Undermining land ownership – could mining happen under your development?

As a result of the geographical location of your development site, there may be issues below the ground that need to be dealt with in order to firm up the site’s financial viability. Although you may own the land you intend to build on, third parties may have mines and minerals rights that detrimentally affect the property.

Below is an example case study of where an indemnity insurance policy provided a solution to this problem:-

We were approached to provide cover for part of a proposed development which was known to have a mines and minerals registration held by the Church Commissioners. Although no planning objections had been raised and the site appeared to be exhausted of any minerals that may be of value, the developers were concerned the Church could look for financial compensation in the future, causing delays and possible financial loss.

The Case

The site was a proposed development for up to 29 residential units and 3 commercial units pursuant to planning permission granted after the Commencement Date. The application had already been submitted and the consultation period expired without any material objection. Developers were aware that part of the area where the development was proposed were also subject to a separate registration belonging to the Church Commissioners, which was a mines and minerals title reservation. After investigation, it seemed that the minerals were likely registered as part of a wider exercise carried out by the owner of the rights, prior to the October 2013 deadline under the Land Registration Act 2002. This would have been done in order to ensure they fully protected any overriding interests that may have otherwise been lost as a consequence of failing to register before the deadline. The minerals rights owner, the Church Commissioners, are known as an active party in relation to mining and minerals rights. Whilst the registration of title was likely done as a means to ensure their interest was protected, it was unlikely that it was undertaken with an intention to mine the land in the future. However, they have previously used their interest in mining and minerals rights under development sites to extract financial compensation.


Case law currently states that something is a mineral if it is not part of the ordinary composition of the soil and its presence is exceptional. The provision of a Mines and Minerals policy would provide protection against financial loss resulting from payment of damages or compensation, loss of market value and other associated costs and expenses.

In this case, the developer was clearly concerned that the Church Commissioners could look for financial compensation, jeopardising the development.

A bespoke mines and minerals policy was issued in exchange for a one-off premium and the development was able to progress unhindered.

Do you have any further questions about Mines & Minerals insurance? Amanda Armitage and Matt Rutter at Legal & Contingency are on hand to provide information about our Legal Indemnity policies.

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