Aviva Insurance Limited · DRN-6245964

The complaint 4, a charity, complain about Aviva Insurance’s Limited’s handling of a claim, made under their commercial property insurance policy, about subsidence damage at their community hall. What happened The background to this complaint is well known to both parties, so I’ll provide only a brief summary here, concentrating on the key issues as I see them. 4 have a commercial property insurance policy underwritten by Aviva which covers their community hall. They made a claim in September 2019 after noticing cracks in the walls of the property. Aviva appointed Loss Adjusters, who carried out an inspection in December 2019. They concluded that the hall had likely suffered an episode of subsidence caused by root-induced clay shrinkage. So, in January 2020, Aviva accepted the claim. There were further investigations after 4 reported water ingress at the property. And an arborist was commissioned to carry out an inspection – the report being provided in October 2020. Discussions were held with a third party who owned the trees likely to be causing the problem. They were at first reticent to take any action. However, by March 2022, 4 reported that the tree work was completed. They’d also reported further and worsening damage, in early 2022. Aviva had begun monitoring for movement of the property in October 2021. In May 2022 – after around eight months of monitoring, of which only two months or so were after the trees had been removed – Aviva declared the property stable. They said that meant the mitigation (tree removal) had been successful, no further mitigation work (underpinning, for example) was necessary, and the repairs to the superstructure – filling the cracks and re-decorating – could begin. On that basis, they made a cash offer to 4 to settle the claim. Once they’d subtracted the excess and made an adjustment for what they described as underinsurance, the settlement offer was just under £800 – with any VAT payment to follow, if VAT was incurred. There was some confusion at this point. 4 appeared not to respond to the offer, which led to Aviva closing the claim and paying what had been offered. Aviva later admitted to missing an email from 4. In any case, suffice to say 4 weren’t happy with the settlement offer and they remain unhappy with it, leading to two complaints to Aviva which 4 then brought to our service.

-- 1 of 16 --

In short, 4 believed, when they made the complaints: (a) there should be no reduction in the claim settlement on the basis of under- insurance; (b) the mitigation work undertaken so far had not made the property stable and its condition continues to worsen (they provided a quote for what they believed to be the necessary work to rebuild parts of the building – with adequate foundations – at around £80,000); (c) Aviva should pay for repairs to some of the support structures to the roof (steel trusses) which are now distorted due (4 say) to the subsidence movement; (d) Aviva should pay for repairs to the floor at the property, which has tilted towards the rear of the hall due (4 say) to subsidence movement; and (e) Aviva should compensate them for delays and poor service throughout the handling of the claim. Our investigator looked into 4’s complaint and thought it should be upheld in-part. She said Aviva had calculated the underinsurance adjustment incorrectly – in that they had not based it on the terms of the relevant legislation, the Insurance Act 2015. She thought 4 were underinsured, but Aviva should re-calculate the proportional settlement by comparing the premium 4 had paid with the premium they ought to have paid – and not by comparing the true cost of rebuilding the property with the cost declared by 4. She also thought Aviva should pay £250 in compensation for the inconvenience 4 had suffered as a result of Aviva applying the wrong method in calculating the underinsurance, which had caused delay and confusion. But she didn’t think Aviva were obliged to pay for the repairs to the roof support or the floor, or that further mitigation work was necessary. 4 didn’t agree with the proposed outcome and asked for a final decision from an ombudsman. It’s only fair to point out that Aviva also disagreed. They believe the policy terms on underinsurance allow them to settle the claim as they did. I agreed with our investigator that the complaint should be upheld in part, but my reasoning was different and so was my proposed outcome. So, I issued a provisional decision. That gave both 4 and Aviva the chance to provide further information or evidence and/or to comment on my thinking before I make my final decision in this case. My provisional decision In my provisional decision, I said: “I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. I’ll deal with the issues, as I see them, in turn below. If either party thinks I’m missing anything or that my assumptions are incorrect, they can provide further information, evidence or argument in response to this provisional decision.

