UK: HS2 And Landowners - September 2013

The proposed new High Speed 2 railway from London to Birmingham (Phase 1) and from Birmingham to Manchester and Leeds (Phase 2) will have a huge impact on land holdings in its path and on adjoining areas.

Some impacts will be temporary such as those caused by its construction. Some will be permanent – not least the existence of the railway, once constructed, and the compulsory acquisition of land needed for it. Some impacts will largely be confined to the specific line of the route; many will be wider.

All kinds of land will be adversely affected – commercial, residential, agricultural and recreational. Owners and occupiers affected will range from local authorities, businesses and charities to families and individuals such as farmers and home owners.

WILL IT HAPPEN? CAN IT BE STOPPED?

HS2 must be authorised and funded. The form of authorisation is to be legislation in Parliament. The Bill for Phase 1 is expected to be introduced in late November 2013. It is not expected to be passed, however, by the time of General Election in 2015. It will be possible for the Bill to continue after the General Election, if the government then elected so decides. The Bill for Phase 2 will not be introduced until after the General Election.

Since 2010, the project has enjoyed support from the three main political parties in England - the Conservatives, Labour and the Liberal Democrats – but cracks have been appearing in Labour's support for it. Senior figures such as Alistair Darling and Lord Mandelson have questioned whether the expense is justifiable. The likelihood of the project proceeding may therefore hinge on the position adopted by the parties (including UKIP) in their manifestos in 2015 and subsequently. In the meantime, work on the project proceeds apace.

The overall funding for the route (Phases 1 and 2) has been set at £42.6bn (including £14.4bn in contingency). The rolling stock costs are estimated at £7.5bn (including £1.7bn contingency). The project will require a sustained commitment from successive governments to provide funds of this magnitude. If funds are provided for Phase 1, it would seem likely that funds will also be found for Phase 2.

Generally, our advice to affected landowners is to hope for the best but to plan for the worst.

CAN IT BE CHANGED?

Once the Bill for Phase 1 has been given a Second Reading in Parliament, the principle of Phase 1 is determined but Parliament can still change the scheme. Parliament can also impose conditions on how the government and HS2 Limited will carry it out.

DO I NEED TO DO ANYTHING?

Whether you should do anything will depend upon (a) how serious the impact is on your property or interests and (b) an evaluation of your prospects of achieving a worthwhile change. This could be an alteration to the works or to the terms upon which they may be carried out or of the land required for them.

If you are directly affected, you will almost certainly be entitled to receive compensation. Whether it is worth taking action should therefore also depend upon whether you consider the compensation rules to be adequate in your circumstances.

HOW MIGHT I BE AFFECTED?

There are many ways in which you may be affected, depending on your circumstances. Examples of situations which could arise where we have assisted cases on other schemes include:

• excessive amount of land being taken;
• part only of your land being taken and the effect of this on the remainder;
• physical damage to your property, if not taken;
• the impact of temporary possession of some of your land during construction;
• getting land back if it is not all needed;
• blight;
• crystallisation of negative equity;
• harm to your business;
• construction traffic and other adverse impacts on the amenity of your property
• problems of relocating;
• tax consequences of compulsory purchase; and
• inadequate compensation in certain circumstances.

A feature of the compensation rules is that they are generic in nature so that they can apply to different circumstances. This does not mean that they work satisfactorily or fairly in all situations. Compulsory purchase can have unforeseen and unintended consequences.

WHAT IS THE PROCESS?

There are to be three Bills in Parliament. The first is a 'paving Bill' (the High Speed Rail (Preparation) Bill) to authorise long term government expenditure on the project. This has already been introduced and is currently before the House of Commons. The second is the Bill to authorise the Phase 1 works and the compulsory acquisition of land for them. The third is a similar Bill for Phase 2.

All three Bills offer opportunities for lobbying the government and MPs on relevant generic issues. The Bills for Phases 1 and 2 will also afford affected landowners the opportunity formally to object to the proposals and to have their case heard by a Parliamentary Committee.

