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    The Law Commission

    (LAW COM No 286)


    Report on a reference under section 3(1)(e) of the Law
    Commissions Act 1965
    Presented to the Parliament of the United Kingdom by the Lord High Chancellor
    by Command of Her Majesty
    December 2003
    Cm 6071 £xx.xx
    The Law Commission was set up by the Law Commissions Act 1965 for the purpose of promoting the reform of the law.
    The Law Commissioners are:
    The Honourable Mr Justice Toulson, Chairman
    Professor Hugh Beale QC
    Mr Stuart Bridge
    Professor Martin Partington CBE
    Judge Alan Wilkie QC
    The Chief Executive of the Law Commission is Mr Michael Sayers and its offices are at Conquest House, 37-38 John Street, Theobalds Road, London WC1N 2BQ.
    The terms of this report were agreed on 5 November 2003.
    The text of this report is available on the Internet at:

    Abbreviations Abbreviations
    Case References Cases
    Executive Summary Summary
    Terms of reference 1.1
    Background to this Report 1.2
       The existing law 1.2
       CPPRAG Review 1.3
       Work since the CPPRAG Review 1.6
       Government policy 1.13
       Planning and Compulsory Purchase Bill 2002/03 1.18
       The Law Commission's approach 1.26
          Sorting out the law 1.29
          Policy framework 1.30
          Preserving the balance 1.31
          No draft Bill 1.35
    Outline of the Compensation Code 1.37
    Acknowledgements 1.44
    The right to compensation 2.1
       Introduction 2.1
          Extent of the right 2.1
          Date for identification of interests 2.2
          "Qualifying interests" 2.6
       Consultation 2.7
       Rule 1 2.8
    Basis of compensation 2.9
       Introduction 2.9
       Consultation 2.14
       Structure of the Code 2.18
       Rule 2 2.21
    Head A: Market value 3.1
       Introduction 3.1
       Consultation 3.3
          Willing buyer 3.4
          Not less than nil 3.9
       Rule 3 3.12
    Head B: Injury to retained land 3.13
       Introduction 3.13
          Severance and injurious affection 3.13
          Betterment 3.16
          Other valuation rules 3.18
       Consultation 3.20
          Market value only? 3.20
          Use of hindsight 3.25
          "Before and after" 3.30
          Betterment 3.31
          Definition of retained land 3.32
          Contractors' negligence 3.33
          Other points 3.34
       Rule 4 3.35
    Head C: Consequential loss 4.1
       Introduction 4.1
          Existing law 4.1
          Consultation proposals 4.3
       "Disturbance" or "consequential loss" 4.4
          The Wrexham case 4.8
          The Dublin case 4.12
          Comments 4.15
       Particular issues 4.18
          Wording of the general rule 4.20
          Personal circumstances and mitigation 4.27
          Relocation versus extinguishment 4.31
          Replacement of buildings 4.39
          Starting date for disturbance compensation 4.40
       Rule 5 4.42
    Head D: Equivalent reinstatement 4.43
       Introduction 4.43
       Consultation 4.46
       Rule 6 4.53
    Introduction 5.1
    Prospects of lease renewal 5.2
    Rehousing obligations 5.9
    Illegal uses 5.10
       The scope of the rule 5.10
       Consultation 5.13
       Rule 7 5.18
    New interests and enhancements 5.19
    Consistency 5.20
       Rule 8 5.23
    Mitigation 5.24
       Rule 9 5.26
    Fixing the valuation date 6.1
       Introduction 6.1
          Valuation of interests in land 6.1
          Consequential loss 6.3
          Equivalent reinstatement 6.5
          Facts known to the tribunal 6.6
       Consultation 6.7
       Rule 10 6.7
    Disregards 6.8
       Introduction 6.8
       New interests and enhancements 6.9
       Rule 11 6.12
       Rehousing obligations 6.13
          Introduction 6.13
          Discussion 6.16
       Rule 12 6.18
    Introduction 7.1
       The no-scheme rule 7.1
       Clearing the decks 7.4