-- 2 of 16 --

Underinsurance Aviva are in essence alleging that 4 made a misrepresentation when they bought or renewed the policy, in that they under-estimated the rebuild cost for the hall (so obtaining the policy at a cheaper premium). I’m aware that the policy contains clauses about settling claims based on “average”. However, in short, there is legislation (the Insurance Act 2015) which defines misrepresentation in commercial insurance – and dictates the remedies available to the insurer if a misrepresentation is made. I am surprised that in this case, Aviva have not followed what they must know to be our approach. That’s the approach set out very clearly by our investigator. In brief, the Insurance Act says that where a misrepresentation is made, the insurer may settle any claim based on the terms they would have offered had the misrepresentation not been made, including the premium that would have been offered. Where the insurer would have offered different terms (a higher premium), they may settle any claim proportionally. But the degree of underinsurance should be calculated by comparing the premium that ought to have been paid with the premium that was in fact paid. And not by comparing the declared rebuild cost to the actual rebuild cost. It is permissible to “contract out” of these terms (as set in the Act) but only if that is - and the alternative terms are - made explicitly clear to the prospective policyholder beforehand. And that’s not something Aviva did in this case. So, I agree with our investigator that if Aviva apply a proportional settlement here, on the basis that 4 were underinsured, they should do so by comparing the premium paid to the premium that ought to have been paid - and settling the claim in that proportion. Aviva have been asked several times to tell us what the premium would have been had they been given a more accurate estimate of the rebuild cost for the hall. They haven’t yet done so. In any case, however, I don’t believe I need to get into the mathematics around the calculation of the proportional settlement because I don’t think Aviva have established that 4 did in fact make a misrepresentation (in the terms of the Insurance Act 2015) when they declared the rebuild cost. The Insurance Act 2015 distinguishes between matters of fact (e.g. how many claims have you made in the last five years?) and matters of opinion. And a rebuild cost is, in effect, a matter of opinion. It can only ever be an estimate – and if you asked five different highly qualified property surveyors to estimate the rebuild cost of a particular building, you’d undoubtedly get five different answers. That’s particularly true with buildings which are not of a standard type of build. According to the Act, a prospective policyholder is obliged to act in good faith when providing their estimates as to matters of opinion. And remedies for misrepresentation are only available to the insurer where that is not the case – where, in other words, the customer has not acted in good faith.

-- 3 of 16 --

4 declared a rebuild cost in this case of around £112,000. Aviva’s loss adjuster calculated the rebuild cost to be above £200,000. That seems like a large disparity. And if the loss adjuster’s estimate were thorough - and palpably more accurate - we might conclude that 4 had been at the very least somewhat careless is declaring a rebuild cost so far off the mark. 4 can’t tell us how they came to the rebuild cost they declared. That’s somewhat understandable, given that they are a small charity, with a changing cast of office holders etc. Although they might wish to review their record-keeping, in light of this experience. However, Aviva tell us their rebuild cost was derived from what was essentially a desk exercise, whereby they measured the property and fed the measurements into a standard calculator. That calculator makes assumptions about the rebuild costs of different types of property (housing versus commercial, for example). However, when using those calculators, there are warnings that certain assumptions are made, based on the often quite broad categories used. 4’s hall is a unique building, or very close to it – both parties will understand what I mean by that without me having to go into detail. Using a standardised calculator to derive a rebuild cost is unlikely to provide a very accurate estimate of the true rebuild cost. A bespoke and detailed assessment by a qualified professional property surveyor might give a better estimate, although that would still be a matter of opinion - and in any case, it’s not something Aviva tell us they did in this case. So, given the evidence and information available, I don’t think on balance that Aviva can rely on their rebuild cost estimate as being unquestionably accurate. Much less can they reasonably assume that 4’s estimate of the rebuild cost was so far from reality that they can conclude 4 didn’t act in good faith. So, I’m minded to conclude – unless I get compelling evidence or argument in response to this provisional decision – that Aviva can’t fairly apply a proportional settlement for this claim on the basis that 4 were underinsured. Mitigation work It seems that all parties (and the experts they’ve employed) agree that the hall suffered an episode of root-induced clay shrinkage subsidence. In such cases, it is not uncommon for the problem to be satisfactorily addressed by removal of the offending vegetation. And, as a first phase, we’d usually expect to see tree (or shrub) removal followed by a period of monitoring to establish whether the building in question was now stable. That’s precisely what happened here (I’ll come to the question of how quickly – or not – that happened in the section on delays below). Aviva obtained a report from an arborist, the trees within influencing distance of the hall appear to have been removed (though see my further comments below) and the question then became whether that action stabilised the hall. 4 think it didn’t. And they’ve presented a quotation from a builder – at over £80,000 –

