part I
Introduction
To review the law (legislation, case law and common law rules) relating to compulsory purchase of land and compensation, with particular regard to
(i)The implementation of compulsory purchase orders
(ii)The principles for the assessment of compensation on the acquisition of land
(iii) Compensation where compulsory purchase orders are not proceeded with
(iv)Compensation for injurious affection
and to make proposals for simplifying, consolidating and codifying the law.
As part of the Review, the Law Commission will give priority to consideration of the rules relating to the disregard of changes in value caused by the scheme of acquisition.
1.2 On 24 July 2002 the Commission published a Consultative Report directed to items (ii) and (iv).[1] We will refer to that report as the “Compensation Report”. The background to that report, and the issues covered, are explained in the Introduction. The present project is directed to the remaining items in the terms of reference: (i) implementation of compulsory purchase orders, and (iii) compensation where compulsory purchase orders are not proceeded with (“abortive orders”). We will refer to this as the “Procedure Report”.
1.3 In addition, for the reasons explained in the Compensation Report,[2] we have included in the matters to be covered by the present report, in agreement with the Office of the Deputy Prime Minister (ODPM), the subject of making and authorisation of compulsory purchase orders.
1.4 The reference arose out of a recommendation of the Compulsory Purchase Policy Review Advisory Group (“CPPRAG”), established by the then Department of the Environment, Transport and the Regions (“DETR”). Their Final Report (referred to in this Report as the “CPPRAG Review”) was published in July 2000.[3]
1.5 The CPPRAG Review commented that the law had become “an unwieldy and lumbering creature”; they found “the existing legislative base . . . complex and convoluted” and requiring simplification and codification.[4] The problem was seen as lying partly in the fact that the legislation was derived from 1845[5] or earlier, and that:
Even where the provisions of that Act have been subject to later amendment or re-enactment, the Victorian concepts and antiquated phraseology have often been carried forward, leading inevitably to difficulties in interpretation, or even comprehension.[6]
1.6 The CPPRAG Review made a number of recommendations for detailed improvement of the law. The first of these proposed a direct role for the Law Commission in preparing new legislation “consolidating, codifying, and simplifying the law”.[7] It added:
In framing the new statute, particular care should be taken to bring the language up to date and to standardise procedures except where that would create difficulties of its own. The new statute(s) should set out procedures as well as a clearly defined Compensation Code.
1.7 In December 2000, following discussion with the Law Commission, the DETR and the Lord Chancellor’s Department (“LCD”) approved terms of reference for a preliminary study to identify the likely features of such a project. In March 2001 the Law Commission published a preliminary paper (“the Scoping Paper”). This included a draft framework for a new Code, and discussion of the main issues and a suggested programme for further work.[8] The Law Commission’s proposals were generally accepted by the DETR, and were reflected in the terms of reference set out above.
1.8 The Government’s response to the CPPRAG Review and its proposals for reforming the law were contained in a Paper published by the DTLR (as successor to DETR), in December 2001.[9] It accepted that “the most basic step” in the process of modernisation would be to “consolidate, codify and simplify the legislation as soon as the opportunity arises” and undertook to work with the Law Commission to achieve this.[10] It indicated that the Law Commission would be producing a Consultative Report (later to become two Reports, one on Compensation and one on Procedure) setting out proposals to codify and consolidate the existing legislation. Detailed proposals were made in relation to most of the issues raised by the CPPRAG Review. Although further responses were invited on certain issues (see below), it is clear from the Minister’s introduction that it was regarded as representing a firm policy statement on most matters.[11]
1.9 The Paper identified four particular issues on which further responses were invited:
(1) A time limit for submitting compensation claims;
(2) A time limit for reference of compensation disputes to the Lands Tribunal;
(3) Provision for appointment of an “independent complaints adviser”; and
(4) A statutory duty to provide accommodation works[12].
