Large, complex property developments can be highly lucrative for developers and investors. However, challenges can arise with one of the primary issues being when the building project comes under judicial review. In these cases, Judicial Review Indemnity (also referred to as JR Insurance) can potentially help recoup building costs, legal fees, and loss in value of the developed land.
Judicial review affects large developments where Local Planning Authorities (LPAs) have given consent for the go-ahead of the project. If an outside party i.e. local residents challenge the decision of the LPA, JR Insurance can cover the cost of delays or abandonment of the project.
What is Judicial Review?
Judicial review explores and examines the lawfulness of the decision-making process of (in the case of property developments) the LPA, government department, or local council. It does not make a judgement on whether the decision is correct or incorrect. Instead, it focuses on the decision-making process and whether it is legally sound. For example, if an LPA overlooked key evidence illustrating why a planning project should not proceed, this may be eligible for judicial review. Put simply, the local authority’s decision must be proven to be legally incorrect instead of unpopular.
How damaging can judicial review be?
Judicial review can be seriously damaging to a property development project, primarily through delay and cost. Even a claim with little merit can trigger months of uncertainty while the courts decide whether to grant permission for review, followed by additional months for the substantive hearing. Financing agreements often have fixed drawdown or completion deadlines, so this delay can breach loan covenants, trigger higher interest costs, or cause funders to walk away entirely.
Judicial review timeframes
In England and Wales, judicial review claims are governed by strict time limits. As a general rule, a claim must be filed promptly, and in any event not later than 3 months after the grounds for the claim first arose.1
However, for planning cases, a claim must be filed within six weeks of the date of the decision, action, or failure to act being challenged.2 This shorter limit was introduced specifically to reduce uncertainty for developers given the commercial sensitivity of delay in this sector.
How can Judicial Review Indemnity Insurance (JR Insurance) help?
JR Insurance can be taken out by developers after planning permission for a construction project has been granted but before any challenge or objection to the project has been raised. This type of indemnity insurance can cover costs associated with delayed or cancelled projects following either an objection to the development or a successful overturning of the LPA’s decision.
Securing JR Insurance means building can commence without having to wait for the six-week timeframe during which a claim for judicial review can be submitted by a third party. A developer can provide assurance to financial investors in the project that financial protection is in place and can cover insured losses incurred.
What does Judicial Review Insurance cover?
JR Insurance can cover costs associated with a delayed or cancelled project.
Cover can include:
- Loss in property value, usually measured as the difference between the property’s value with planning permission and without it, if an alternative permission can’t be secured.
- Legal and professional fees, such as solicitor and surveyor costs incurred in defending the challenge.
- Construction delay costs, including continued site hire/equipment costs and increased interest charges on development finance while works are halted.
- Third-party settlement costs ordered by the court.
- Demolition, alteration or reinstatement costs if work has to be undone or changed as a result of the challenge.
- Cost of pursuing an alternative or substitute planning application if the original consent is quashed.
- Some insurers now include delay/injunction costs as standard, covering losses if a judge grants an interim injunction halting the site.
When is Judicial Review Insurance taken out?
It is not possible to take out this insurance prior to the application being granted, however, it can provide financial protection for developers in the event of project delays or cancellation, if the judicial review of the decision made around granting of planning permission is upheld.
Real case scenarios
Objections and challenges to planning decisions can potentially be raised by a wide range of third parties including local residents, conservation organisations, competing developers, and environmental agencies. The following three real-life cases illustrate the nature of why a judicial review claim can be made and possible outcomes.
Wimbledon Park Expansion (2026)
Planning permission was granted for the All England Lawn Tennis Club’s proposal to expand the site of the Wimbledon Tennis Championships to neighbouring land, leading to a challenge being made against the planning permission decision. However, the High Court rejected a challenge brought by the Save Wimbledon Park campaign group against the Wimbledon expansion scheme. The dispute centred on whether land acquired from a former golf course was subject to a statutory trust for public recreation. The court found it was not, allowing the development to proceed.
Iver Data Centre Challenge (2026)
The government admitted it wrongly granted planning approval for a £1bn data centre at Iver, Buckinghamshire, after campaign groups Foxglove and Global Action Plan challenged the decision in the High Court. The facility’s significant electricity demands and environmental impact — including its location on green belt land — had not been properly considered, and the Government has agreed that permission should be withdrawn.
Chinese “Mega-Embassy” Development, London (2026)
At the time of writing, the High Court has granted permission for a judicial review of the approval of a proposed 20,000 square foot Chinese Embassy (known as the ‘mega embassy’) at Royal Mint Court. The challenge concerns planning, security, and consultation issues surrounding the scheme. We wait with interest for the outcome of this challenge.
In summary
If you would like to discuss your options around Judicial Review Indemnity Insurance, please contact our team today.
Some specialist insurers may still offer cover after a challenge has been threatened or even commenced, but this is a different risk profile. The insurer would want to assess the merits of the claim, and cover may be more expensive, restricted, or unavailable. The most common use of JR Insurance is as a precautionary measure immediately after consent is granted and before any challenge is lodged.
1.https://www.justice.gov.uk/courts/procedure-rules/civil/rules/part54
2.https://www.russell-cooke.co.uk/news-and-insights/news/navigating-time-limits-in-judicial-review-key-insights-and-case-studies
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