The curious case of the church roof repairs
Our client owned a large commercial warehouse in the West Midlands. When they came to remortgage the property a few years ago, a diligent solicitor discovered that - since the original purchase - the title had become subject to a Unilateral Notice for chancel repair liability in favour of the local Parochial Church Council (PCC). This updated and reinforced the owner’s potential liability for church repairs and prompted their solicitor to recommend taking out chancel liability insurance.
The issuing of the Unilateral Notice indicated a greater likelihood of a claim at some point in the future, so we wanted to investigate the circumstances further. We learned that the property was some distance from the church in a built-up area, so any liability would be heavily diluted and on that basis, we provided a policy with a £500,000 limit for a premium of £495.
Then, in December 2017, our client received a letter from the PCC advising them that the chancel roof of the church needed repairs costing £90,000. In strictly legal terms, because the responsibility had been assessed as ‘joint and several’, a single plot owner could have been held responsible for the whole sum, with the onus on them to identify others with whom to share the burden.
Fortunately for our client, the PCC had instead identified the owners of 16 large plots and asked each for £5715 as a one-off payment, in return for which the Unilateral Notice would be cancelled, absolving the owners of any future liability.
The PCC’s approach was fair, but also firm. Two of the 16 claimed they couldn’t afford to contribute. Having assessed their business accounts, the PCC agreed that one could pay less, but insisted the other pay up in full!
Having been notified of the claim, our in-house claims team had to decide whether to accept the liability or challenge the claim’s validity. This is a crucial moment in any claim, requiring a thorough grasp of the background and all relevant facts before making a judgement.
The PCC had produced a background document based on specialist advice received prior to registering the Unilateral Notice. The original tithe document confirming that the affected properties were subject to the liability dated from 1847 and was more than eighty pages long.
An extract of several key pages sent to our client was hard to decipher. Fortunately, several of the other landowners had already instructed their solicitors to assess the PCC’s documentation and subsequently agreed to pay.
On that basis, we were happy to take a commercial decision to pay the amount demanded without incurring the additional expense and delay of instructing lawyers. We’ve learned from previous chancel claims that it’s rarely simple or straightforward determining whether or not such archaic liabilities apply.
From our client’s point of view, the claim clearly had a happy ending. Just three weeks had elapsed from the moment we were notified of the claim to the money arriving in their account. A bonus was a settlement letter from the PCC confirming that our client had no further liability for future repairs.
To the uninitiated, it might seem bizarre that - two decades into the twenty-first century - we’re still seeing claims for chancel repairs.
To those of us more familiar with the endless vagaries of the insurance world, it’s just another reminder that wherever there’s any kind of claim to be made, there will be someone there to make it!
Richard Ward | Broker Underwriting Team Manager
Countrywide Legal Indemnities
T: +44 (0)1603 753833