Grants and compensation

General principles

The compulsory purchase system is based on the general principle that an owner of land or rights compulsorily acquired or interfered with is entitled to compensation and should be no worse or better off in financial terms following the acquisition.

The assessment of compensation will take into account the value of the property, disregarding the influence of the compulsory purchase order (CPO) and the value of related effects.

The amount of compensation cannot exceed the total financial loss. The claimant has a duty to mitigate its loss. See Practice Note: Compulsory purchase—compensation.

Compensation Code

The Compensation Code is the collective term used to describe the legislation and case law governing the procedures for compensation following compulsory purchase.

The main statutes are the Land Compensation Acts and the Compulsory Purchase Act 1965 (CPA 1965).

Basis for compensation

There are five principal potential elements of a claim for compensation:

•
the value of the land taken
•
severance and/or injurious affection
•
disturbance and other losses not directly based on the value of the land
•
home loss payments, and
•
fees

Land

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Latest Planning News

Law Commission launches consultation on reforms to compulsory purchase laws

The Law Commission has published a consultation paper as part of its review of current compulsory purchase and compensation laws in England and Wales. Building on its reports from the early 2000s, the paper seeks to address the fragmented and outdated nature of the legal framework. This follows a request from the Ministry of Housing, Communities and Local Government, with the Commission tasked with drafting a Bill to consolidate, codify, and modernise the existing legislation. The paper is divided into three key sections, comprising 106 questions. The first section, Chapters 2-5, examines procedural aspects of compulsory purchase, the second section, Chapters 6-11, focuses on compensation-related issues, and the final section, Chapters 12-15, addresses supplementary matters. The consultation closes on 31 March 2025.

Chief Planner’s second planning update newsletter for December 2024 published

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Court of Appeal confirms the considerations and requirements for re-determination of a previously quashed approval of a DCO (Save Stonehenge World Heritage Site v Secretary of State for Transport)

Planning analysis: In Save Stonehenge World Heritage Site v Secretary of State for Transport, the court had to consider whether the process of redetermining a development consent order (DCO) previously quashed by the court had been conducted fairly and properly. It confirmed that public decision making involved in the DCO procedure is not a form of litigation. As such, the statutory process and common law principles of procedural fairness do not dictate that issues must always be considered by an inquisitorial process. Where there is not a statutory requirement for an inquisitorial process (such as on redetermined DCOs), claimants need to demonstrate that there was a particular need for evidence to be interrogated such as between independent experts on the issues under further consideration. Moreover, for claimants to prove procedural unfairness they must show that they have suffered material prejudice. Neither were established in this case.