Compensation and Other Matters

Specialist compulsory purchase solicitors advising property, land and business owners on statutory compensation, disturbance losses and alternative remedies under CPO and DCO schemes.

A Claimant with a qualifying statutory blight claim, whether arising following a CPO or DCO, has a right to seek compensation in respect of the compulsory acquisition of their property. The compensation available is guided by a collection of principles commonly referred to as the “Compensation Code”.

Our role is to ensure that the legal principles guiding the Compensation Code are followed and, thereafter, that our client recovers the maximum amount of compensation to which they are entitled by law.

Other remedies

If a person or business does not have a, or will not qualify for, a statutory blight claim there may be other remedies to them. For example to request changes to the scheme  or potentially to seek a discretionary purchase and/or sale under shadow of compulsory purchase powers.

We assist Claimants by providing proactive advice seeking to find a legal solution but, in all case, provide advice that ensures that our client’s energies and resources are used in the most efficient and effective way possible.

The Compensation Code

In acquiring land compulsorily the general principle of the Code is equivalence. Namely the legal owner or person with the statutory claim(s) should be in no better or no worse position because of the scheme or compulsory acquisition of their land.  

The Compensation Code is not a single document but a collective term used for Acts of Parliament broadly termed “Land Compensation Act” and “Compulsory Purchase Act” dating from 1961, 1965, 1973, 1991 and 2004.

There are five main categories of compensation payable:

1. The open market value of the land/property taken (in a “no scheme world”);
2. Depreciation in the value of land retained where only part is compulsorily acquired;
3. Losses as a require of being dispossessed from the property that is compulsorily acquired (referred to as “disturbance losses” – see further below);
4. Statutory Loss payment (vary but, for example, a 10% for Home Loss payment to qualifying owner occupiers of residential property compulsorily acquired – being 10% of the open market value of that dwelling); and
5. Professional costs incurred in preparing and finalising a statutory compensation claim, to include conveyancing costs.

The exercise of CPO powers is a Human Rights interference (i.e. an interference with a person’s possessions but also home/family life) but, subject to procedural and substantive safeguards, an interference that is deemed as lawful where fair financial compensation is paid. In other words, where a CPO and/or DCO is lawfully made, i.e. not overturned by legal challenge an affected person’s legal rights convert into a package of financial compensation.

We often see Claimants being offered “all in” compensation packages with a view to a “quick and easy” resolution to the matter. But in many cases it is unclear as to whether that “deal” will satisfy legal rules regarding compensation, to include identifying all relevant heads of claim but also understanding appropriate value (or quantum) of those items.

As above, our role is to ensure that the legal principles are followed and that our client recovers the maximum amount of compensation permissible by law.

Owing to its importance to CPOs and DCOs, the government provides guidance on compulsory purchase and compensation, which can be found here.

Disturbance losses

When property is compulsorily acquired the owner/person with an interest in that property will not typically be compensated by payment of market value alone. There may be many other costs or losses the owner/occupier will incur and, subject to legal rules of causation, remoteness and a duty to mitigate, which can potentially be recovered (paid for) by the acquiring authority.

Examples of disturbance losses can include:

• For residential property owners – removal costs, storage costs, temporary accommodation, costs of a replacement property (i.e. conveyancing costs, Stamp Duty Land Tax etc);
• For commercial business owners – trade losses, loss of profits, loss of goodwill, adaptation of premises; and
• For agricultural owners – loss of profits, crop loss, provision of alternative grazing land, loss on forced sale of livestock, equipment, produce and feed.

Separate to the above, professional costs, such as legal fees, are typically recoverable subject to statutory rules but also those costs being in connection with resolving a statutory compensation claim.

Costs of personal time

We are often asked by Claimants (or would-be Claimants) whether:

1. they can recover their personal time in dealing with a statutory claim
2. they can recover their costs of objecting to the CPO or DCO scheme

The answer to these are:

1. “it depends” - as lawyers we can provide advice regarding this (n.b. professional costs should be recoverable/compensatable as above).
2. “no” – so the question becomes whether the costs of objecting (or make representations) yield value to the Claimant, whether by securing alterations or amendments to the given scheme or, in come cases, identifying an issue so fundamental so to stop or delay the scheme in question.

The following are examples of where we can assist in the context of CPO or DCO matters:

• Statutory Claimants - blight claims and valuation disputes
• Statutory and Non-Statutory Claimants – discretionary purchase applications
• Purchase of property under threat of compulsory purchase powers (CPO or DCO)
• Residential Property Owners affected by CPO/DCO schemes – initial fixed fee advice
• Businesses and Farming Enterprises affected by CPO/DCO schemes – initial fixed fee advice
• Representations (objections) to CPO/DCO schemes
• Town/Parish Councils and Action Groups
• Professional Advisers – legal support for CPO/DCO matters

How we can help

Speak to our specialist CPO and DCO solicitors for clear and helpful advice.