-- 4 of 16 --

for the rebuilding of parts of the hall, with adequate foundations. I don’t agree with 4 about that. I’ll explain why. Aviva have monitored for movement of the hall for different periods since the claim was made. I think they were too quick to conclude in 2022 that the movement had stopped – with monitoring only continuing for a few months after the trees were felled before Aviva made their cash settlement offer. However, that monitoring – and a later period of level monitoring - showed what Aviva’s experts believed to be minimal or no movement in the building. Very helpfully, in this case, 4 have commissioned a series of reports from an independent surveyor (who I’ll refer to as A) – in March 2023, November 2024 (a few months before 4 brought their complaint to us) and November 2025. The latter report was produced after this complaint was answered by Aviva and subsequently brought to us. So, I’m sure 4 will understand that I can’t, in this decision, criticise (or make findings against) Aviva based on that report, given that they hadn’t seen it when they answered 4’s complaint. However, that report is illuminating, in terms of helping me to understand what’s been happening with the building, so I will refer to its findings here. In their first report (March 2023), A agreed that there had been clay shrinkage subsidence. They said the movement had stopped, but recommended monitoring for 12 months to check that the remaining vegetation wasn’t an issue and that the hall really had stabilised. A also noted that other contributory factors ought not to be ignored – including the fact that the drainage downpipes from the roof appeared to discharge rainfall direct into the soil at the foot of the building. They recommended that these downpipes should be connected to a functioning underground drainage system. In November 2024, A again noted no on-going movement at the property. They said the cracks internally and externally were the same size as when they’d reported in March 2023 (18 months previously). And they said that level monitoring was being undertaken by Aviva, which might (or might not) confirm the notion that the building was no longer moving. They also noted that 4 had carried out work to connect the downpipes to underground drains on the left-hand side of the building (which appears to be where localised flooding had occurred on occasion previously). But they noted the downpipes at the rear left and on the right side of the building were still discharging directly into the soil (seemingly, on the right hand side, via a tarmac pathway next to the building, which may be affording some protection to the foot of the building). And they again recommended that this should be sorted. In November 2025, A noted that most of the damage to the building was again as reported in March 2023 and November 2024 – with no increase in the size of the cracks, no additional cracking and seemingly no movement. A also reviewed the level monitoring data collected by Aviva, which confirmed their assessment. The exception was at the left rear of the building, where there was some movement.

-- 5 of 16 --

Aviva didn’t think the change in levels was significant. A thought it might be more telling. And they noted again that the downpipe to the left rear of the building was still discharging direct into the soil and had not been connected to an underground drain to take the water away from the foot of the building. Their conclusion was that the (arguably slight) on-going movement noted at the rear of the building was likely due to saturation of the clay soil in that area, as a result of the downpipe discharging rainwater direct into the soil. I’m sure 4 will understand why I can’t reasonably ask Aviva to cover that on-going damage, or to undertake further mitigation works to address that particular problem. I say that because I’m aware 4 accepted that connecting the other downpipes to the underground drain wasn’t work that was covered by their policy. And ultimately, that was because the downpipes discharging direct into the soil is a clear failure in the design of the building - and not an insured event or peril. So, in summary, Aviva’s experts and A (commissioned by 4) agree that the building is largely now stable. With the only exception being in a localised area at the rear of the building where the downpipe is very likely to blame. I note that A had recommended action to rectify that problem as far back as March 2023. The fundamental conclusion of A’s report, in November 2025, was that the building would very likely be entirely stable once the remaining downpipes had been connected to the underground drains. They also concluded that meant the building’s superstructure could be repaired, in much the way Aviva had suggested. And any marginal seasonal movement in future, due to extreme weather and/or the clay soil, could be addressed by decorative repairs only. I’m satisfied then that the radical repairs, including work on the foundations, suggested by 4 (at a cost of over £80,000) are not currently necessary or justified. If there is significant movement in the building at any point in the future, then I’d expect Aviva would consider any further claim made by 4. But it’s not for Aviva to future-proof the property against any and all possible future subsidence (or other issues) in response to the current claim. Before I finish this section of my decision, I’m going to add two provisos to the above. First, in their November 2025 report, A have questioned whether all of the trees recommended for felling by the arborist back in 2020 have in fact been removed. There appears to be some confusion here about the labelling of the trees. A refer to T3 as a tree the arborist said should be felled. In fact, he said T3 should be maintained at its current size by periodic pruning (A may in fact have meant to refer to TG3?). But A also suggest that T1 – which the arborist definitely said should be felled – is still there (it’s possible it may have re-grown from the stump?). I’m aware that Aviva didn’t commission the felling of the trees themselves. However, I’d recommend that Aviva now attend the site again (and if necessary, commission a further arborist’s report) to check that all the work recommended in 2020 has been carried out.

