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Development of what will become the tallest skyscraper in the City of London is to go ahead after the local authority voted to use planning powers allowing it to overrule 'right to light' claims if those affected receive compensation.

The City of London Corporation will use powers under section 237 of the 1990 Town and Country Planning Act to temporarily acquire the 22 Bishopsgate site, which it can do in order to "assist delivery of developments which achieve public benefit". The corporation was asked to intervene in the project by its developers, which were concerned that right to light claims from neighbouring owners would further stall development at the site, according to Planning Resource.

A report by the corporation's chief planning officer and solicitor (16-page / 257KB PDF) recommended that the planning committee vote to use the section 237 powers, on the grounds that the planned development would "contribute to the achievement and improvement of the economic well-being of the City as a whole".

"The proposed development would … [provide] a significant increase in flexible office accommodation and [support] the strategic objective of the corporation to promote the City as the leading international financial and business centre," the report said. "It is considered desirable for the development to progress and be completed as soon as possible."

"The public interest is in works on this long standing construction site progressing so that the land can be brought into beneficial use and the surrounding public realm enhancements delivered without undue delay. It is the view of officers that, given that negotiations have been undertaken with affected owners, and given that there are a large number of interests where agreement has not been reached ... absent engagement of section 237, the development is unlikely to proceed, and certainly will not proceed within the timescale contemplated," the report said.

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Property disputes expert Craig Downhill of Pinsent Masons, the law firm behind Out-Law.com, said that the corporation's decision to use the section 237 powers would be "welcome news" for developers, "particularly those whose schemes are in inner city areas and are considered to be of importance in terms of bringing much-needed regeneration to an area".

"In urban areas, rights of light enjoyed by neighbours of such schemes can be problematic as those neighbours will often assert their rights by threatening the developer with an injunction to prevent an infringement of their rights of light and seeking to negotiate a release of those rights for significant sums," he said.

"Section 237, if used properly and effectively by a local authority, provides an effective way of unfreezing developments which are in the public interest but being delayed by unreasonable demands of neighbouring owners. It has the effect of overriding adverse rights such as rights to light and therefore removes the risk of an injunction," he said.

A right to light gives the owner of a building with windows the right to maintain a level of natural daylight by objecting to construction or any other obstruction. The right can be created if granted expressly by deed, or granted by implication. It can also be established in some cases by 'prescription', which is a legal term used to refer to the enjoyment of light through a window without interruption for a period of 20 years even if the other party has not consented.

Developers plan to construct a 62-storey tower at the 22 Bishopsgate site, after the corporation resolved to grant planning permission for the project in November. Once complete, the building would provide 1.4 million square feet of usable space including offices for about 12,000 people and up to 100 companies, as well as a free public viewing gallery at the top of the building. The developers plan for the building to be open for business in 2019.

The building previously planned for the site, known as the Pinnacle, was granted planning permission in April 2006 but construction stopped after the developers ran into financial difficulties during the financial crisis. Currently, only a concrete stump from the abandoned project is visible at the site.

Property disputes expert Craig Downhill said that the use by the corporation of the section 237 powers would entitle owners of neighbouring buildings impacted by the development to compensation "calculated by reference to the diminution in value, if any, of the neighbour's dominant land".

"Section 237 therefore removes the litigation risk to the developer," he said. "It can put money aside to meet the compensation that will be required to be paid to the neighbour, and get on with the development."