       The policy rationale 7.7
    The new code – principles 7.9
       General approach 7.9
       Principal features of the new Code 7.12
          Key elements retained 7.12
          Main problems of the existing law 7.13
          Main changes 7.14
    Consultation 7.15
       The statutory project rule 7.16
          Preferred version of the rule 7.16
          Depreciation due to planning blight 7.19
          Commercial interests 7.22
          Defining the project 7.26
          The cancellation assumption 7.29
          Ransom strips 7.34
          Special statutory designations 7.38
          Blight and purchase notices 7.44
       Other heads of compensation 7.46
          Injury to retained land 7.46
          Consequential loss 7.48
       Planning status 7.50
          Consultation paper 7.50
          Responses 7.53
          Area of planning assumptions 7.55
          Assumed permission for the authority's development 7.56
          Appeal against certificate of alternative development 7.59
    Introduction 8.1
    The new Rules 8.3
    The new Rules annotated 8.4
       13 The statutory project and blight 8.4
       13A Other heads of compensation 8.19
       14 Planning status 8.23
       14A Alternative development certificate 8.27
    Provisions not replaced 8.32
       Third schedule rights 8.32
       Subsequent planning permissions 8.35
       Rule 15 8.39
    Acquisition of new rights 9.1
       Rule 16 9.5
    Interference with rights 9.6
       Introduction 9.6
       Consultation 9.10
       Rule 17 9.12
    Compensation for minor tenancies 9.13
       Introduction 9.13
       Rule 18 9.17
    Advance payments 10.1
       Introduction 10.1
       Consultation 10.5
       Rule 19 10.9
    Lands Tribunal jurisdiction 10.10
       Rule 20 10.11
    Interest 10.12
       Existing law 10.12
          Date from which interest runs 10.12
          Amount of interest 10.15
       Commentary in the consultation paper 10.16
       Consultation 10.20
          Date from which interest runs 10.20
          Amount of interest 10.22
          Finance costs 10.25
          Professional fees 10.27
       Rule 21 10.28
    Compensation for depreciation caused by public works 11.1
       Introduction 11.1
       Existing law 11.3
          Section 10 of the 1965 Act: injurious affection due to the  
          construction of public works 11.4
          Part I of the 1973 Act: injurious affection due to the use  
          of public works 11.8
       Consultation proposals 11.11
       Consultation 11.15
       Conclusion 11.19
       Recommendation 11.23
    Compensation – standard provisions 1
    General rules 7
    Valuation date 10
    Matters to be disregarded 11
    Planning status 14
    Particular interests 16
    Incidental matters 19
    Compensation where no land is acquired 22
    Introduction C.1
    Historical context C.2
       The 1845 Act C.2
       The Scott Committee and the 1919 Act C.5
       From 1945 to 1961 C.7
       From 1961 until today C.12
          Towards privatisation C.12
          Legislative change C.15
          The Human Rights Act C.18
    The law today C.24
       Sources of the current law C.25
          (1) Powers of compulsory purchase C.26
          (2) Making and authorisation C.29
          (3) Implementation C.31
          (4) Determination of compensation C.34
          (5) Compensation rules C.35
    Introduction D.1
       The "no-scheme rule" D.1
       Three phases of evolution D.5
    Phase (1): from 1845 to 1919 D.6
       The early cases D.6
          Value to the owner D.6
          Special adaptability D.8
          Special purchaser D.11
       From Lucas to Fraser D.13
          The English cases D.14
          The Canadian cases D.23
       The Scott Committee D.30
    Phase (2): from 1919 to 1959 D.34
       The Indian case (1939) D.34
       The Pointe Gourde case D.39
       The importance of Pointe Gourde D.43
