In recent years, there has been an increasing number of compulsory purchase order cases involving agricultural businesses. After many years of public debate, the high-speed rail link from London to Birmingham, known as High Speed 2 (HS2), has become a reality. For landowners and tenant farmers on the route they will have, and may still be in the process of, securing compensation for the land that was taken. At the time of writing, many with land earmarked for the route between Crewe and Manchester/Leeds, still do not know the fate of their land. Many businesses will have been blighted by the threat of HS2 for many years and may be entitled to compensation for losses in this period.
The ability to take land, without the owner’s consent, is granted to HS2, and other bodies (referred to as Acquiring Authorities) through the use of legal powers known as ‘Compulsory Purchase’.
“Compulsory purchase of property is an essential tool in a modern democratic society. It facilitates planned and orderly development... Hand in hand with the power to acquire land without the owner’s consent, is an obligation to pay full and fair compensation.” - Lord Nicholls of Birkenhead
For businesses whose land is subject to compulsory acquisition the task of quantifying the impact of this on their business can be complex and often daunting for business owners.
It is vital that businesses give themselves sufficient time to consider relocation options, and to fully understand the impact that relocation may have on their business operations. The impact may be temporary, but this does not mean that quantification is straightforward. Some businesses that have relocated have suffered a permanent impact resulting in certain income streams no longer being viable. Unfortunately, the ability to relocate a farm, is often limited and the question then asked is how to quantify the value of a business which has been extinguished.
Businesses need to be prepared and take professional advice to ensure all options are adequately explored; this is vital to securing the right level of compensation. The rules of compulsory purchase and entitlement to compensation are complex. A business owner is entitled to compensation for certain losses, including loss of business profits, on the basis of ‘Value to Owner’. This principle is unique to compulsory purchase.
As in any claim situation, the success of the claim will rely heavily on the quality of evidence. Evidence prepared and obtained at the time of the event is more likely to be considered credible than evidence recreated when compensation is disputed. Third party evidence is considered stronger than evidence generated internally. Taking appropriate expert advice from the outset can help business owners to create, seek and preserve key evidence including evidence to demonstrate they have mitigated their losses.
The claim will be scrutinised, it must stand up to challenge. The better a claim is constructed, in accordance with the compensation code and suitably evidenced, the more chance it has of achieving quicker resolution resulting in the payment of compensation. Whilst the costs of taking professional advice will need to be incurred, in the first instance, by the farmer or landowner, the Acquiring Authority is required to compensate for all reasonable costs incurred in taking professional advice. In recent years there has been an increase in such cases being funded by litigation funders but there is a price to such funding.
There is no doubt, the loss of land is a very difficult and emotional period for those affected and it is vital that full and fair compensation is received. If you would like any advice regarding compulsory purchase, please contact Hannah Griffin at hannah.griffin@hazlewoods.co.uk or 01242 680000.