-- 6 of 16 --

They should also at the same time check whether the trees identified in 2020 as potential future risks to the hall are now (around six years later) in fact likely to cause a problem presently or in the near future. And whether any action needs to be taken in respect of those trees. I’d be very surprised if Aviva objected to this suggestion in their response to this provisional decision, given that they themselves suggested it to 4 in an email they sent in April 2024 (although I accept that their proposal was rather overtaken by events). Second, A – in their various reports – have made recommendations about how the superstructure repairs should be carried out. For example, they’ve suggested that stitching to some of the cracks may be necessary. Their arguments around the need for those repairs are clear and very persuasive. It’s not clear to me whether Aviva’s original scope of works (on which their cash settlement offer was based) included anything other than simply filling the cracks and re-decorating. However, I’m minded to say in my final decision (unless I am persuaded otherwise) that Aviva should now re-assess the repairs to the property – taking into account A’s suggestions for the type of repair that is necessary. I understand Aviva paid the proposed cash settlement to 4 in or around May 2022. If their re- assessment (as suggested above) arrives at a total cost for the repairs above the sum they previously paid (at today’s prices and at a price available to 4 on the open market), then Aviva should top up the previous payment to reflect those increased costs. I should be clear, I would not expect Aviva to carry out that assessment until 4 have rectified the issue with the downpipes. And I wouldn’t expect Aviva to cover any additional costs resulting from the damage at the rear of the building becoming worse after 2023 (when A first recommended that 4 fix the issue with the downpipes). Aviva, in other words, should pay the current market price of fixing the cracks in that particular area of the building, as they appeared in 2023 (before any further damage and widening of the cracks caused by the saturation of the soil in that area since 2023). The roof support 4 think Aviva should cover the cost of repairs to steel roof trusses which have become severely distorted and may present a future risk to the safety and integrity of the hall. I’ll be brief on this particular point. Aviva said the distortion was due to faulty design (the trusses have no lateral support and they’re supported underneath by what appears to be a fairly substantial pyramid of mortar). They say the damage then isn’t caused by subsidence – or by anything else that’s covered under the policy. A agree on this point. Their reports conclude that if the distortion was caused by subsidence, the degree of movement necessary to do that would have also resulted in significant cracking of the walls around and between the trusses.

-- 7 of 16 --

All the expert evidence suggests then that the damage to the trusses is nothing to do with the subsidence. And I’m minded therefore to conclude that Aviva aren’t obliged to pay for the necessary repairs. The floor Again, I’ll be brief of this point. And again, I’m relying primarily on A’s reports (commissioned by 4, not by Aviva). In short, it appears the floor to the building is now tilting towards the rear of the building. This is mentioned for the first time in by A in their most recent report (November 2025). Aviva say they were not aware of the issue until August 2024. Given the area in which the floor appears to be tilting, and the point in time at which the damage appears to have become evident, it seems likely that the damage is related to the recent downward movement at the rear of the building. That, according to A, has most likely been caused by the discharge of rainwater from the downpipe at the rear left of the building. I won’t repeat again the arguments set out above about the responsibility for that on- going downward movement in that part of the building. Suffice to say that the damage appears very likely to have occurred since March 2023 (A’s first report) and as a result of 4’s failure to fully mitigate the risks identified by A in March 2023 (and again in November 2024). I’m sure 4 will understand why I can’t fairly conclude then that Aviva should cover the costs of any repairs to damage to the floor which has occurred since they (4) were put on notice that there was a likely on-going risk presented by the remaining unconnected downpipes. I also note that A, in November 2025, didn’t suggest that any repairs to the floor were necessary. Their conclusion being that once the issue with the downpipe was fixed, the relatively minor movement should cease – and superstructure repairs to the cracks etc. would suffice to restore the building to a decent and functional condition. Delays and poor service As our investigator has pointed out, subsidence claims can be difficult, complex and long. In this case, there were complications due to the fact that the trees belonged to a third party who was, at first, unwilling to cooperate. The claim was also complicated because it required expertise and detailed assessment to determine which damage at the property was related to subsidence and which was not. In short, this is a building with multiple issues, not all related to the episode(s) of subsidence. I’d also mention that identifying the cause or causes or subsidence sometimes isn’t easy. And once a working hypothesis is formed - and mitigation taken – often lengthy monitoring is required to ensure that the problem has in fact been resolved. That said, we are now six and a half years out from the original claim being made. And it’s not immediately apparent to me why the arborist wasn’t on site until almost a year after the loss adjuster had identified the third party trees as the likely culprit in this case.

