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AN ARTICLE by Peter Scrafton FIRRV, FCIArb, MRSA(Hon) Solicitor (Non-Practising)

August 2016.

Those who remember Monty Python may recall the sketch in which contestants were challenged to summarise “A la recherche du temps perdu”, Proust’s only (and very long) book, in something less than two minutes. A request to consider having a session at Telford to summarise the latest developments in the field, in thirty-five minutes, gave me something of a feeling of déjà vu!

Mercifully, common sense prevailed; and so there will nothing on compulsory purchase and compensation, during Valuer Day. Having got us out of that one, and as Stan Edwards is standing down from his compulsory purchase slot, I have been asked, as a past Chairman of the Compulsory Purchase Association, to give some kind of overview. This I attempt to do, here; but I am seeking to give myself something of a safety net.

Changes in compulsory purchase and compensation have been sought by the professions for some considerable time, as there was a great deal of legislation which was widely believed to be outmoded. Major changes are now starting to take place, with one new statute already on the books and another bill in its post-consultation phase. The European valuers (not the EU) are moving towards a system of automated valuation modelling for mortgages, which is also an area in which members need to be informed.

That being so, the Institute is proposing to hold a separate day, later this year, and probably in Northumberland House, to discuss these matters, which are of great interest to the public and private sectors alike, and not just to valuers, themselves, but to those working with them, such as local government officers. The Institute often refers to itself as “a broad church”, and we want to serve the entire congregation by devoting ourselves, not just to rating, but to other subject areas in and surrounding valuation, and allied matters. It is vital, in my view, that public sector staff in general, local government staff, in particular, be informed as to the impending changes in this area, some of which are starting to emerge, while others, perhaps, are entering the chrysalid stage.

We hope to have a programme ready before Telford; and, if it is successful, we would move to a larger venue and thereafter, given delegate support, may even take the show on to the road. The success of the venture, ultimately, will be up to you, the membership, and whether or not you decide to take it up.For the time being, though, let us look at what is already “on the table” principally in the area of compulsory purchase.

The controversial HS2 Bill, for the new high-speed link between London and Birmingham, became law. In the hope, no doubt, that implementation was to get under way as soon as might be, but that existing compensation régimes were unlikely to be adequate and that the Housing and Planning Bill (containing proposed reforms to compulsory purchase and compensation rules had yet to reach the statute book. So a so-called “discretionary scheme” was launched, in stages, from Spring 2014 to Autumn 2015; and now that we have the statute, the scheme is starting to grind into action. This does not mean that the line is under construction: we still don’t know whether or not it will be built.

The project is in three phases, London to Birmingham (Phase 1) and Birmingham to Leeds and Manchester (Phases 2a and 2b): the routes of Phases 2a and 2b is not yet settled but most of Phase1 has been “safeguarded”, meaning that it is now, for the most part, immune from interference by planning applications from members of the public.

Were there a CPO threatened or in place, this situation would give rise to the right to serve statutory blight notices (always complex and a bit risky). The new discretionary scheme provides five possible options for some potential claimants in some circumstances, further or in the alternative to the statutory scheme. I need say no more than that the discretionary scheme is very complicated, and anyone, or any public body who or which feels that they might have a compensatable interest, whether under the discretionary or the statutory scheme, would be very ill-advised not to inform themselves and to take professional advice from someone suitably qualified and experienced to give it. There is certainly not space to delve into it, here.

What happened next? Oh yes – The Housing and Planning Act which received the Royal Assent, in May. Part 7 deals with compulsory purchase and compensation, and it is significant that many of the “summaries” of the Act, published by institutes which we know well, do not even mention the subject, which is truly a Cinderella matter, although it is an area of importance in an increasingly-crowded island. After all, apart from HS2, we have the possibilities of HS3, Crossrail 2 and the development of one or other of London’s two biggest airports. No doubt there are other proposals which are worthy of implementation. Quite apart from these nominal schemes, there are questions surrounding what I will call the “spinoff” developments which follow the implementation of the compulsory purchase scheme, itself.

