The city has a new subsidence problem and insurers are likely to pick up the bill. Helene Dancer and Brian Hanney investigate

Satellite pictures released last week show the nation's capital has a subsidence problem which has embroiled insurers, lawyers, contractors and architects in a bitter dispute.

The pictures showed a section of the Jubilee Line extension tunnel, completed in 1998, undermining an area that runs principally through Westminster and the Houses of Parliament.

Ahead of possible claims, London Underground says it is not responsible for this subsidence. But some insurers and lawyers argue that the multi-million pound liability will fall on the contractors and designers responsible for the Jubilee Line extension.

A London Underground spokeswoman says: "We were very careful about what we did and used every device we could to stop movement. We worked according to all appropriate engineering methods.

"Tunnelling can cause some ground movement, but it does not necessarily lead to buildings above being damaged. Nevertheless, we have a responsibility, which we take very seriously, to safeguard structures beneath which excavation is taking place.

"We have clear procedures for predicting ground movement, managing it, assessing any potential building damage and putting in mitigating measures to control such damage."

The spokeswoman suggests the reason for the subsidence is due to London being founded on clay soil - the London clay formation - which is an unstable soil type.

"It is nothing new, quite frankly," she says. "This condition was apparent well before the Jubilee Line extension was thought about." She says ground movement can be measured so contractors are more aware of the dangers.

Aon's Robin Keeling who brokered insurance on the Jubilee Line extension, supports London Underground's position, saying the satellite pictures do not appear to be connected with the Jubilee Line at all.

However, Nigel Press, chairman of NPA Satellite, UK distributors of data from the satellites says the two lines of subsidence, shown in the photographs, "directly coincide with two well known tunnels".

"That's pretty clear," he says. "Is the tunnelling a direct result? I don't know, but the coincidence is remarkable."

Hefty claims
London Underground admits that since the extension was opened, running from Green Park to the Docklands, "a small number of property owners have made claims for alleged damage".

"Such claims tend to be insured and control of them is in the hands of our insurers' appointed loss adjusters."

The fact remains, however, that insurers will still have to pay out potentially hefty claims from businesses and householders in the affected area, which is one of London's wealthiest residential and commercial areas. The stage seems to be set for a great liability battle.

According to Keith Gaston of law firm GastonWhybrew, there are both small and potentially massive individual losses. "It is plainly serious, given the nature of property in this area," he says. "Quite literally, the sky is the limit."

Building standards
Westminster City Council says most of the line in the borough runs under parks and the Thames. But a short section of the line, under Great George Street, and the north side of Parliament Square, is close to buildings.

Gaston continues: "It is inevitable that nearby structures will vary between those which are extremely robust, to those which do not meet modern building standards and are therefore more vulnerable."

"With a big project, developers will have thought more about potential situations. It is up to the developer to take out third party public liability insurance," he says.

Jenny Chapman of Norwich Union expands on this. Insurers would pay out in the first instance and then claim from the contractors or architects who are deemed responsible.

Probable cause
She says that in a situation like this there can be legally more than one cause and in this particular case, there is a lot of money at stake.

Much research needs to be done to ascertain the root of the problem and to dispel any conjecture. Paul Stanley of InFront Solutions says in a typical subsidence claim, the insurers would send an engineer out and conduct a proper investigation. All possible causes would be eliminated, until there is a probable cause. Soil samples would then be taken and analysed at a laboratory and the results would then point towards the cause.

"The usual cause of subsidence on clay is trees," says Stanley.

He also states that in his experience, he has yet to see a subsidence claim related to the Jubilee Line.

Westminster Council says it has not been notified of any significant problems either, "but will consider any evidence put forward as part of its responsibility for building safety".