-- 8 of 16 --

It’s also not clear why monitoring commenced only around a year after that - but was stopped soon after the trees were felled. After the cash settlement was offered, 4 have to take some responsibility for the delays, given that they appeared not to respond to the offer. Although Aviva subsequently admitted they’d missed one email from 4, which added further delay. The impasse that was then reached is again partly the responsibility of both parties. 4 eventually presented an estimate at £80,000 – which, for the reasons set out above, is not and never was realistic. Aviva – mistakenly in my view (again, as explained above) insisted on applying a proportional settlement for underinsurance. To summarise, although they aren’t solely responsible (contributing factors outside Aviva’s control include the complexity of the claim and 4’s own actions), Aviva’s errors and omissions here have added to the delay and, at times, confusion about the progress of the claim. Our investigator suggested they pay £250 in compensation to 4. Bearing in mind that 4 are a body corporate – and so cannot, by definition, suffer distress – I agree that amount is fair and reasonable compensation for the inconvenience 4 have been caused by Aviva’s errors or omissions. I am though minded to add one further point here. It’s very apparent to me, having tried to get to grips with the nature of this claim and the subsequent complaint, that A have played a significant part in clarifying what parts of the claim should be covered and how things should now be progressed. I’m satisfied than that 4 were justified in commissioning the reports from A - and that the true position on the claim has only become clear due to A’s involvement. A have, in effect, been doing much of the heavy lifting on this case which might otherwise have had to be done by the loss adjuster and/or (more likely) experts commissioned (and paid) by them, or by Aviva directly. It’s not entirely clear to me, and no doubt either party (or both) will correct me if I’ve misunderstood, but it appears that 4 have paid for the three reports produced by A. I’m minded to say that Aviva should reimburse 4 in full for those costs, if they haven’t already done so. Summary and proposed outcome In short, I’m minded as things stand to uphold 4’s complaint in-part. And to come to the following conclusions, based on the reasoning set out above: (a) Aviva should not apply any proportional reduction to the claim payment in this case on the basis of underinsurance (they will need to pay 4 the difference on any amounts already paid); (b) Aviva can assume the property is stable (except in the localised area where movement is caused by the unconnected downpipes) and need not carry out any further mitigation work; but (c) Aviva should commission a further arborist’s report to ensure that all the previously recommended work has been carried out - and to determine whether any further actions are necessary in respect of the trees identified in

-- 9 of 16 --

2020 as a potential future risk; and (d) once 4 have addressed the issues with the remaining unconnected downpipes, Aviva should re-assess the damage to the hall and the necessary repairs, taking into account A’s suggested methods of repair, and then re- calculate the cost of the repairs (at today’s prices, and at a price available to 4) – and pay 4 the difference between that cost and the amount already paid in 2023 (as set out above); (e) Aviva are not liable to cover the costs for repair to the damaged roof trusses; (f) Aviva are not liable to cover any costs for putting right the tilting of the floor of the hall (should that prove necessary); (g) Aviva should pay 4 £250 in compensation for the inconvenience caused by their errors or omissions in the handling of this claim; and (h) Aviva should reimburse 4 for the costs of commissioning the three reports from A, on receipt of copies of the relevant invoices.” The responses to my provisional decision Aviva’s response Aviva responded to my provisional decision with some very brief comments. They said they would agree to pay the recommended compensation. They were also happy to commission a further arborist report. And to re-assess the damage to the hall - once any actions recommended by the arborist were completed and 4 had carried out the necessary further work to the downpipes / drainage recommended by A. Aviva made no comment about my views on the alleged underinsurance. I assume that means they are now happy to pay the claim - without any reduction for underinsurance - once a settlement figure is agreed. Nor did they comment on my proposal that they cover the costs incurred by 4 in commissioning A’s three reports. Again, I’ll assume they agree since they’ve raised no objection. I’m also assuming Aviva believe the property is now stable (but for the minor movement to the rear of the property which A think may be caused by the downpipes / drainage issue). And that they’re happy to agree they need not cover the cost of any repairs to the roof trusses or the hall floor. 4’s response 4 responded to my provisional decision in much more detail. They’ll appreciate that I’m not going to repeat here every point they made, but I hope the summary I provide will do justice to their comments. And I should stress that I am very grateful to 4 for clarifying much that was unclear previously and for stating their current views so clearly too. I’ll start with the issues on which I think we’ve now reached something close to a consensus. 4 agree that the movement at the property now appears to have largely ceased. In fact, they