    From the 1947 Act to 1959 D.48
       The 1947 Act D.48
       Case law D.50
    Phase (3): Modern development D.53
       The Town and County Planning Act 1959 D.53
          Government explanations D.55
       The Land Compensation Act 1961 D.57
          Section 6 and the no-scheme rule D.58
          Planning assumptions D.63
       The no-scheme rule in the Courts D.66
          (1) Assimilation of the judicial and statutory versions D.68
          (2) Judicial evolution D.73
          (3) The no-scheme world D.78
          (4) Decreases in value due to the scheme D.82
          (5) A valuation tool only D.84
          (6) The Indian case D.87
       Particular issues D.92
          (1) Limits of rule (3) D.93
          (2) Planning assumptions D.98
          (3) Ransom strips D.106
          (4) Disturbance D.110
          (5) Purchase notices D.112
    International comparisons D.113
       Commonwealth D.113
          Australia D.114
          Canada D.118
          South Africa D.120
       Other jurisdictions D.122
          California D.122
          France D.126
       Conclusion on international comparisons D.127
    Conclusion – the no-scheme rule today D.128
    Postscript – the Pentrehobyn case D.136
       A textbook example D.136
       Facts D.137
       Conclusion D.143

    the 1961 Act Land Compensation Act 1961
    the 1965 Act Compulsory Purchase Act 1965
    the 1973 Act Land Compensation Act 1973
    the 1981 Act Acquisition of Land Act 1981
    the 1990 Act Town and Country Planning Act 1990
    the ALRC Report The Australian Law Reform Commission Report No 14: Lands Acquisition and Compensation (1980)
    CP 165 Towards a Compulsory Purchase Code (1): Compensation (2002) Consultation Paper No 165
    CP 169 (2002) Consultation Paper No 169 Towards a Compulsory Purchase Code (2): Procedure
    CPPRAG Compulsory Purchase Policy Review Advisory Group, established by the Department of the Environment, Transport and the Regions
    the CPPRAG Review Fundamental Review of the Laws and Procedures Relating to Compulsory Purchase and Compensation: Final Report (July 2000)
    DETR Department of the Environment, Transport and the Regions
    Denyer-Green Barry Denyer-Green, Compulsory Purchase and Compensation (6th edition 2000)
    DTLR Department of Transport, Local Government and the Regions
    Horn v Sunderland Corp Horn v Sunderland Corporation (1941) 2 KB 26 the Indian case Vyricherla Narayana Gajapatiraju v Revenue Divisional Officer, Vizagapatam [1939] AC 302
    the LAA (Cth) Land Acquisition Act (Commonwealth) 1989 ODPM Office of the Deputy Prime Minister
    Overview Towards a Compulsory Purchase Code: (1) Compensation, An Overview (2002) Consultation Paper No 165
    Pointe Gourde Pointe Gourde Quarrying and Transport Co v Sub-Intendent of Crown Lands [1947] AC 565
    the Policy Statement Compulsory Purchase and Compensation: delivering a fundamental change (DTLR, December 2001)
    RICS Royal Institution of Chartered Surveyors
    Rugby Water Board Rugby Water Board v Shaw-Fox [1973] AC 202
    Scott Report Scott QC, Chairman), Cd 9229 (1918)
    Shun Fung Director of Buildings and Lands v Shun Fung Ironworks Ltd [1995] 2 AC 111
    Waters Waters v Welsh Development Agency [2002] 2 EGLR 107
    West Midland Baptist Birmingham Corp v West Midland Baptist (Trust) Association (Inc) [1970] AC 874
    Wildtree Hotels Wildtree Hotels Ltd v Harrow LBC [2001] 2 AC 1
    Abbey Homesteads Ltd v Secretary of State for Transport [1982] 2 EGLR 198
    Abbey Homesteads Ltd v Northants CC [1992] 32 RVR 110 CA
    Alfred Golightly & Sons v Durham CC (1981) 260 EG 1045
    Andreae v Selfridge & Co Limited [1938] Ch 1
    Argyle Motors (Birkenhead) Ltd v Birkenhead Corporation [1975] AC 99
    Aslam v South Bedfordshire DC [2001] RVR 65
    Aston Charities Trust Ltd v The Metropolitan Borough of Stepney [1952] 2 QB 642
    Bailey v Derby Corp [1965] 1 All ER 443
    Banham v Hackney LBC (1970) 22 P & CR 922
