Explanatory note

These Regulations set out the procedure for applications for directions for additional compensation and claims for additional compensation under sub-paragraphs 1(2) and (5) respectively of Schedule 2A to the Land Compensation Act 1961 (c. 33) (“the Act”). They make provision about steps that must be taken for the purposes of publicising or giving notice of a direction for additional compensation; for interest to be applied to amounts of additional compensation that are payable; and about how or when additional compensation (and any interest) is to be paid. They also make provision for additional compensation to include costs and, where applicable, an additional amount to make good qualifying losses and set limits on what such losses may include.

Part 2 sets out the procedure for applications for directions for additional compensation. A direction for additional compensation is a direction that must be made by a confirming authority (the Secretary of State) in certain circumstances and as provided for by paragraph 1 of Schedule 2A to the Act where land has been compulsorily acquired and the relevant compulsory purchase order (“CPO”) included a direction under section 14A of the Act (cases where prospects of planning permission are to be ignored). The circumstances are where the acquiring authority has not used the land materially in accordance with the statement of its intention that it provided on confirmation of the CPO, where either 10 years from the CPO’s confirmation has expired or there is no longer any realistic prospect of the statement being fulfilled, and where the initial direction under section 14A would not have been confirmed if the statement of intentions had reflected what has in fact been done with the land since its acquisition.

Regulation 3 and the Schedule provide for what applications for a direction for additional compensation should contain.

Regulation 4 provides for steps as to notification that the confirming authority must take when it considers an application for a direction for additional compensation it has received is invalid.

Regulation 5 provides for steps as to notification that the confirming authority must take when it receives a valid application for a direction for additional compensation. Regulation 5(3) provides that a party which is notified about an application may make written representations about the application’s validity and whether the conditions for making a direction for additional compensation have been met. It also sets out the time periods after which written representations may be disregarded by the confirming authority.

Regulation 6 provides for the applicant to make further representations in response to written representations and sets out time periods after which the confirming authority may disregard any written representations and when it must send written representations to the applicant.

Regulation 7 provides for the people that the confirming authority must notify about its decision and what the notification must contain.

Regulation 8 sets out steps that the acquiring authority must take to publicise that the confirming authority has made a direction for additional compensation.

Part 3 provides for claims for additional compensation. Where a direction for additional compensation is made, any person who was eligible for compensation in respect of the original compulsory acquisition may apply for additional compensation if the amount of the compensation they originally received (“the original amount”) would have been greater if the section 14A direction had not been made. Paragraph 2 of Schedule 2A to the Act provides that the amount of additional compensation payable is the difference between the amount that would have been assessed as due in compensation had no section 14A direction been made and the original amount.

Regulation 9 sets out the procedure for making a claim for additional compensation.

Regulation 10 provides for additional procedure where the land in question was subject to a mortgage and part of the mortgage debt remains unpaid.

Regulation 11 sets out the procedure that the acquiring authority must follow on receipt of a claim for additional compensation.

Regulation 12 provides for additional compensation to include an amount payable for “qualifying losses”. “Qualifying losses” are defined in paragraph 6 of Schedule 2A to the Act as financial losses shown to have been suffered by an eligible person as a result of the compensation initially payable to the eligible person in respect of the acquisition being of the original amount rather than the alternative amount it would have been without a section 14A direction. This regulation sets limitations on qualifying losses.

Regulation 13(1) provides that certain costs may be included in a claim for additional compensation. Regulation 13(2) applies section 4 of the Act (costs) with modifications so that valid claims for additional compensation are to be treated for costs purposes like unconditional offers to accept any sum in compensation. The effect is that there may be costs consequences for claimants where the Upper Tribunal (Lands Chamber) awards any sum in respect of a dispute under section 1 of the Act that is no greater than any amount offered by the acquiring authority as additional compensation and for the acquiring authority where the Upper Tribunal (Lands Chamber) awards any sum that is greater than the amount set out in a valid claim for additional compensation.

Regulation 14 sets out the applicable rate of interest to be included in additional compensation claims and how it is to be calculated.

A full impact assessment has not been produced for this instrument as no, or no significant, impact on the private, voluntary or public sector is foreseen.