1.10 It also indicated that in its Consultative Reports the Law Commission would be seeking views on a number of issues, including awarding compensation where a compulsory purchase order is not implemented.[13]
1.11 Following expiry of the consultation period on the Policy Statement, the ODPM, as successor to the DTLR for planning-related functions, published its Policy Response Document in July 2002.[14] That document set out the Government’s proposals for a simpler, fairer and quicker system and, in particular, indicated (in the context of procedure) that it is minded to legislate to achieve:
(1) Confirmation of unopposed orders by acquiring authorities;
(2) Consideration of objections by means of written representations where that is agreed by objectors;
(3) The definition of dates from which various compensation entitlements arise (and, in particular, making clear that determination and valuation of assets should ordinarily occur at date of entry or date of vesting);
(4) Affording all persons with interest in or rights over the subject land (including tenants) the right to be treated as statutory objectors and to be heard at an inquiry;
(5) Reduction of the overall time limit for completing the compulsory purchase process following confirmation, by reducing to 18 months the period for service of notice to treat (or making a vesting declaration), and reducing to 18 months the period of effectiveness of such notice;
(6) Increasing effectiveness of notice of entry, once served, to a maximum period of 3 months;[15]
(7) Provision of compensation for actual losses where a compulsory purchase scheme does not proceed (an issue being considered by the Law Commission);
(8) Encouragement of easier access to the Lands Tribunal, including looking at the possibility of repealing section 4 of the Land Compensation Act 1961 (“the 1961 Act”) (which presently restricts awards of costs);
(9) Provision for confirmation of orders in stages so that difficulties relating to part of a site should not delay progress on the remainder; and
(10) Giving all authorities powers to acquire land compulsorily for mitigation works[16] where such works are being prejudiced by delay in agreeing acquisition.
1.14 In the context of compensation law, notwithstanding this work, certain major issues of substance were identified as requiring further work by the Commission, notably the rules relating to disregard of the scheme of acquisition.[17] Equally importantly, the presentation of the law needed radical overhaul. The existing law was contained in a bewildering variety of different sources, statutory and judicial, and in a form lacking either coherence or rationality. There was and is an urgent need for the principles of compensation law to be re-stated in a comprehensive Code. Our Compensation Report contains proposals designed to form the framework for such a Code.
1.15 The challenge with regard to procedural issues is rather different. In the first place, much of the procedural law is contained in relatively modern, self-contained statutes, which do not in themselves require substantial recasting. In particular, the rules for making and confirmation of compulsory purchase orders (derived from a 1946 statute[18]) were consolidated in 1981;[19] and the rules for the “vesting declaration procedure”, which is one of the two normal methods by which compulsory purchase is implemented, are in a self-contained statute, also of 1981.[20] The main challenge lies in the Compulsory Purchase Act 1965 (“the 1965 Act”), which contains the traditional rules for implementation of compulsory purchase derived largely from the early 19th century. Although the core provisions work reasonably well, parts are obsolete or outdated, and much of the language is archaic and obscure.
1.16 Secondly, the main elements of the procedural machinery were found by CPPRAG to be reasonably workable and well understood. Following public consultation, the Government has adopted certain proposals for substantive reform,[21] but no major outstanding issues were identified by them as requiring further work by the Commission.[22] On the other hand, we recognise that the CPPRAG work was necessarily selective. As part of this review, we have sought to identify points of detail in the procedural statutes which were not specifically addressed by CPPRAG, or in the Government’s response, but which should properly be addressed in what is intended as a “fundamental review” of the law in this area.
1.17 We remain strongly of the view that the ultimate aim should be the consolidation of the existing statutes, as amended, into a single Procedural Code. However, in this report, unlike the Compensation Report, we have not thought it necessary to put forward our proposals in the form of a complete draft framework “Code”.[23] The problem is not so much the overall presentation of the legislation, but the need for selective reform, and modernisation. Accordingly, we have attempted to set the Government’s proposals in the context of a coherent statement of the procedural law. In doing so, we have had two main aims: first, to provide an opportunity for public comment on additional points of detail which may require substantive reform; and, secondly, to identify those existing provisions (mainly of the 1965 Act) which, for reasons of obsolescence or archaic language, should be repealed or restated in a modern Code.