-- 10 of 16 --

say their view is that it’s ceased altogether. And so, they agree now that there is no need for underpinning the property (as per their original quote for over £80,000). 4 also now agree that they will not include in their claim any costs for repairs to the roof trusses or to the floor of the hall. 4 also agree with me that Aviva should pay for A’s reports. However, they query why the same should not apply to their previous arboriculture costs (which they suggest were around £500). 4 also believe the compensation recommended in my provisional decision is too low. They accept that a body corporate can’t suffer distress or pain, but they say the prolonged claim has affected the individuals involved, many of whom have been worried that they might not be able to repair or maintain their facility. And they ask whether £250 is enough to account for inconvenience over the full six years of the claim. 4 have also made clear that Aviva did not pay any settlement sum at all in 2023, contrary to the assumption I made in my provisional decision. So, they’d expect any future settlement to cover all of their insured losses. They also said it was unclear in my provisional decision whether I was asking Aviva to settle the claim without any adjustment at all for underinsurance, or whether I’d concluded they ought to pay a proportional settlement based on a comparison of the premium they paid against the premium Aviva say they ought to have paid. 4 also take the view that the downpipes at the rear left and on the right of the building are likely not causing any movement at present. They say the downpipes at the rear of the building only take rain water from the extension to the hall (not the main roof). On the right, they point out that there is a French drain alongside the edge of the concrete plinth on which the hall is built. And their view is that this takes rainwater away from the foot of the building. At the rear, they point out that the downpipes in fact discharge water into a further pipe, taking the rainwater away from the foot of the building. 4 say this means they ought not to be required to carry out any further mitigation work on the downpipes before the claim is settled. And that the building isn’t being affected by these issues, so when Aviva come to cost the super-structure repairs (to the cracking etc.), there will be no need or purpose in them trying to assess what it would have cost in 2023 as compared to what it will cost now (the costs will effectively be the same). On that point, 4 say they’ve obtained quotes for the repairs, as specified by A, for just over £20,000. I think the implication is that 4 want Aviva to pay those costs now, without waiting for any further mitigation work on the downpipes to be completed. 4 argue that the same applies to the further arborist report I proposed in my provisional decision. They’ve clarified that in fact they were unable to persuade the third party to get rid of one of the trees (T1) the original arborist said ought to be removed. They say that nonetheless, the movement has stopped, so there’s no point now arranging a further report when the outcome will be the same – i.e. that the third party will refuse to remove the tree in question (which in any case is not causing any further movement in the building).

