Beware of trespassing

A landowner may be entitled to damages for trespass even where he has not suffered actual loss. This was the outcome in a recent case which also gave some guidance on how these damages should be assessed.

In Stadium Capital Holdings (No 2) Limited -v- St Marylebone Property Company Plc (1) Clear Channel UK Limited (2) the defendant erected an advertising hoarding projecting over land owned by the claimant. When the claimant sought damages for trespass, the High Court awarded it an amount equal to 100% of a fee paid by an advertising operator to the defendant for using the hoarding during the period for which the hoarding was a trespass. When the defendant appealed against the level of damages, the Court of Appeal concluded that the basis for assessing damages for trespass was flexible but that the appropriate measure was the amount that reasonable parties in that particular situation would have negotiated as a fee for a hypothetical licence permitting the trespass, and sent the case back to the High Court to re-assess the level of damages to be awarded.

The High Court, having decided that "hypothetical negotiation damages" were appropriate, awarded the claimant 50% of the advertising licence fee, as a reflection of the sort of reasonable compromise which is often reached in similar cases. The Court took into account a number of factors which would have affected a hypothetical negotiation, including any ‘trump cards’ to which the hypothetical parties would have had regard. In this case the trump card was clearly the fact that the claimant could stop the defendant retaining the hoarding by obtaining an injunction. Also to be borne in mind are any risks which the parties would have appreciated when undertaking the negotiations. For example, the parties would have been aware that the advertising agreement was a lucrative deal which might be frustrated or renegotiated if the claimant was too greedy or that the licence fee might reduce if there was too much delay.

While it concerned an advertising hoarding, this case may be relevant in other situations, such as where a crane on a construction site projects over neighbouring land.

For more information on trespass, please contact Lucinda Brown on lucindabrown@hewitsons.com or on 01223 461155.