There are other important features of the overall process, including public consultations on the scheme and an assessment of its environmental impacts.

HOW DO I GET INVOLVED?

Consultation on HS2 has already occurred but there will be more. As a result of a judicial review of the consultation that took place on land compensation for Phase 1, a further consultation on this is currently taking place. It closes on 4 December 2013. Currently, there is also a consultation on the proposed routes for Phase 2. It closes on 31 January 2014.

We always recommend participating in any public consultation, even if you feel it may be on a foregone conclusion. No Promoter can be expected to understand all the impacts of their scheme. They need to be told and there may be something they can do to ameliorate your position. You have less reason to complain if you have not participated when given the opportunity to do so.

Various representative bodies and lobby groups are seeking generic changes, eg to the compensation rules. They need to be supported if they are to be effective. This may be all you want or feel you can afford to do. You can also lobby your MP.

If you need to do more than that, you can have your circumstances evaluated professionally by your land agent, lawyer or tax adviser. The government has published schemes for early acquisition of land in defined circumstances where the landowner requests it. If this is not a satisfactory option, you may need advice on how to negotiate a solution with HS2 Limited or on submitting a formal objection. This is not a daunting process and it allows you to present your case to Parliament, if a satisfactory solution to your objection is not agreed before then and if you have a case worth arguing.

Whatever representative organisations, businesses and individuals achieve in protecting their interests during the Phase 1 Bill is likely to set a template for how comparable situations will be dealt with when it comes to Phase 2.

WHAT CAN I HOPE TO ACHIEVE?

The extent to which the Promoters will be willing to negotiate either general changes or bespoke solutions to particular cases remains to be seen. It is usual for Promoters to have meetings with objectors to consider how their concerns might be addressed. Early engagement is usually more productive and less costly than leaving it late. This can lead to the Promoters entering into binding agreements with objectors or modifying their policy on how they will treat situations.

The sort of solutions that can be negotiated include:

• reduced land take;
• early buy-out;
• sale and rent back of affected property;
• adjustments to works and environmental mitigation;
• changes to position of work sites;
• shorter temporary possession;
• reduced impact of construction traffic;
• monitoring of physical effects on properties;
• repair of physical damage rather than compensation; and
• protection of your property when works are carried out close to it.

WHEN WILL IT HAPPEN?

The construction of Phase 1 is unlikely to start before 2017. The Bill for Phase 1 could take about two years to be enacted. There may then be a period of detailed design and the contractors will have to be commissioned. The aim is for HS2 trains to be running between London and Birmingham in 2026.

When the construction of Phase 2 can start will depend upon when the Bill for that phase is passed. That Bill will not be introduced before late 2015. It is also likely to take about two years to be enacted. The plan is for Phase 2 to open in 2032 or 2033.

AM I LOCKED IN? CAN I GET OUT?

You may already be suffering from the prospect of HS2, even if it does not count in law as blight. In the case of Phase 1, the government has formally safeguarded the route. If your land falls within the safeguarded area, it may qualify as blighted. You may be able to demand that your property be acquired from you now at its 'non-HS2' value. Where you cannot claim blight, your ability to sell or let your property may still be affected. The uncertainty may be preventing you from planning for the future as you would otherwise have been able to do.

HS2 Limited has already purchased by agreement a number of properties on the route. They may be willing to purchase yours. They may be able to give you some assurances. Otherwise, you could be in a predicament for a long time. You may want to take advice on your options.

BIRCHAM DYSON BELL LLP

We are a law firm with a team specialising in legislation, infrastructure planning, public affairs, compulsory purchase and all related land issues that affect businesses, estate owners, farmers and home owners. Three of our partners are accredited Parliamentary Agents.

We frequently work in tandem with land agents, other lawyers and other professionals in order to provide you with a complete service when the government promotes major projects in this way.

If you may want to engage our services and you are not already a client, contact any member of our Government and Infrastructure team or Ian McCulloch or Christopher Findley.

If we are given sufficient information about your circumstances, we will try to give you an initial evaluation of your case, without charge.

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.