Part II             (Rc 18.10.02)

the existing law and the new code

Introduction

                    2.1             The existing law is best understood in its historical context, which dates back to the early part of the 19th century. In Part II of our Compensation Report[1] we summarised the historical development of the law of compulsory purchase, and the main sources of the current law. Readers are encouraged to refer back to that report for this material. It illustrates the derivation and scope of the principal compulsory purchase enactments (procedure and compensation) and how they have been construed judicially.

The law today

                    2.2             We believe that it will be helpful to summarise the main sources of the law, as it stands before the present reform proposals, and to give an indication of the extent and nature of its use in practice.

                    2.3             Before we do so, it is helpful to note the extent to which the law on compulsory purchase in its current state is unsatisfactory: a Study undertaken by the City University for the then DETR in 1997[2] found that 63% of owners were dissatisfied with the compulsory purchase process and that 60% found the experience to be stressful. It took an average of thirty months for acquiring authorities to reach the stage of deciding to make a compulsory purchase order and a further twenty months for the order to be confirmed. This was followed by widely varying periods from just under two years to seven years for authorities to reach the point of taking possession, with a further average wait of over two years for compensation claims to be settled.

Sources of the current law

                    2.4             The sources of the current law are most conveniently considered under separate heads:

                                            (1)             Powers of compulsory purchase;

                                            (2)             Making and authorisation;

                                            (3)             Implementation;

                                            (4)             Determination of compensation; and

                                            (5)             Compensation rules.

(1) Powers of compulsory purchase

                    2.5             The vast majority of compulsory acquisitions are made under powers granted by numerous general Acts, for the purposes of functions of public authorities or utilities.[3] It is not part of our terms of reference to review these powers. The Government has announced its intention to supplement them by new powers which would:

enable local planning authorities to exercise compulsory purchase powers for a full range of planning and regeneration purposes, including halting the physical, economic and/or social deterioration of an area.[4]

                    2.6             Until recently it was common practice for transport and other similar undertakings to promote Private or Local Bills to authorise particular projects.[5] However, their use has become less important, since the 1992 Act enabled compulsory powers to be obtained without recourse to Parliament in most cases.

                    2.7             There appear to be no detailed, up to date statistics of the numbers of orders promoted under different powers. The 1997 City University study for the DETR, showed an annual average of 255 orders over the preceding three and a half years, broken down between Housing, Planning, Local Roads, Trunk Roads and Motorways, and Public Utilities.[6] The figures relate solely to acquisition of land, as such. Thus, for example, the figures for public utilities do not include powers obtained for the acquisition of rights in land, such as wayleaves for electricity lines or easements for pipelines.[7]

(2) Making and authorisation

                    2.8             The law relating to the making and confirmation of compulsory purchase orders is in the Acquisition Act, and regulations made under it.[8] The Act contains separate (but substantially similar) sets of rules for orders promoted respectively by ministerial and non-ministerial authorities. It contains special rules for particular categories of land, such as land of local authorities or statutory undertakers, National Trust land or commons. It also contains an exclusive procedure for court challenges to the validity of orders.

                    2.9             The procedure in outline is as follows:

                                            (1)             Authorisation of compulsory purchase is conferred by a compulsory purchase order, which is made by the acquiring authority and confirmed by the relevant Minister (“the confirming authority”).[9] The order must be in the prescribed form, including a description of the land by reference to a map, and a statement of the purpose for which the land is required.[10] Notices of the making of the order must be published in local newspapers, and served on owners and occupiers (other than tenants for less than a month).[11]

                                            (2)             All those served with, or entitled to service of, a notice (“statutory objectors”[12]) have the right to object or make representations within the time specified by the notice. Other objections or representations may be received by agreement with the acquiring authority or at the discretion of the confirming authority. Objections may be disregarded if they relate exclusively to issues of compensation.[13] A public inquiry or hearing must be held for objections by statutory objectors, but is discretionary in other cases.[14]

