PROPERTY JOURNAL

RICS offers alternative solution to compulsory purchase disputes

RICS offers a tailored ADR solution for compulsory purchase disputes, which enables people and businesses to avoid lengthy and costly court action

Author:

  • Ysella Jago

09 September 2022

Abandoned and derelict workshop and residential house waiting for demolition

Resolving compulsory purchase disputes can be expensive and time-consuming. The owners of land and property subject to acquisition by compulsory purchase orders tend to be small scale compared with the purchasing organisations.

Arising disputes make this a legal equivalent of David and Goliath.

How compulsory purchase process works

Compulsory purchase enables designated authorities to acquire rights over land or property, or purchase it outright, without the current owner's consent.

In the UK, most compulsory purchase orders (CPOs) are made using powers given to such authorities. For example, the power to acquire land compulsorily can be found in several different statutes, including section 226 of the Town and Country Planning Act 1990, the Highways Act 1980, the Transport and Works Act 1992, the Crossrail Act 2008 and the Acquisition of Land Act 1981. A public interest test must be satisfied first, and compensation is generally payable to those who have had their land or property acquired in this way.

To give an example of how these powers are exercised, a highway authority may need to build a motorway across a piece of land that the owner does not want to sell. In this case, a CPO may be made under the Highways Act 1980 to purchase the land forcibly.

Similarly, a town council may need to demolish properties to make way for new infrastructure development. If the owners do not agree to sell, the council can exercise power granted under legislation to issue CPOs and take possession of the properties in question.

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Costs and values at root of disputes

Understandably, disputes commonly arise where land or property is being acquired under a CPO.

At the heart of many disputes are disagreements about the property's value, the costs of acquiring and moving to a new property, and sometimes additional payments such as the fees for professional advice on compensation.

As a result, many claimants – who, it must be remembered, are involuntary participants in the process – argue that they are being offered inadequate compensation. Conversely, acquiring authorities will often be concerned about overinflated compensation claims.

Where a dispute cannot be settled, the law provides that the parties may refer the matter to the legally binding decision of the courts, specifically the Lands Chamber in England and Wales or the Lands Tribunal in Scotland. However, parties may not wish to take this route for various reasons; it is frequently slow and costly, for instance, which often deters those with smaller claims.

Court proceedings are almost always undertaken in public as well, and this can present the risk of reputational damage. Furthermore, the legal process can be distressingly formal for participants, while outcomes will usually disappoint one or both parties even if they settle before a judgment is given.

RICS service offers two routes to resolution

For these reasons, RICS offers alternative dispute resolution (ADR) provision for compulsory purchase disputes. The objective is to help parties settle their differences early, amicably and cost-effectively.

The RICS ADR for Compulsory Purchase Disputes service enables disagreements to be settled in an impartial and efficient way without parties needing to incur the time and costs of court. The service offers parties two options: independent determination or mediation.

The first involves both parties making submissions to an experienced, professional compulsory purchase expert who is trained in the dispute resolution procedure. They will assess the arguments and supporting evidence provided by each party, and will draw on their knowledge and expertise to reach an impartial decision. This will be in writing and include reasons, and will be final and binding unless the parties agree otherwise.

The other option is evaluative mediation, which is suited to any type of dispute but particularly larger, more complex cases where there is a genuine desire by both parties to agree a settlement. The process enables them to explore options through a structured and practical negotiation process. The mediator will offer a reality check of both parties' positions and help them shape realistic, pragmatic ways to resolve the dispute.

Whichever of the two methods they choose, the parties will benefit from having an impartial, knowledgeable dispute resolver appointed to their case who has practical experience of compulsory purchase.

There are several other benefits to using the RICS ADR service. Compared with litigation, ADR is relatively simple and flexible. Parties are in control of the timetable and agenda, and they can adapt the process to suit the size and complexity of their dispute.

The service is also easy to understand, and can be adapted for various types of dispute. Most importantly, it can enable many to resolve their compulsory purchase disputes where the costs, timescales and complexity of the legal process would otherwise make it prohibitive.

'Parties are in control of the timetable and agenda, and they can adapt the process to suit the size and complexity of their dispute'

Ysella Jago is ADR senior specialist at RICS
Contact Ysella: Email

Related competencies include: Compulsory purchase and compensation, Conflict avoidance, management and dispute resolution procedures

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