Paragraph 3 Third party compensation: persons affected by the application of section 38(6) of the Act

(1)

Subject to sub-paragraph (4), the amount of any compensation payable to persons whose default event provisions^f1 were affected by the application of section 38(6) of the Act (by virtue of paragraph 6 of the Transfer Instrument) must be determined by the independent valuer in accordance with this paragraph.

(2)

The amount of any compensation payable to a person must be such compensation as may be fair and equitable in respect of the effect on that person’s property, rights or liabilities of the application of section 38(6) of the Act.

(3)

In determining any compensation payable, the independent valuer must take into account—

(a)

any diminution in the value of the person’s property or rights; or

(b)

any increase in the burden of any liability on that person,

which is attributable to the application of section 38(6) of the Act.

(4)

Compensation is payable only if it is required to be paid to comply with the Convention rights (within the meaning of section 1 of the Human Rights Act 1998^f2).

Annotations

Footnotes

f1: “Default event provision” is defined in section 38(1) of the Act.
f2: 1998 c.42.