When the Party Wall etc. Act 1996 Meets Insurance-Driven Subsidence Claim Works: Why the Process Breaks Down

The Party Wall etc.  Act 1996 was designed with a relatively simple scenario in mind: one homeowner (the ‘building owner’) wants to carry out works that may affect a neighbouring property, and the neighbour (the ‘adjoining owner’) is entitled to protection through a formal notice and surveyor process.  In principle, it is a well-balanced framework.  It encourages neighbours to resolve matters amicably while providing a statutory procedure when agreement cannot be reached.

However, when works are not arranged directly by homeowners but instead by third parties such as buildings insurance companies managing subsidence claims, the system often struggles to function as intended.  The Act’s homeowner-centric structure creates practical and procedural problems that can lead to confusion, delay, and occasionally dispute.

This blog explores why the process becomes problematic when insurers and their appointed professionals take the lead.

The Act Assumes Direct Homeowner Control

The structure of the Party Wall etc.  Act 1996 assumes that the building owner:

• intends to carry out works

• serves the statutory notice

• appoints surveyors if necessary

• ultimately controls and pays for the works

 In a subsidence claim, however, this assumption often does not hold true.  Once a claim is accepted, the insurer typically appoints loss adjusters, engineers, and contractors, and the homeowner may have little practical involvement in the project.

As a result, the person legally responsible under the Act is not always the person actually managing the works. 

Confusion Over Who Should Serve Notice

Under the Act, the building owner must serve notice on the adjoining owner before relevant works begin.  In insurance-led subsidence repairs-such as underpinning, piling, or excavation near the boundary-the works frequently fall squarely within the Act.

Yet the insurance-led project team may not always consider the Party Wall process early enough.  Common issues include:

• notices not being served at all

• notices being served late, after works have already been designed or started

• notices being served incorrectly by contractors or consultants rather than by the building owner

• notices not being served upon the correct legal adjoining owners

This creates uncertainty over whether the statutory process has been properly triggered.

 The Homeowner Has Limited Control

Even when the homeowner understands their obligations under the Act, they may not control the timing, scope, or design of the works.

For example:

• engineers determine the underpinning scheme

• insurers appoint contractors

• loss adjusters control budgets and programme

This can make it difficult for the homeowner to meaningfully engage in the Party Wall process, particularly when surveyors request changes or additional protections for the neighbouring property.

In effect, the homeowner becomes the legal party to the process but not the practical decision-maker.

Surveyors Struggle to Identify the Real Decision-Maker

Party wall surveyors are accustomed to dealing directly with the building owner or their architect.  In subsidence cases, however, surveyors often find themselves communicating with a chain of intermediaries:

• the policyholder

• the loss adjuster

• the structural engineer

• the insurer’s claims handler

• the contractor

When technical issues arise-for example design modifications requested by the adjoining owner’s surveyor-it can be unclear who has authority to approve changes.  This can slow down the award process and frustrate both neighbours.

Delays and Programme Conflicts

Insurance-driven projects tend to operate under strict claims-handling timelines.  Insurers understandably want to progress repairs quickly to mitigate costs and restore properties.

However, the Party Wall Act requires statutory notice periods and the potential appointment of surveyors.  These processes can take time, particularly if adjoining owners dissent and surveyors must prepare an award.

When the Party Wall process is only considered late in the design stage, it can cause:

• unexpected project delays

• disputes over whether works can proceed

• tension between neighbours and insurers

Liability for Damage During the Works

 

Another important aspect of the Party Wall etc.  Act 1996 is the allocation of responsibility if damage occurs during the works.

The Act makes the building owner directly responsible for any damage caused to the adjoining property as a result of the notified works.  If damage occurs, the building owner must either:

• make good the damage, restoring the adjoining property to its previous condition; or

• pay financial compensation in lieu of carrying out the repairs.

This is a key protection for adjoining owners and is typically reflected within the Party Wall Award, which may also include a schedule of condition recording the neighbouring property before works begin.

In a traditional homeowner-led project this responsibility is usually clear.  However, in insurance-managed subsidence repairs the situation can appear more complicated.  Although the works may be designed by engineers, arranged by loss adjusters and carried out by contractors appointed by the insurer, the legal liability under the Act still sits with the building owner.

In practice, insurers will normally deal with any valid damage claims arising from the works.  However, the statutory framework still places the primary responsibility on the policyholder as the building owner, which can create understandable concern if the process has not been properly explained.

The Problem of Paying Party Wall Surveyors’ Fees

Another practical difficulty arises in relation to party wall surveyors’ fees.

Under the Act, the building owner is usually responsible for paying the reasonable fees of the adjoining owner’s surveyor.  It is also widely expected within the profession that these fees will be settled upon service of the Party Wall Award, or very shortly thereafter.

In a traditional homeowner-led project, this is usually straightforward.  The building owner instructs the works and pays the relevant professional fees as they arise.

In an insurance-managed subsidence claim, however, the payment process is often far more complex.