1.21 Special procedures apply where there is intention to acquire the following categories of land:
(1) Land of statutory undertakers;
(2) Local authority-owned land;
(3) National Trust land;
(4) Common, open space and allotment land;
(5) Listed buildings and land within conservation areas;
(6) Burial grounds; and
(7) Ecclesiastical property.
1.22 In each of these cases,[24] special rules relate to authorisation under the Acquisition of Land Act 1981, (“the Acquisition Act”)[25] and implementation under the 1965 Act.[26] We understand that these are to be subject to separate review by Government.[27]
1.24 In the Scoping Paper we drew attention to the fact that the CPPRAG Review had not proposed any major change in the structure of the legislation for determination of compensation through the Lands Tribunal. We referred to the views of the President of the Tribunal (George Bartlett, QC) as to the desirability of repealing sections 2 to 4 of the 1961 Act.[28] Procedural reforms can for the most part be dealt with by Rules (or Practice Directions) made under existing powers.[29]
1.25 The Government has commented on section 4. The DTLR addressed the issue in its Policy Statement:
As CPPRAG explained, section 4 of the Land Compensation Act 1961 provides that where an acquiring authority have made an unconditional offer of compensation in writing and the sum awarded by the Tribunal does not exceed that sum, the Tribunal has no alternative but to order the claimant to bear his own costs and pay those of the acquiring authority so far as they are incurred after the offer has been made. This provides a strong disincentive to claimants where the sum at stake may be less than the potential costs which could be awarded against them. We therefore see a case for repealing section 4 in order to allow the Lands Tribunal full discretion as to costs in all cases.[30]
1.26 In its most recent Policy Response Document the ODPM said
We remain committed to the need to remove the obstacles currently deterring claimants from making full use of the Tribunal’s expedited procedures and, to this end, confirm that we will pursue the possibility of repealing section 4 of the Land Compensation Act 1961 insofar as it fetters the Tribunal’s discretion as to the award of costs in all cases.
1.28 Much of the 1965 Act was based on the Lands Clauses Consolidation Act 1845 (“the 1845 Act”), even to the extent that whole sections were lifted wholesale into the later Act with very little modification. The rationale for that was that the 1964 Bill’s main object was to consolidate the Lands Clauses Acts[31] as applied by the (then) Acquisition of Land (Authorisation Procedure) Act 1946, (“the 1946 Act”), incorporating the modifications introduced by that Act. It was recognised at the time that the Lands Clauses Acts would remain on the statute book (subject to certain repeals driven by the need for statute law revision), although “they will constitute a code of which little use will be made.”[32]
1.29 Three principal obstacles appeared to prevent full consolidation:
(1) The 1845 Act was partly adoptive and partly not. So far as it was adoptive, it had been adopted with innumerable variations of modification by a long series of Acts both public general and local. Moreover, the 1845 Act was automatically incorporated (and not simply applied) unless it was specifically excluded in the special Act;
(2) Many of the 1845 Act’s provisions had been overtaken, without being repealed, by the property legislation of 1925; and
(3) At some of the most important points the 1845 Act proceeded by inference rather than by specific enactment. Thus, instead of conferring a right to compensation, it assumed the existence of such right and concentrated on the method of assessing the amount (which meant that case law had filled the gaps and would need to be codified – a task outside the then scope of consolidation).
These concerns gave rise to the fear that repealing the 1845 Act would lead to errors of inadvertent omission, and consequently alteration, of the present law.
(1) That ODPM presently has in progress a review of the 1992 Act and its procedures; and
(2) An order made under the 1992 Act will embrace a range of issues (eg the grant of planning consent) which go beyond simply compulsory acquisition of land. The 1992 Act procedure, and the bodies which use it, need that flexibility of approach and it would not be appropriate to review one component in the package in isolation from the others.
(1) Application of procedural statutes We note the apparent difference between the 1961 Act, which is of universal application; and the more selective application of the 1965 Act and the Acquisition Act. There appear to be no policy reasons for the difference. We make no proposals for change at this stage. The ultimate goal should in principle be a comprehensive procedural code of universal application; any exceptions should be identified and justified as such.
