UK: Compulsory Purchase - New Guidance

Last Updated: 14 November 2011
Article by Murray Shaw

Compulsory purchase in Scotland is hardly new. This is amply demonstrated by the fact that parts of the relevant legislation goes back to 1845 and was presumably brought in at the time to facilitate many of the grand projects undertaken by our Victorian ancestors.

Given the current economic climate it seems unlikely that any deficiencies in the system of compulsory purchase is going to prove any great impediment to development. The contrary view is of course that in the current economic climate it is even more important to ensure there are no impediments in this area and this is very much the view of the Scottish Government. Accordingly they brought out revised and up to date guidance which if found in Circular 6/2011 – Compulsory Purchase Orders.

The substantive guidance which this Circular replaces dates from 1976. The underlying legislation however is substantially older though significant changes were brought about in 2007 as a result of the Transport & Works (Scotland) Act 2007. It is understood that the Scottish Law Commission is to look at the law in relation to compulsory purchase though it is unlikely that that review will start until late 2012.

The Circular is a helpful update in relation to compulsory purchase, the relevant law and the procedures which should apply. The Circular includes a number of appendices which contain useful factual guidance as well as practical advice in relation to the implementation of compulsory purchase schemes. Reading the Circular is a good starting point for anyone who is likely to be involved in compulsory purchase proceedings.

Appendix B contains a summary (albeit not an exclusive one) of the legislation which justifies the use of compulsory purchase powers and which bodies are entitled to promote compulsory purchase orders. Generally speaking most of the powers are capable of being relied upon by Scottish Ministers or local authorities but other bodies (generally with a public remit or role) can exercise compulsory purchase powers including police authorities, SNH, Scottish Enterprise, Highlands & Islands Enterprise, Scottish Waterways Board and Scottish Water. Some private organisations equally have compulsory purchase powers (or their equivalent) including electricity companies and pipeline operators.

The use of compulsory purchase powers or the threatened use of compulsory purchase powers can be controversial. For example there was significant controversy in relation to the Trump golf proposal when it was thought that the Trump organisation might ask Aberdeenshire Council to exercise compulsory purchase powers to acquire private houses immediately adjacent to the development. While the Council would have had the power under the Town & Country Planning (Scotland) Act to seek to use compulsory purchase powers it was very clear from the comments that were made that using such powers would have caused considerable controversy. In that regard it should be noted that a local authority can acquire land even although they may not be the end user. Section 189 of the 1970 Act specifically provides "it is immaterial by whom the local authority proposed that any activity or purpose... is to undertaken or achieved and in particular the local authority need not propose to undertake that activity or achieve the purpose themselves".

Another area that has proved controversial is the use of back to back arrangements where local authorities undertake the use of the compulsory purchase powers subject to indemnity arrangements with a third party who is likely to be the developer or end user. Use of such arrangements has resulted in litigation which has gone all the way to the House of Lords (now the Supreme Court) – see for example Standard Commercial Property Securities v Glasgow City Council 16 November 2006.

The Circular acknowledges the use of compulsory purchase power can be controversial and that the use of the powers can engage the law in relation to human rights. Paragraph 17 however notes that compulsory purchase should not normally breach the European Convention on Human Rights "where it is authorised by law, is proportionate and where it can be demonstrated to be in the public interest". The paragraph goes onto note that this simply reinforces the requirement that a relevant authority should only exercise the powers available to it when these are a proportionate response in all the circumstances and there is "a strong enough case for this in the public interest". Before determining whether or not to use compulsory purchase powers the relevant authority should therefore assess the public benefit against the a likely impact and also considered whether there are other ways in which it might realise the objections it wants to achieve.

Part of the proportionate response is of course to engage at an early stage with those likely to be affected. As paragraph 2 notes the deprivation of rights as against an individual or business is a serious step which may have significant consequences. The Circular therefore strongly encourages the relevant authority to consult early and "listen to" views expressed in that consultation process. Where possible the Circular encourages the relevant authority to try and acquire the land by agreement though paragraph 7 acknowledges "that in some cases it may be impossible or impractical for the authority to acquire all interests by agreement in the project timescale or at reasonable cost". This paragraph goes on to acknowledge that a failure to attempt a voluntary purchase will not necessarily prevent Scottish Ministers from confirming a compulsory purchase order as long as the relevant authority can justify its approach. Paragraph 7 goes on to note that "Scottish Ministers do not expect the authority to attempt to purchase by agreement where this would not be practicable. The authority should take a realistic view depending on the circumstances, and whether it is practicable to attempt to acquire the land by agreement. The date by which the authority needs entry to the land may be particularly important in determining the approach that it takes".

Specifically paragraph 8 goes on to state that there may be little to be achieved by unproductive negotiations particularly if there are time constraints and it may be appropriate to make a compulsory purchase order at an early stage in parallel with negotiations to seek to acquire the relevant land or interest.

There is a whole section in the Circular about justification and the issues which should be taking into account, some of which have been touched upon above. Clearly these need to be addressed in each individual set of circumstances.

The Circular notes that many authorities will have a choice of which piece of legislation to utilise. In some cases there may be specific powers available to the relevant authority when in other cases they may be more general. While there is probably merit in using more specific powers rather than general powers, the Circular does confirm that Scottish Ministers are unlikely to refuse to confirm an order simply on the grounds that a different power could have been relied upon as long and the authority can justify the power that it has chosen to rely upon and this in itself does not create any prejudice.

As well as dealing with the statutory procedures the Circular provides practical advice and steps that should be taken by the acquiring authority. It also deals with the position in relation to objections and the procedures which are likely to apply if objections are made and not withdrawn. There are of course no statutory grounds upon which objections to a compulsory purchase order must be made though if the only issue is compensation that in itself does not justify objection to a compulsory purchase given there are processes and procedures to deal with compensation.

The Circular also provides general guidance on compensation, an area which is extremely complicated.

The Circular is useful to make guidance in relation to compulsory purchase orders. It is however probably an area of law that needs review, revising and consolidation. It will therefore be interesting to see what advice the Scottish Law Commission comes up with.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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