Typically, the sequence involves:

• the adjoining owner’s surveyor issuing their invoice

• the building owner’s surveyor submitting it to the loss adjuster or managing agent

• the adjuster reviewing and approving the cost

• a report being submitted to the insurer

• the insurer processing payment through its internal payment systems

Each stage can introduce delay.  Insurance payment systems are rarely designed to process invoices immediately, and approvals may require several layers of review.  As a result, what surveyors expect to be prompt payment can become a delay of weeks or even months.

This creates a difficult situation for the policyholder.  Under the Party Wall Act, the legal responsibility for the fees sits with the building owner, even though the insurer is effectively controlling the works and the payment process.

In some cases, adjoining owners’ surveyors-faced with prolonged non-payment-may pursue recovery of their fees directly from the building owner.  This can lead to the uncomfortable scenario where a policyholder becomes the subject of a debt claim or legal action, despite the fact that the invoice is intended to be settled by their insurer.

For homeowners already dealing with the stress of a subsidence claim, this can be both confusing and unfair.

Responsibility and Liability Become Blurred

These payment issues highlight a wider problem within insurance-managed projects.

The Party Wall Act places legal responsibility on the building owner, but the practical control of the works-and often the financial decision-making-sits with insurers and their appointed representatives.

This mismatch between legal responsibility and operational control can create tension, delay, and risk for everyone involved.

A Framework That Needs Better Integration

None of these issues arise because the Party Wall etc.  Act 1996 is inherently flawed.  In fact, its principles work well in traditional neighbour-to-neighbour building projects.

The difficulty lies in the modern reality of insurance-managed construction work, where the homeowner is often only one participant in a much larger claims-handling process.

Better integration between insurers, loss adjusters, engineers, and party wall professionals would help address many of the current problems.  In particular:

• Party Wall considerations should be identified at the earliest design stage of subsidence repairs

• Loss adjusters should ensure notices are served properly and on time.

• All parties should recognise that the homeowner remains the legal building owner under the Act and ultimately responsible for ensuring

• As the policyholder (‘building owner’) is ultimately responsible for ensuring the works are carried out legally and that the interests of the adjoining owner are protected, it is important that all parties are aware of this and provide the necessary assistance and support to protect and safeguard the building owners legal position.

• payment mechanisms for party wall surveyors’ fees should be agreed early to avoid delays and disputes.

How Party Wall Assist Helps Manage the Process

We regularly deal with Party Wall matters arising from insurance-led subsidence claims. 

Our role is often to bridge the gap between the legal framework of the Party Wall Act and the practical realities of insurance claims management.

Our approach focuses on clarity, early planning, and communication between all parties involved.

In particular, we:

• Establish an early understanding of all parties involved in the claim, including policyholders, insurers, loss adjusters, engineers, contractors, and adjoining owners.

• Cleary explain the legal responsibilities of each party under the Act, ensuring that policyholders (building owners), insurers and adjoining owners all understand where liability sits and how the process operates.

• Review any Party Wall Notices that may already have been served by loss adjusters or agents to ensure they have been correctly issued.  This includes confirming that notices have been served by and upon all legal building owners, not simply the named policyholder and neighbouring occupiers whose details were initially provided.  In many cases this may include freeholders, leaseholders, and tenants.

• Provide early reporting of estimated fees so that insurers can set accurate financial reserves within the claim. These may include:-

  • Building Owner’s Surveyor’s fees

  • Adjoining Owner’s Surveyor’s fees

  • Third Surveyor’s fees

  • Advising Engineer’s fees

• Provide early reporting of estimated party wall surveyors’ fees so that insurers can set accurate financial reserves within the claim.

• Provide regular updates to all parties involved, allowing works to be planned effectively.  These updates may involve policyholders, authorised representatives, loss adjusters, engineers, contractors and adjoining owners.

• When an adjoining owner’s surveyor is appointed, we discuss and negotiate realistic payment arrangements from the outset.  This includes confirming that fees will ultimately be settled by the home insurer and not the building owner and agreeing practical timeframes for payment.

• When adjoining owner’s surveyor’s invoices are received, we ensure they are submitted through the correct reporting channels and clearly communicate the agreed payment arrangements.  This helps reduce delays and mitigates the risk of disputes or legal action against the policyholder.

By taking these steps early in the process, we aim to ensure that the statutory requirements of the Party Wall Act are met while also aligning with the practical realities of insurance-managed subsidence repairs.

Conclusion

The Party Wall etc.  Act 1996 remains a valuable mechanism for protecting neighbouring properties and resolving disputes.  However, when subsidence works are arranged by insurers rather than homeowners, the Act’s homeowner-focused structure can create confusion and inefficiencies.

Until the insurance industry routinely incorporates Party Wall procedures into its claims processes, surveyors, homeowners, and neighbours will likely continue encountering the same practical difficulties.

With the right professional support and early coordination, however, many of these issues can be avoided-ensuring that both the legal process and the repair works proceed as smoothly as possible.

Should you require advice or for your subsidence claims to be managed and handed effectively, please contact out team for further information.