Since its inception in 1895, the Shelfer Test has been applied in rights of light cases to inform court decisions on whether to grant an injunction (if one is claimed) or damages in lieu.   

While it was arguably a good guide or starting point, it has often been criticised for being too ‘mechanical’ and ‘inflexible’.  To me it is too simplistic.   

To recap, the test Shelfer Test states that: 

• If the injury to the plaintiff’s legal rights is small
• And the harm can be estimated in money
• And a small sum of money would be adequate compensation
• And the case would be oppressive to the defendant to grant an injunction – then the court may award damages, instead of issuing an injunction

With this in mind, one has to ask, what is a small injury and what is a small sum of money? 

The test has been criticised by academics too, such as Professor Kevin Gray, for being too rigid, not allowing courts to fully consider the balance of convenience between parties. This inflexibility can lead to unjust outcomes, especially in complex modern disputes. 

The Supreme Court in Coventry v Lawrence (2014) criticised the “slavish” application of the Shelfer test, advocating for a more flexible, case-by-case approach that considers all relevant factors, including public interest.  

Fast forward a decade and the recent judgement in Ludgate House builds upon the Supreme Court’s view and distils eight key criteria or guiding principles to consider when determining whether to award an injunction or damages: 

1. The Court should adopt a flexible approach to whether or not to grant or refuse injunctive relief. It is not only in an exceptional case that injunctive relief should be refused.  
2. Subject only to the legal burden of proof remaining with the defendant, there should be no inclination either way whether to award injunctive relief, which should depend on all the evidence and arguments.   
3. A relevant factor is whether the obstruction is legal or not, and if the defendant has acted fairly and not in an unneighbourly spirit. 
4. The court should be careful not to allow an action for an injunction to be used as a means of extorting money.  
5. The public interest is a relevant factor.  
6. The existence of planning permission can be a factor and has real force where the planning authority has been influenced by the public benefit. 
7. The fact that the grant of an injunction would involve a loss to the public or a waste of resource is a factor.  
8. It is a factor if the financial implications of an injunction for the defendant would be disproportionate to the damage done to the claimant if it was left to a claim in damages.  

From a developer’s perspective this is an important step forward. Not only does it provide the judge with greater flexibility to award damages in lieu, by reference to having ‘no inclination either way’ on the subject, but some of the other factors can be managed by developers to mitigate risk. For example, point 3 relates (in part) to conduct which is within the developer’s control, and points 5, 6 and 7 could be managed to some extent at least through consultation, PR and socio-economic evidence. If these points can be addressed throughout the design and development processes, developers will be in a stronger position to defend injunction claims and limit financial exposure from rights to light. 

While the Shelfer test provided a basic framework for when damages may substitute for an injunction, its rigidity has been widely criticised. Modern courts increasingly favour a more nuanced, discretionary approach, weighing all circumstances rather than mechanically applying the test.   

The Ludgate House test outlined above does in my view provide just that, and it should be considered at each stage of the development process to mitigate injunction risk and minimise financial exposure from rights of light. 

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