-- 11 of 16 --

What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. The parties have either agreed with – or at the very least not objected to – several of the outcomes and recommendations in my provisional decision. I therefore have no reason to change my mind about the following. One – Aviva cannot apply a proportional settlement in this case based on underinsurance. To be completely clear – because 4 have questioned this – I mean they cannot apply any proportional reduction in the settlement. They can’t apply the reduction they proposed, based on a comparison of declared rebuild cost versus true rebuild cost. And they can’t apply any proportionate reduction based on a comparison of the premium paid versus the premium that they say ought to have been paid. Two – Aviva are not required to cover damage to the roof trusses. Three – Aviva are not required to cover damage to the floor. Four – Aviva will be reimbursing 4 for the costs incurred in commissioning A’s three reports (on receipt of relevant invoices or other proof of payment). That leaves issues (raised by 4 in response to my provisional decision) about: the compensation; the stability (or not) of the property; whether a further arborist report is needed; and how and when Aviva re-assess the damage – and cost the repairs. I’ll deal with those issues, in the same order, below. Compensation I understand 4’s comments about the distress caused to members and officers of their organisation. As I’ve explained though, that’s not something I can compensate them for. I’m grateful to 4 for recognising that a body corporate (the insured party in this case) by definition can’t experience distress. I also appreciate that the claim has been on-going for a considerable time now. As I explained in my provisional decision though, subsidence claims such as this one will take time to fully resolve. I have to look at the avoidable delays that were primarily Aviva’s fault. And I bear in mind here that 4 themselves are not entirely without fault for some of the delays. Bearing all of that in mind, I’m not going to change the position on compensation set out in my provisional decision. I remain satisfied on balance that £250 is fair and reasonable compensation for the inconvenience caused by Aviva’s errors in this case. Stability of the property It’s agreed that the hall is now stable in most places. As I said in my provisional decision, I am guided in these matters by the experts. A say there is still minor movement to the rear of the property. And A say that may very likely be due to the drainage arrangements at the rear of the hall. I understand 4’s position on this – and I understand the photographs they’ve sent of the downpipes in question. But I still have the expert (A) – commissioned by 4, not Aviva –

-- 12 of 16 --

telling me that the drainage issue needs to be sorted. Having reviewed A’s report, I can see that they mention the drainage on the right of the property, but don’t make any recommendations – presumably on the basis that the French drain is doing enough as things stand to take rainwater away from the foot of the building. However, A are convinced – for the very persuasive reasons set out in their report (including the fact that the monitoring data showed the on-going minor movement during the wetter months) - that the current drainage arrangements at the left rear corner of the hall are, and will remain, a problem. 4 do admit, in their response to my provisional decision, that through an oversight they omitted the left rear corner downpipe from the work they had carried out on the other downpipes on that side of the building. On balance then, I’m going to maintain the position I set out in my provisional decision. 4 will need to address that issue. And Aviva are entitled to wait until it is (properly) addressed before they re-assess the damage to the building and cost the repairs (see also below). Further arborist report I was surprised to see 4’s comments about the trees close to the hall. I had the impression from the evidence we had on file – at least until we were provided with A’s third report (after our investigator had issued her view on the case) – that the necessary mitigation work had been fully carried out. The truth of the matter appears to be that we still have a 12 metre high (in 2020) Sycamore tree situated less than 4 metres from the rear of the property. Sycamores are large trees, with a relatively high demand for water. According to expert sources (including the RHS), you might expect a Sycamore of that size to have roots spreading underground to a distance roughly equivalent to the height of tree. All of the experts involved in this case have concluded that the hall has been subject to root- induced clay shrinkage subsidence - which was, they also agree, the cause of much of the damage in the hall. So, as A pointed out in their most recent report, it is absolutely necessary that the mitigation works specified by the arborist in 2020 are fully carried out (or other means of preventing the potential damage are implemented). If those mitigation works are not carried out, it’s very likely that subsidence damage will occur again at the property – whether or not it appears to have been close to stable now for several years. Clay shrinkage subsidence is often cyclical and dependent on the annual and seasonal weather patterns (particularly rainfall – or the lack of it). So, I don’t agree with 4 that there’s now no need for a further arborist report - and no need to make another attempt to convince the neighbour to remove the tree. We are in any case now almost six years on from the original arborist’s report – and that report identified other trees in the area which might be a problem in future. In the interests of all parties, I therefore remain of the view that Aviva should commission a further arborist report, with a view to finding out exactly what further mitigation work is necessary to prevent very likely on-going subsidence issues at the property.

