name against my interests), yes we have been lucky and thanks to them trying to have their cake and eat it, we are now looking at a decent out of court settlement. We do have an independent insurance lawyer (and our insurer is paying a contribution towards their time to help us reach a fast settlement so they can get back to pursuing their subrogation against the council). Unfortunately this lawyer mainly seem to operate as a conduit between us and does not seem capable (or willing) to research and answer our only 3 key legal questions (not the tax one, not the "what happens if we accept or decline the FOS decision, how does that affect our settlement negotiations and our rights to be indemnified correctly? and finally not the terms that they ask for in exchange for this settlement - ie to exonerate them for knowingly having pursued a case which compromised us (their "lay client") in court". Our insurer has been quoting CPR22 PD 3.6A of the Civil Procedure Rules (CPR), which they say gives them the right to sign anything on our behalf without us knowing, and our lawyer feels it is not worth their time researching and challenging this. 

I would say (and each time this is confirmed when I read threads like these) that big business is winning over democracy. They are becoming less and less accountable for their actions and therefore often act more and more unfairly towards their customers and get away with it. As a result insurance is fast becoming (in many ways already is) something we are forced to take out (for instance if we have to get a mortgage) but are advised never to claim on so that the cover itself remains affordable and our house re-sellable. The big insurers have limitless budgets to pursue SLAPPs which individuals and home-owners cannot afford to navigate. The insurers have lobbied successfully in parliament (and continue to do so) to ensure policies are more suited to them and the regulatory bodies put in place to make sure these business do not act unfairly are weak and unable to enforce anything. Yet these ombudsmen are the only recourse the consumer has, The only bodies who can deal with their complaints (the main regulating bodies such as ABI, FCA, PRA.... are not available to the consumer). And so the system is not working well for the consumer. If you're persistent and lucky you can get a big media watchdog on your side, and the fear of extensive negative exposure can help sway an insurer to settle fairly. 

And just to say forums such as these are amazing and at least we can learn from others and perhaps get support in this. Thanks to all of you who have shared invaluable information.

Annemos

Yes, it is very depressing. 

One of the saddest things for me, was that I had no idea how Insurance works, but I had always assumed that my Insurance Company would be there for me, in my time of need. That they would do the right thing. 

I discovered that this was a very naive concept of mine. So often, in the real world, people have to push and push to get the correct actions. 

In fact with all companies these days. 

talcy

Yes I like the umbrella analogy: The insurance companies sells you an expensive umbrella that does everything to keep you dry in adverse weather. And then when it rains, they take the umbrella away!