The Law Commission, under the leadership of Lord Justice (now Lord) Carnwath, produced two excellent reports recommending wholesale reform, but they were too good to be allowed to happen, and they were tipped by the government of the day, into the “too hard” pile. The Supreme Court gave moves for reform another damaging kick in Spirerose, and then our honorary member, the Earl of Lytton, tripped up a Minister in the House of Lords who responded to a question that compulsory purchase reform might be a worthy aim, but that years of research would be required, before anything could be done: clearly, that Minister had not been briefed on the two reports, as John Lytton pointed out – or, indeed, on my articles in these pages, on reform issues! Now the present government has dipped a toe into the water which is highly commendable, if hellishly overdue, in the opinion of the professions.

Many of the provisions in the new statute will be widely welcomed, not least of all the changes surrounding the making of advance payments under s52 Land Compensation Act 1973. Although recorded compulsory purchases and compensation claims go back to the sixteenth century, advance payments were not provided for until the 1973 Act, and now that system has been widely improved. No doubt a spider’s web of secondary regulations can be expected to wrap itself round these, and other primary provisions.

Although most of the new provisions are essentially procedural in nature, setting or clarifying pre-existing time limits for proceeding with different steps in the process; and there are several time and cost-saving measures, such as that of allowing the High Court to quash only a Secretary of State’s decision, instead of quashing the order itself, thereby potentially speeding up the process. Other provisions, however, are likely to prove more controversial in their implementation, such as the reform of the severance and material detriment provisions, the manner in which easements are to be overridden, and some of the new notice periods.

Significantly, these proposals do not tackle the questions which confront us as to the appropriate and equitable manner of the assessment of compensation In this area, there are profound, if gentlemanly differences of opinion, and the representations which I have seen going to DCLG in relation to the new proposals for a second Bill, are far from agreement in a number of areas. For example – whither the Pointe Gourde principle. Is it still good for the present conditions? Or does it need a major overhaul? How is “the Scheme” to be treated? Is the “spinoff” or regeneration development to be left out of account? Where will the boundaries lie? Should owners and occupiers outside the order lands be able to benefit from the accretion in value to their holdings arising from the implementation of the Scheme, while those displaced or disturbed by that project have to be compensated on the basis that the Scheme does not exist?

The Neighbourhood Planning and Infrastructure will, it is to be hoped, offer answers to these and other outstanding questions. Regrettably, perhaps compulsory purchase and compensation form only a part of this second Bill. The draftsman seems to be drawing (sensibly, it may be felt) on the Law Commission’s report, although those proposals have not been fully debated. The consultation has been closed, and officials are mulling over the answers provided which are not unanimous on a number of issues, let it be said. It is suggested that the National Infrastructure Commission will be called upon to give independent advice – which has to be good, even though such advice is available from the Compulsory Purchase Association, membership of which is open to members of all professions actively working in the area, irrespective of the “side” of the proverbial fence on which they work (not infrequently on both sides in different cases). Let us hope that the views of the professions will be given appropriate weight in the exercise, unlike what has happened (and here I express a personal view) in rating, to (again in my own view) the detriment of the common weal.

The practice of compulsory acquisition in exchange for compensation is an old one and, in general terms, an honourable one. Reform is desperately overdue. I have written about these problems in “Valuer” and on a number of occasions, specifically between April 2008 and December 2009, but nothing has been done. We have been working with old and outdated legislation, which of course restricts what the courts are able to do (especially, dare I say, when only a small minority of the judiciary has any experience in this area of practice). The closest similarly which occurs to me is that of agricultural rating, where the courts are, in general, anything up to thirty years behind current agricultural practice, and the legislation limps along, well behind the pack.For the public benefit, and in the interest of the just and expedient development of a society with its ever-evolving needs, I pray that profound and even-handed change will come, in full measure. It is, perhaps, a pious and overoptimistic wish; but we need something similar to the reforms of the legal system in England which took place, mainly in the first half of the nineteenth century. The speed of legislation was not so manic, then, there was none of the current mania for regulations seeking to cover modern draftsmanship with an easily changeable patchwork of “chewing gum and string” secondary legislation, and experts were listened to.

The parliamentary debate will be interesting to a few of us, and frustrating to many. My fear, though, born of long experience of that species, both here and overseas, is that politicians who (bless ’em) know nothing about compulsory purchase or compensation will, as always, seek to look and do their best but who will, to quote W S Gilbert’s Private Willis in “Iolanthe” “… have to leave their brains outside, and vote just how their leaders tell ‘em to.”

Good luck to us all – and may justice prevail and give us all a good deliverance!

Peter Scrafton

©J.P. Scrafton, 2016

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