    Batchelor v Kent County Council (1990) 59 P & CR 357
    Begum v Tower Hamlets LBC [2002] 2 All ER 668; [2003] 2 AC 430
    Belfast Corp v OC Cars Ltd [1960] AC 49
    J A Bibby & Sons Ltd v Merseyside County Council (1980) 39 P & CR 53
    Bird & Bird v Wakefield MDC [1978] 2 EGLR 16 CA
    Birmingham City DC v Morris & Jacombs (1977) 33 P & CR 27
    Birmingham Corp v West Midland Baptist (Trust) Association (Inc) [1970] AC 874 ("West Midland Baptist")
    Blandrent Investment Developments Ltd v British Gas Corporation [1979] 2 EGLR 18
    Bolton MBC v Tudor Properties [2000] RVR 292
    Bolton MBC v Waterworth (1979) 37 P & CR 104
    BP Petroleum Developments Ltd v Ryder [1987] RVR 211
    British Westinghouse Electric Co Ltd v Underground Electric Rys [1912] AC 673
    Bromley LBC v LDDC [1997] RVR 173
    Buccleuch (Duke) v Metropolitan Board of Works (1872) LR 5 HL 418
    Bwllfa and Merthyr Dare Steam Collieries Ltd v Pontypridd Waterworks Co [1903] AC 426
    Camrose v Basingstoke Corporation [1966] 1 WLR 1100
    Cedar Rapids Manufacturing and Power Co v Lacoste [1914] AC 569
    Central Methodist Church, Todmorden (Trustees of) v Todmorden Corp (1960) 11 P & CR 32
    Clarke v Wareham and Purbeck RDC (1972) 25 P & CR 423
    Clift v Welsh Office [1999] 1 WLR 796
    CNR v Palmer [1965] 2 Ex CR 305
    Colac (President, etc of) v Summerfield [1893] AC 187
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    Cowper Essex v Acton Local Board (1899) 14 App Cas 153
    Crompton v Commissioner of Highways (1973) 5 SASR 301
    Cronin v Swansea CC [1972] RVR 428
    Davy v Leeds Corporation [1964] 1 WLR 1218; [1965] 1 WLR 445; [1964] 3 All ER 390
    Devotwill v Margate Corp [1969] 2 All ER 97; [1970] 3 All ER 864
    Director of Buildings and Land v Shun Fung Ironworks [1995] 2 AC 111 ("Shun Fung")
    Dubai Aluminium Co Ltd v Salaam [1999] 1 Lloyd's Rep 415, 465
    Dublin Corporation v Underwood [1997] 1 IR 117
    East End Dwellings Co Ltd v Finsbury Borough Council [1952] AC 109
    Edwards v Minister of Transport [1964] 2 QB 134
    Efstathiou v Greece 10 July 2003 App No 55794/00
    Re Elm Avenue, New Milton [1984] 1 WLR 1398
    Emslie & Simpson Ltd v Aberdeen DC [1994] 1 EGLR 33
    English Property Corp v Kingston LBC (1999) 77 P & CR 1
    Fletcher Estates (Harlescott) Ltd v Secretary of State for the Environment, Transport and the Regions [2000] 2 AC 307
    Fraser v City of Fraserville [1917] AC 187, PC
    Fraser v R (1963) 40 DLR (2d) 707
    In re Gough and Aspatria, Silloth and District Joint Water Board [1904] 1 KB 417
    Glover v Edmonton Corp (1953) 3 P & CR 451
    Grampian Council v Secretary of State [1983] 1 WLR 1340
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    Grosvenor Hotel Co v Hamilton [1894] 1 QB 836
    Guillemin v France (1997) 25 EHRR 435
    Hackney LBC v MacFarlane (1970) 21 P&CR 342
    Halstead v Manchester City Council [1998] 1 EGLR 1, CA
    Hammersmith and City Railway Co v Brand (1869) LR 4 HL 171
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    Harrison and Hetherington Ltd v Cumbria County Council (1985) 50 P & CR 396
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    Harwich Dock Co Ltd v IRC (1978) 76 LGR 238
    Ozanne v Herts CC [1991] 1 WLR 101
    Holt v Gas, Light & Coke Co (1872) LR 7 QB 728
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    Hoveringham Gravels Ltd v Chiltern DC (1978) 35 P&CR 295
    Hubertus Rifle Club v Commonwealth (1995) 130 ALR 447
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    IRC v Clay & Buchanan[1914] 3 KB 466
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    Compulsory purchase and the compensation code
