The Law Commission of England and Wales has announced a review of the legislation governing compulsory purchase, in order to make the law simpler, consistent and more accessible.
The government-backed review will look at how outdated laws could be modernised to ensure they are fit for future development projects, support critical infrastructure needs and deliver for local communities.
“Compulsory purchase orders are essential to delivering large-scale projects – from critical infrastructure to housing developments and environmental plans,” said public law commissioner Nicholas Paines KC.
“It is important that the legislative regime is effective, consistent and clear to both landowners and acquiring authorities – but the current laws are fragmented and complex, often leading to uncertainty and unpredictability.
“Our project will help to ensure that the law governing compulsory purchase is modernised and simplified, so that it can better support future projects at a local and national level.”
The Law Commission has been asked to carry out the review by the Department for Levelling Up, Housing and Communities, following concerns that the law of compulsory purchase in England and Wales is fragmented, hard to access and in need of modernisation. The review also follows the government’s commitment in its 2022 white paper Levelling Up the United Kingdom to enhance compulsory purchase powers.
In the new review, the Law Commission will examine the technical laws concerning the procedures governing the acquisition of land through compulsory purchase orders and the system for assessing the compensation awarded to parties in relation to such acquisitions.
Preliminary research will begin in early 2023, including analysis of earlier 2003 and 2004 Law Commission reports on compulsory purchase, as well as pre-consultation engagement with stakeholders and analysis of the current law.
Levelling up minister Dehenna Davison said: “Giving councils the right tools to drive forward regeneration across our towns and cities and deliver much-needed new homes is essential to our levelling-up mission. I am very pleased the Law Commission will review compulsory purchase law to make sure current rules are fit for purpose and councils have greater confidence on when and how they can use these powers.
“The measures we are taking forward through the Levelling-up and Regeneration Bill will also improve the process and help ensure that fair compensation is paid.”
Raj Gupta, partner at Town Legal LLP and an elected director of the Compulsory Purchase Association leading a working group on law reform, said compulsory purchase compensation law is spread over numerous Acts of parliaments, statutory instruments and decisions by the courts, “making it inaccessible and incomprehensible to non-specialists”.
He added: “The aim must be for the commission to produce drafting for a consolidating parliamentary bill which will set out compulsory purchase law in a clear, consistent manner and in modern language. A key area for modernisation is the law on injurious affection (where part of a claimant’s land is acquired and the remainder is adversely affected by the loss of the land and the project built on it). The law is currently contained in a single sentence in statute fundamentally unchanged since 1848, which has been interpreted in various ways by the courts ever since.
“A challenge for the commission will be how they tackle attempted piecemeal reform of the system by the current government, including the changes to statutory interest on unpaid compensation and regulation of temporary possession – enacted in 2016 and 2017, respectively, but still not brought into force – as well as the current ill-advised proposals under the Levelling-up and Regeneration Bill which seek to allow acquiring authorities to pay less than market value for land with hope value.”
David Wood, senior associate at Hogan Lovells LLP, cautiously welcomed the announcement, 20 years on from the Law Commission’s previous reviews on the subject, and expressed the hope that this time the project would lead to more comprehensive reform.
“Despite of practitioners calling for its consolidation, codification and simplification, the law underpinning the compulsory purchase system remains complex, fragmented and in need of modernisation,” Wood said.
“The Law Commission’s recommendations for the reform of the compensation framework will be awaited particularly keenly – especially in the context of the government’s own significant proposals for the reform of compensation and its stated desire to ensure that ‘fair compensation is paid’. Its summer 2022 proposals to rein in the ‘hope value’ element of compensation to improve viability and maximise public benefits are controversial, raise a number of important questions and conflict with the longstanding and fundamental principle of equivalence.
“Improvements to compulsory purchase are long overdue, and to that end it’s positive that the government has commissioned this review. It remains to be seen, though, whether the Law Commission’s recommendations form the basis of much needed systemic reforms to compulsory purchase or whether, as has unfortunately been the case to date, any changes take the form of incremental tweaks.”
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