(2) Basic definitions We comment briefly on three statutory concepts which are basic to the procedures:-
(a) Acquiring and confirming authorities The definition of “acquiring authority” is wide enough to cover all bodies, public or private, on whom powers of compulsory acquisition are conferred by statute. The identity of the “confirming authority” depends on the statutory context. The Government has made proposals to enable acquiring authorities to confirm their own unopposed orders.
(b) Land There is a confusing variety of definitions of “land”, which does not appear to cause practical difficulties, but should be rationalised in a consolidation.
(c) Service of documents The procedural mechanics, in the various statutes, for identifying interests in the subject land, and serving notices, are discussed. Again, there is room for rationalisation, although the differences do not appear to cause practical difficulties. We note the Government’s proposals to extend “statutory objector status”[33] to those with no more than a right over the land; and the consequential need for amended rules for service on such interests. We make a proposal for that purpose.
(d) Entry for survey We note the existing powers of entry for the purposes of preliminary survey, under section 11(3) of the 1965 Act and (for local authorities) section 15 of the Local Government (Miscellaneous Provisions) Act 1976, (“the 1976 Act”). We make no proposals for change, but invite comments.
(1) The present distinction between procedures for Ministerial and non-Ministerial orders seems an unnecessary complication, which could be removed in a future consolidation;
(2) We note the Government’s proposals for extension of statutory objector status, and for confirmation of unopposed orders by acquiring authorities, and for confirmation of orders in stages; and
(3) We discuss the statutory procedure and powers of the court on challenges to the validity of an order. We note that at present the grounds for challenge relate to the validity of the order, and that the court is obliged, on a successful challenge, to quash the whole order from its inception. We propose that, in line with the corresponding procedure under other similar Acts, the grounds for challenge should relate, not to the order, but to the decision of the confirming authority (whether to approve or reject the order); and that the court should have power to quash that decision (or make such other order as is appropriate to the grounds upheld).
(1) We note the Government’s intention to retain two alternative methods for implementing an approved order: notice to treat and vesting declaration;[34]
(2) We consider the Government’s proposals for revised time limits under both procedures, and make proposals to give them effect;
(3) We review the main stages in the notice to treat procedure:
(a) Formalities of notice to treat;
(b) Notice of entry;
(c) Completion of purchase;
(d) Deed poll procedure;
(e) Missing interests; and
(f) Persons with limited powers;
(4) We make proposals for a new deed poll procedure, and for a new provision for owners who are untraced, or unable or unwilling to act. We propose the repeal of Schedule 1 to the 1965 Act (persons with limited powers). Subject to those changes, and to simplification of the language in a future consolidation, we make no further proposals, but invite comments on any practical problems which should be addressed; and
(5) We review the rules for the vesting declaration procedure. We raise a question as to the effect of a vesting declaration on existing rights such as easements. Subject to that, we suggest that, as a relatively modern procedure, the existing provisions could be incorporated in a future consolidation without substantial amendment.
(1) Lesser interests
(a) Minor tenancies We review the rules, under respectively the notice to treat and vesting declaration procedures, for minor tenancies (such as for a year to year or less). They enable the authority, rather than “acquiring” such interests, to rely on the contractual provisions for termination. There are some differences between the two procedures. We propose that they should be brought into line, and the archaic language of the 1965 Act restated in modern form; and
(b) Easements and other private rights We make proposals to clarify the law relating to interference with easements or other rights over the subject land, including a new power for the authority to elect whether to “override” the rights (to the extent necessary to allow the proposed works and use)[35] or to “extinguish” them altogether;
(2) Divided interests Where part of a building or holding is subject to compulsory purchase, the owner may in certain circumstances compel the authority to take the whole. We review and compare the existing provisions relating to notice to treat procedure (1965 Act, section 8) and vesting declarations (Compulsory Purchase (Vesting Declarations) Act 1981, (“the Vesting Declarations Act”), section 12, Schedule 1), and note the separate rules for agricultural land (Land Compensation Act 1973, (“ 1973 Act”), sections 53-57). We discuss the comments of CPPRAG and the ODPM on possible reforms. We make proposals for a revised, unified set of rules for a “divided property notice”, applicable to both procedures; and suggest an extension of the existing right to enable such a notice to be served by any owner whose retained land, as a result of the acquisition, cannot reasonably be used for the previous purpose;
(3) Mortgages and rentcharges We propose that the existing provisions of the 1965 Act should be retained without substantive amendment, but invite comments; and
(4) Public rights of way We note the existence of a special procedure for extinguishment of rights of way over land subject to compulsory acquisition, but propose no change.