    The current law of compulsory purchase is a patchwork of diverse rules, derived from a variety of statutes and cases over more than 100 years, which are neither accessible to those affected, nor readily capable of interpretation save by specialists. The case for reform has been recognised for many years. In July 2000, the Compulsory Purchase Policy Review Advisory Group ("CPPRAG"), which had been established by the DETR, reported that the law was "an unwieldy and lumbering creature" and made a number of recommendations for detailed improvements to the law. In particular, it proposed that the Law Commission should be asked to prepare new legislation which would both set out standard procedures and contain a clearly defined Compensation Code. The Lord Chancellor subsequently approved terms of reference, requiring the Commission to review the law relating to compulsory purchase of land and compensation, and to make proposals for simplifying, consolidating and codifying the law.
    Two Consultative Reports were published in 2002. The first (CP 165) dealt with Compensation; the second (CP 169) with Procedure. This Report carries forward the issues covered by the first Consultative Report, makes final recommendations for the reform of the law relating to compensation for compulsory purchase, and sets out the basis for a Compensation Code. We intend to publish a further Report in 2004 on compulsory purchase procedure, dealing with the issues contained in the second Consultative Report.
    Although the Report does not contain a Bill, it presents a Compensation Code as an indicative framework for possible future legislation. The "Code" is designed to maintain, and build on, the main features of the existing law within a simpler and more logical structure, using more accessible labels. Its essential objective is clarification of principle. Clarity, consistency, and accessibility should reduce the time expended on legislative interpretation, facilitate and expedite negotiated settlements, and enable the Lands Tribunal to concentrate on disputes of fact and valuation, not law. In view of the policy changes already proposed by CPPRAG and DETR, we have regarded our primary task as related to form, rather than substance. However, the Code is not simply a restatement. We have proposed amendments where necessary to remove unfairness or anomalies.
    The right to compensation and how it is to be assessed
    The Code commences with a clear statement of entitlement confirming that any person ("the claimant"), from whom an interest is acquired (or whose interest or right in land is extinguished or overridden) by compulsory purchase, is entitled to compensation. The assessment of compensation is made in accordance with the underlying principle of "fair compensation", having regard to four heads (based on traditional principles): market value of the acquired land; injury to retained land; consequential loss; and (where the tests are fulfilled) equivalent
    market value
    Market value, under the first head, is the amount which the land might be expected to realise if sold in the open market by a willing seller to a willing buyer. (The amount cannot be less than nil.) This rule follows the existing law, and existing case-law will continue to be relevant.
    injury to retained land
    The claimant is also entitled to compensation for the reduction in value of other land previously held with the acquired land ("retained land"). This encompasses two largely distinct categories of compensation, long recognised under existing law: first, for the effect of the severance of the acquired land from the retained land ("severance"); and secondly, for the effect of the works on the retained land , both during construction and subsequently ("injurious affection"). Compensation is measured by the decrease in the market value of the retained land. Any increase in value of any retained land must be off-set, as "betterment", against the decrease due to severance or injurious affection. (We have taken account of a recommendation of CPPRAG, accepted by Government, that such betterment should be off-set only against severance or injurious affection, and not against other heads.)