-- 13 of 16 --

I should also add something here about how this might play out in practice after the recommended arborist’s report. It would appear that last time around, Aviva’s loss adjuster left 4 to get on with the negotiations with the neighbour about the offending trees. That may have been agreed between them at the time – it’s not clear from the information we have what exactly happened at that point. I should also say that whilst 4 may have been remiss in not pursuing the removal of T1 and/or emphasising to Aviva that it hadn’t been removed, it’s equally surprising that Aviva’s loss adjuster appears to have been unaware that T1 hadn’t been removed. If the new arborist’s report confirms (as is likely) that further mitigation work is still necessary or advisable (I suspect that at the very least T1 will remain a problem), then it is Aviva’s responsibility to ensure that the mitigation work takes place (or an alternative to it is found, although alternatives would likely be hugely expensive). Put bluntly, the neighbour may be willing to dig their heels in when 4 make a friendly request. They may be less likely to do so if they have a major insurer’s legal department formally warning them that the insurer will be looking to recover any future repair costs from them if the tree causes further damage. I give this purely as an example, and it may not be the first tactic Aviva use in negotiations with the neighbour. I think Aviva would be justified in assuming – at least in the first instance – that any future costs of tree work would be met by the owner of the tree in question. As for 4’s point about the £500 or so arboriculture costs last time around – which they bore – this was not any part of the complaint made to us by 4 initially. I suspect 4 haven’t raised that complaint point with Aviva either. So, I can’t consider it as part of this decision (the rules which govern our service say we can only look into matters the business has already had a chance to resolve with their customer). If 4 wish to request that Aviva cover that payment (and then possibly seeking to recover the cost from the neighbour) I’m sure Aviva will consider that request. If 4 aren’t happy with Aviva’s response, they can make a new complaint addressing that specific point. Re-assessment and costing of repairs It should probably be clear by now that I’m not going to change my mind about the preferred order of events in this case. For the reasons I’ve set out above, I think it would be counterproductive for all concerned if Aviva now moved to re-assess the damage and cost the repairs (and then cash settle the claim or carry out the repairs) unless and until it’s clear that all causes of movement in the building have been addressed. I am still going to require Aviva to re-assess the damage and cost the repairs (in line with the means of repair set out in A’s third report). But I also still take the view that they aren’t obliged to do that until: (a) 4 satisfactorily resolve the issues with the downpipe at the rear left of the building identified by A in their latest report; and (b) any further mitigation work to the trees is completed (as I say, the responsibility to ensure this happens is with Aviva).

-- 14 of 16 --

4 have objected to my saying, in my provisional decision, that Aviva should cost the repairs to the damage as it presented itself in 2023. I’m not persuaded to change that view – 4’s main argument is that the cracks aren’t significantly worse now. If that is the case, then the repairs required will be the same (or very similar). As I said in my provisional decision though, any cash settlement offer for those repairs should be at today’s prices and at a price available to 4 (rather than the price to Aviva through their own network of contractors). 4 say they have quotes for the necessary work (as per A’s recommendations). They should provide those quotes to Aviva. It will then be for Aviva to decide whether they are content with the scope and costs contained in those quotes or whether they’d prefer to carry out their own assessment. Putting things right As per the reasoning above, the outcome of this case remains largely – and in all significant respects - as set out in my provisional decision. I have made some small alterations – mainly to do with the sequence of future events – based on the new information provided by 4 in response to my provisional decision. I’ve set out my final decision in the section below. I’m not going to repeat the outcomes where I’ve found that Aviva needn’t do anything more. I’ve also changed the outcome (below) to reflect the fact that Aviva did not in fact make any settlement payment to 4 in 2023. And to recognise the fact that 4 have obtained quotes for the relevant repair work. My final decision For the reasons set out above and in my provisional decision, I uphold 4’s complaint in part. Aviva Insurance Limited must: • settle this claim without applying any proportional reduction for underinsurance; • commission a further arborist’s report to identify any and all previously recommended work which remains to be carried out - and to determine whether any further actions are necessary in respect of the trees identified in 2020 as a potential future risk; • once 4 have addressed the issues with the remaining unconnected downpipe (at the rear left of the building) and any further required mitigation work has been carried out with regard to the nearby trees - re-assess the damage to the hall and scope the necessary repairs, taking into account A’s suggested methods of repair, and then re-calculate the cost of the repairs - at today’s prices, and at a price available to 4 (or accept the costs set out in the quotes obtained by 4); • pay 4 £250 in compensation for the inconvenience caused by their errors and/or omissions in the handling of this claim; and • reimburse 4 for the costs of commissioning the three reports from A (on receipt of copies of the relevant invoices and/or other suitable proof of payment). Under the rules of the Financial Ombudsman Service, I’m required to ask 4 to accept or

-- 15 of 16 --

reject my decision before 23 April 2026. Neil Marshall Ombudsman

-- 16 of 16 --