(1) Limitation We make proposals for rationalising the limitation periods applicable to determination and recovery of compensation. We consider separately the position as it is now (under the Limitation Act 1980), and as it would be under the recommendations of the Law Commission for reforming the law of limitations generally;[36]
(2) Unauthorised entry and omitted interests We propose the repeal of section 12 of the 1965 Act (penalty for unauthorised entry). We discuss the existing rules for dealing with omitted interests, and propose no substantive change;
(3) Refusal to give possession We recommend the retention of the provision for the authority’s right of entry to be enforced by warrant to the sheriff, but propose a restatement in more modern form.[37] We suggest that the sheriff’s costs should be payable by the authority, subject to the power to recover them (or deduct from compensation) from the person refusing possession;
(4) Distress We suggest that the special rules of the 1965 Act for levying distress are obsolete and should be repealed;
(5) Payments into and out of court We summarise the rules of the 1965 Act relating to money paid into court. In view of their limited significance in modern practice, they could be considerably shortened and simplified. We suggest the inclusion of a provision to the effect that the costs incurred in connection with such payments be paid by the authority, save as the court may otherwise order. We make a proposal to this effect and invite comments thereon;
(6) Costs We propose replacing section 23 of the 1965 Act by a simple provision by which all reasonable costs incurred in completing the purchase will be borne by the authority; and
(7) Local land charges We note and adopt the Government’s proposal that the making of a compulsory purchase order should be registrable as a local land charge, and that the main steps in the process should be included in the register.
1.43 Part X - Our Proposals and Consultation Questions
1.44 Part XI – Conclusion including our impact assessment
1.45 The Appendices comprise:-
(1) Glossary and abbreviations for statutes;
(2) Selected extracts from English statutes:
(a) Land Compensation Act 1961, (“the 1961 Act”);
(b) Compulsory Purchase Act 1965, (“the 1965 Act”);
(c) Land Compensation Act 1973, (“the 1973 Act”);
(d) Local Government (Miscellaneous Provisions) Act 1976, (“the 1976 Act”);
(e) Acquisition of Land Act 1981, (“the Acquisition Act”);
(f) Compulsory Purchase (Vesting Declarations) Act 1981, (“the Vesting Declarations Act”); and
(g) Town and Country Planning Act 1990, (“the 1990 Act”);
(3) Acknowledgements; and
(4) Select bibliography.
[1]Towards A Compulsory Purchase Code: (1) Compensation, Consultation Paper No 165.
[2]Compensation Report, paras 1.24-5.
[3]Fundamental Review of the Laws and Procedures relating to Compulsory Purchase and Compensation: Final Report (July 2000). Its publication was announced in a Parliamentary Answer by the Minister (Nick Raynsford MP) on 27th July 2000. Government invited views on the report which would be taken into account in preparing the Government’s response.
[4]CPPRAG Review, p 7 para iii.
[5]The Lands Clauses Consolidation Act 1845 (largely re-enacted in the Compulsory Purchase Act 1965) remains the foundation for much of the law.
[6]CPPRAG Review, para 20.
[7]CPPRAG Review, para 24.
[8]Compulsory Purchase and Compensation: a Scoping Paper(Law Commission, March 2001). The text is available on the Law Commission’s web-site (www.lawcom.gov.uk).
[9]Compulsory Purchase and Compensation: delivering a fundamental change (DTLR, December 2001) (referred to in this report as the “Policy Statement”). It was published as one of three ‘daughter’ documents under the aegis of the Planning Green Paper Planning: delivering a fundamental change, and sets out “the Government’s proposals for change” (pp 7-33), followed by an Appendix “Background to proposals and response to CPPRAG” (pp 39ff).
[10]Policy Statement, pp 3 and 11.