    Consequential loss
    The claimant may have suffered consequential loss which is not reflected in the sums attributable to the loss of the land acquired or to the reduction in value of any land retained. Typical examples are removal expenses, temporary loss of profits of a business, and legal or other professional costs reasonably incurred by the claimant in connection with the acquisition.
    We have used the term "consequential loss", rather than the traditional term "disturbance", to make clear that compensation is not necessarily confined to loss suffered by disturbance of occupation. This reflects case law under section 5(6) of the Land Compensation Act 1961. In general, the Code permits recovery of all losses, not reflected in the value of land, which are the natural and reasonable consequence of the compulsory purchase and not too remote.
    There are special rules concerning displacement of businesses. The normal rule is that compensation is paid on "the relocation basis" (including loss of profits and incidental costs of relocation), provided relocation is reasonably practicable and genuinely intended, and the cost is not unreasonable. Where a higher price is paid for the relocation premises, there is a presumption of "value for money" (as under the existing law.
    Where relocation is impracticable, the claim may be on "the extinguishment basis", reflecting the value of the business as a going concern. To remove a possible doubt under existing law, it is made clear that, in determining whether compensation should be assessed on a relocation or extinguishment basis, the claimant's personal circumstances, including financial circumstances, are to be taken into account.
    Equivalent reinstatement
    Compensation may be exceptionally assessed on the "equivalent reinstatement" basis, where the acquired land has been adapted and used for purposes for which there is no general market, and where reinstatement in some other place is genuinely intended. (For instance, the land may be used as a church or other place of worship.) In such cases, the claimant may seek to be compensated for the reasonable cost of the reinstatement. The Tribunal has a residual discretion to refuse compensation on that basis, where the cost of reinstatement is disproportionate having regard to the likely benefit to the claimant. This rule reflects existing law. However, we include a new provision, enabling the authority to impose conditions to ensure that the compensation is used for its intended purpose.
    General rules
    We retain three incidental rules, recognised by existing law: first, the "illegality" principle, that any element of value or loss attributable to a use which is contrary to law is to be disregarded (subject to a new, but limited discretion for the Tribunal to disapply the rule having regard to the nature of the breach); secondly, the "consistency" principle, that where the land is valued on the basis of potential for development or change of use, compensation is not allowed for loss or damage that would necessarily have arisen in realising that potential; and, thirdly, the "mitigation" principle, that compensation is liable to be reduced where the authority shows that the claimant failed to mitigate his loss.
    Date of valuation
    The cases establish that land is to be valued at the date of when compensation is agreed or determined, or if earlier the date when possession is taken by the authority. The Code takes that as the basic rule for deciding all issues relevant for compensation, including physical and planning circumstances, save as otherwise provided. Again reflecting existing case-law, compensation for consequential loss is assessed by reference to the circumstances known or anticipated at the date of assessment; and compensation on the equivalent reinstatement basis is assessed by reference to the date on which reinstatement becomes reasonably practicable.
    Disregard of the statutory project and planning status
    Relatively straight-forward to state, but often very difficult to apply, the principle of project disregard (otherwise known as the "no-scheme" or "Pointe Gourde" rule) is one of the most complex issues in compulsory purchase law. The problem arises mainly from the lack of consistency in the many formulations of the rule, in statute and case-law. Essentially, assessment of compensation payable for the acquired land should not take account of any increases or decreases in value attributable to the statutory project or scheme for which the land is acquired. Under the existing law, this has required consideration of the state of affairs which would have existed had there never been a scheme of acquisition. The proper identification of "the scheme" may then become the source of dispute between the claimant and the acquiring authority; as may "the rewriting of history" in the "no-scheme world", sometimes over many years.
