Law Commission consultation on compulsory purchase

We provisionally propose that any newly consolidated compulsory purchase legislation should positively state the entitlement to, and explain the assessment of compensation for, disturbance. It should largely codify the existing body of case law:

1. that there must be a causal connection between the compulsory acquisition and the loss in question;
2. that the loss must not be too remote; and
3. that the loss must have been reasonably incurred.

Do consultees agree?

Rule (6) of section 5 of the Land Compensation Act 1961 currently refers to compensation for “disturbance or any other matter not directly based on the value of land”. We provisionally propose that the terminology used for this head of compensation is replaced and modernised with the general term “consequential loss”. We think that this would make clear that compensation under this head encompasses losses on the part of owners whether or not they are in occupation of the land.

Do consultees agree?

We invite consultees’ views as to whether there is an advantage to retaining section 10A of the Land Compensation Act 1961 (expenses of owners not in occupation) in the interests of certainty. (For clarity, this would be without prejudice to the general rule that consequential losses of landowners not in occupation are allowable under the second limb of rule (6) of section 5 of the 1961 Act.)

We invite consultees’ views on the operation of section 10A of the Land Compensation Act 1961 (expenses of owners not in occupation) in practice. In particular, we invite views on the one-year time limit under the provision.

We provisionally propose that consequential losses incurred after the notice of the making of a compulsory purchase order should be recoverable. Exceptionally, earlier losses may be recovered where there is a prior agreement with the acquiring authority or where the Upper Tribunal (Lands Chamber) has determined that, having regard to the special circumstances of the case, it would be unfair to refuse compensation.

Do consultees agree?

We invite consultees’ views as to whether any codification of disturbance rules should make specific provision to include costs reasonably incurred in replacing buildings, plant or other installations needed for a business, if attributable to the acquisition and not adequately reflected in other heads of compensation.