[11]Policy Statement, foreword by Lord Falconer, Minister for Housing, Planning and Regeneration.
[12]Accommodation works are designed ordinarily to mitigate the effect of compulsory purchase and, in particular, severance, injurious affection and disturbance. Works may involve the building of bridges, tunnels or underpasses to connect severed portions of land; the relocation of services (such as sewers or drains) or accesses or the replacement of amenities; and the erection of fencing, walls or bunding to separate land as a safety measure or to reduce noise or visual intrusion. The Commission considered the effect of such works in its Compensation Report at Part V on Core Principles at para 5.8.
[13]Policy Statement, para 4.21 and App para 3.76. We deal with that issue later in this Report in the context of Abortive Orders.
[14]Announcement made by the Deputy Prime Minister (John Prescott, MP) on 18th July 2002 through an Answer to a written Parliamentary Question, following his statement to the House of Commons on “Sustainable Communities – Housing and Planning”; Compulsory Purchase Response Document (ODPM, July 2002).
[15]The minimum period would be 2 months and the maximum 3 months under the proposal.
[16]This expression derives from the Policy Statement at paras 2.9, 2.10 where Government articulated its intention to legislate to create substantive rather than procedural power allowing authorities in appropriate circumstances to acquire land “needed to mitigate adverse effects of public works” and to reduce opportunity for delay. That intent was reinforced in the Policy Response Document where Government said that the power was necessary so as to provide “a back-up for authorities where mitigation works are being prejudiced by problems in acquiring land by agreement;” ( para 15(ii)).
[17]See Terms of Reference, para 1.1 above.
[18]The Acquisition of Land (Authorisation Procedure) Act 1946.
[19]The Acquisition of Land Act 1981: see Part II, para 2.8 below.
[20]The Compulsory Purchase (Vesting Declarations) Act 1981: see Part II, para 2.11(2) below.
[21]See generally the Policy Statement and Policy Response referred to above. In this report, we will identify and explain the individual proposals as they arise.
[22]Other than “Abortive orders”, which, although covered by this report, is more naturally seen as part of the Compensation Code: see Part VIII below.
[23]Cf Compensation Report, Part XI.
[24]Discussed fully in Butterworths Compulsory Purchase and Compensation Service, (1st ed, 1999), (“Butterworths”) at C[601]ff.
[25]See ss 16-22 on special kinds of land and special Parliamentary procedure; s 28 and Sched 3 on acquisition of new rights over special kinds of land (statutory undertakers’ land, local authority land, National Trust land, common land).
[26]See s 21 and Sched 4 on common land; s31 on ecclesiastical property.
[27]A review is presently in hand by Government in connection with statutory undertakers: see Policy Statement, App paras 2.4, 2.5.
[28]The President’s reasoning is set out in our Scoping Paper at paras 46, 47.
[29]Lands Tribunal Act 1949, s 3(11). Repeals would need primary legislation, or possibly an order under the Regulatory Reform Act 2001.
[30]Policy Statement para 3.13 (“to repeal section 4 of the Land Compensation Act 1961 so as to allow the Lands Tribunal full discretion as to the award of costs in all cases”) and App para 2.32.
[31]The Interpretation Act 1978, s 5, Sch 1, Vol 41, title Statutes, provides that in any Act passed after the commencement of that Act, unless the contrary intention appears, the above expression shall mean, as respects England and Wales, the following Acts: the Lands Clauses Consolidation Act 1845, the Lands Clauses Consolidation Acts Amendment Act 1860 and any Acts for the time being in force amending the same.
[32]Notes on Clauses in the Compulsory Purchase Bill 1964.
[33]See Part II, para 2.9(2) below.
[34]We propose the repeal of the obsolete procedure in Schedule 3 to the 1965 Act.
[35]This would remove the uncertainty created by the distinction drawn in some cases between the erection of the works and their use: see Thames Water Utilities v Oxford City Council [1999] 1 EGLR 167 (see Part VI, para 6.21 below).
[36]Limitation of Actions: Law Com No 270 (June 2001).
[37]We note that this proposal is subject to the Government’s current review of civil enforcement procedures.