    The Report notes the unanimity among respondents for the need to "clear the decks", by replacing all existing formulations, by a single set of statutory rules. In an attempt to clarify its operation, the Report seeks to redefine the purposes of the rule, which differ in relation to the effects respectively on claimants and acquiring authorities. The proposed Code contains a new set of rules, based on "the statutory project", the definition of which follows our "preferred version" of previous formulations. The room for speculation is limited by use of the "cancellation assumption" (approved by the House of Lords in relation to planning assumptions); that is, the position is considered as though the project were cancelled at the valuation date, rather than as though there never had been such project or any indication of it.
    The rules for planning assumptions are treated separately. They follow the general approach of the existing law. Account is taken of any planning permissions in force at the valuation date, as well as the future prospect of any other such planning permissions. Account is also taken of the value of any appropriate alternative development (that is development of a type which, applying the cancellation assumption, might reasonably have been expected to be permitted on an application considered on the valuation date). The main difference from the existing law is that there is no automatic assumption of permission for the authority's own proposals, unless it has been granted, or would have been granted, to a private developer.
    We follow the existing law, by providing for an application for an alternative development certificate from the local planning authority, and the likely conditions obligations or requirements of such permission. An important change is that the right of appeal against a certificate would be to the Lands Tribunal, rather than to the Secretary of State (or National Assembly for Wales). This is designed to ensure that the Tribunal is the ultimate arbiter of all issues relevant to compensation, and also to avoid the possibility of the appeal agency being judge in its own cause (as may happen, for example, in relation to a road scheme promoted by the NAW).
    Acquisition of new rights and interference with existing rights
    Where the acquiring authority obtains a new right over land of the claimant, compensation will be assessed having regard to any depreciation in the market value of the claimant's land (not only the land over which the right is acquired, but also any other land whose value is reduced) and any consequential loss.
    The Code also recognises the right to compensation of those persons whose rights over the acquired land (such as easements or restrictive covenants) are overridden by carrying out the project. Compensation will be assessed by reference to the reduction in the market value of the land to which the right is attached, and any consequential loss. (The provision for consequential loss in this case is an innovation, to ensure consistency with the other rules.)
    Depreciation caused by public works
    Under a provision going back to 1845, adjoining owners, whose land is not acquired but is adversely affected by the construction of the statutory works, have a right to compensation for "injurious affection", but only if they would have had a claim at common law. In 1973, a new statutory right was created for compensation for depreciation to adjoining land caused by the use of statutory works, not subject to the same restriction.
    We propose that the two rights should be merged in the 1973 Act, to create a right to compensation for what we call "depreciation caused by public works". We propose to deal with this subject separately from the Code, because it is not strictly part of compulsory purchase law. Entitlement to compensation for injurious affection does not require any land to have been compulsorily acquired, and the losses being compensated are due, not to compulsory purchase as such, but to the statutory works.
    Compensation for construction will follow the existing law, save that the claim is not limited to decrease in the value of land, but may include consequential loss such as temporary loss of profits. (This is an innovation intended to achieve greater consistency with the rules applying where land is acquired.) Compensation for the adverse effects of use of the works, will continue to be based on the 1973 Act, subject to some detailed amendments proposed by CPPRAG.
    Ancillary matters
    We recommend that additional jurisdiction be vested in the Lands Tribunal to determine any claim relating to damage to land or the use of land where it arises out of substantially the same facts as a compensation claim referred to it. This is principally to avoid arguments about the correct forum for dealing with cases arising out of negligence in carrying out the statutory works.
    The rules for interest on compensation are based on the existing law, but allow more flexibility to take account of the fact that different heads of loss may be suffered at different times. The general rule, as now, is that interest is payable on compensation from the date when the authority takes possession, at a rate prescribed by statute. We recommend, however, as a change to the existing law, that the Lands Tribunal should have discretion to award interest at a higher or lower rate to reflect unreasonable conduct on the part of either party.
    Claimants will continue to be entitled to advance payments on account of compensation, in accordance with sections 52 and 52A of the Land Compensation Act 1973. However, we propose a new statutory procedure in the County Court, on judicial review principles, by which the obligations of the authority in this regard may be better enforced.

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