                                            (3)             After consideration of the objections, and the report of the inquiry or hearing, the order may be confirmed by the confirming authority, with or without modifications (but not, except by agreement, so as to extend the area of land taken).[15] Notices of confirmation must be published, and served as under (1).[16]

                                            (4)             There is a statutory right to challenge the order on legal grounds in the Courts within 6 weeks of publication of the notice of confirmation.[17] Otherwise, the validity of the order is immune from challenge in legal proceedings.[18]

(3) Implementation

                2.10             The procedures for implementing compulsory purchase orders following confirmation, are largely contained in the 1965 Act. In particular, this reproduces the equivalent provisions of the 1845 Act, with more recent amendments relating to the notice to treat procedure and entry on land in advance of the determination of compensation. The alternative vesting declaration procedure is covered by the Vesting Declarations Act.

                2.11             In the result, there are two alternative ways by which an acquiring authority may secure title to land, once the Compulsory Purchase Order (CPO) has ministerial confirmation: by notice to treat and by vesting declaration:[19]

                                            (1)             The notice to treat procedure involves service of a statutory notice on each affected landowner to initiate the process of agreeing or determining compensation. Title does not pass to the authority until compensation has been settled, but the authority may take possession in the meantime by serving notice of entry.[20] The land is valued at the date of entry (or the date of determination of compensation if earlier) and interest runs from that date.

The purpose of service of notice to treat is threefold:

                                                                   (a)              To inform interested persons that the acquiring authority intends to proceed to exercise its powers of compulsory purchase for the subject land;

                                                                   (b)              To obtain particulars of the recipients’ interest in the land and of the compensation to be claimed; and

                                                                   (c)              To tell the relevant parties that the authority is willing to negotiate on the compensation “to be made for the damage which may be sustained by reason of the execution of the works.”[21]

The notice to treat route encompasses two separate stages. The purpose of notice of entry as the second stage (served after, or at the same time as, notice to treat) is:

(a)to give notice to the owner, lessee and occupier of subject land that the authority will be entering that land;

(b)to validate such entry at the end of the prescribed period, notwithstanding non-payment of compensation at that juncture; and

(c)to act as a preliminary step to enforcing entry by warrant if entry is then denied.[22]

                                            (2)             The more recent vesting declaration procedure enables the authority, after confirmation, to make a declaration, vesting in itself title and authorisation to enter after expiry of a defined period (not less than 28 days) from the service of a notice on those affected. Title passes on the date so fixed, whether or not compensation has been settled. [23]

The purpose of a vesting declaration is to short-circuit the lengthier process of notice to treat followed by notice of entry. Execution of a general vesting declaration is (after preliminary notice) a single-step process which vests title to subject land automatically in the acquiring authority without need for formal conveyance or investigation of title. The acquired interests convert into compensation rights, and right of entry is immediate against all interest holders except those with minor tenancies. We are given to understand that today the procedure is used extensively by acquiring authorities. It has the added advantage that it effects transfer of title where identifying ownership of land would otherwise be problematic.[24]

                2.12             The 1965 Act and the Vesting Declarations Act also contain provisions enabling the owner of land partly included within an order, to compel the purchase of the whole.[25] These have been supplemented by provisions of the 1973 Act. [26]

(4) Determination of compensation

                2.13             The 1961 Act requires unresolved issues of compensation to be referred to the Lands Tribunal.[27] The constitution and jurisdiction of the Tribunal, and procedures before it, are governed by the Lands Tribunal Act 1949, and rules made under it.[28]

(5) Compensation rules

                2.14             The law relating to compensation, as it exists today, represents a complex amalgam of statute law and judicial interpretation. The principal statutory sources are:

                                            (1)             the 1961 Act;

                                            (2)             the 1965 Act;[29]

                                            (3)             the 1973 Act;

                                            (4)             the Acquisition Act;

The relevant provisions are discussed in detail in the Compensation Report.