CPO: powers, procedures and pitfalls
First printed in Estates Gazette on 4 May 2013
Compulsory purchase powers can be viewed as a sensible tool enabling certain bodies to carry out their statutory duties efficiently. An alternative view is that they are a set of draconian powers implemented to the detriment of landowners, interfering with their fundamental rights to property.
This first article in a series of two looks at the procedures associated with these controversial powers and the potential pitfalls even where no objections are voiced by interested parties. The second article will look at what happens when objections are received to the making of an order and how to deal with individuals or action groups who are obstructing the process.
What, why and when
Compulsory purchase powers enable certain bodies that need to acquire land (or rights over it) to do so without the consent of the owner. Many bodies with statutory powers have compulsory acquisition powers prescribed by Acts of Parliament for the purposes of enabling functions that Parliament deems to be in the public interest.
The greatest users of compulsory purchase powers are local authorities; other statutory bodies with such powers include the Highways Agency, government departments, infrastructure companies, and notably, major utilities companies.
A utility company that intends to, say, lay pipelines or install cables underground will likely attempt to acquire the necessary rights by reaching an agreement with the landowner and other interested parties. It may, however, consider using its compulsory purchase powers where landowners are obstructive, cannot be identified, or are simply not engaging with the process.
The utility company may also consider starting the compulsory purchase procedure even while meaningful negotiations are ongoing. This will give it peace of mind by protecting the project timetable. In the event that negotiations are not fruitful, it will be able to fall back on the ongoing compulsory purchase procedure.
What land is involved?
The first stage of the compulsory purchase procedure is for the acquiring authority to determine the land to be compulsorily purchased, both in terms of the physical extent of the land and the rights that it requires in it. This may not be outright ownership; it might need instead new rights over the land, such as a right of way or the right to lay a pipeline.
Whatever the extent of the land and the interests sought, the acquiring authority will have to demonstrate that there is proper justification to support its compulsory acquisition. The powers to acquire compulsorily will be limited to the physical extent and the interests and rights included and described in the confirmed compulsory purchase order (CPO). Therefore, it is important that the acquiring authority is precise and detailed as to the boundary of the land and the rights it seeks.
The acquiring authority should then conduct an information gathering exercise to determine interests that will be affected by the exercise of its powers. This will give an initial indication as to the cost of the acquisition as it will be able to see the number of land interests affected, the nature of those interests, and, crucially, whether land is Crown land or other special categories of land that may require further special procedures. This may prompt the acquiring authority to change the boundaries of the land in which rights are sought.
Various registers and records should be consulted at this stage, including the Land Registry, council tax records, planning records, rating records and other registers held by the local authority. An inspection of the site itself should also take place.
Approval and referencing
The acquiring authority should now have the information it needs to proceed formally. If it is a local authority, this is done by a resolution of the council, unless delegated otherwise. A company will probably require a board resolution.
The acquiring authority will then be in a position to conduct a full referencing exercise. Using the information gathered at the preliminary stage, it will further collect and record detailed information on land ownership and occupation as necessary for making the CPO. This stage is one of the more crucial as it will inform the whole of the process from beginning to end.
If the acquiring authority wishes, it can send out statutory notices requiring the receiver to give information as to the ownership and occupation of the land. Besides its purpose as an information gathering tool, notices can be a useful prompt for landowners to engage with the process and hopefully be minded to settle the matter by agreement.
Drafting and making the order
The CPO and a statement of reasons are then drafted using the information gathered. The schedule to the order is compiled with details of the land interests affected, and the land and rights to be acquired are described in the order by reference to an accompanying map.
The statement of reasons will support the application to the relevant confirming authority by setting out the justifications for making the order. Among other particulars, such as the deliverability of the project and the planning position of the site, the statement should give details of any special considerations affecting the land, including listed buildings or conservation areas.
Once the order is made by the acquiring authority, notices are published in the local newspaper, affixed on the land and served on persons with qualifying land interests. Qualifying persons are also served with the statement of reasons. Copies of the CPO and the order map are deposited locally for inspection, often in a local library.
The order is then submitted. After a period of 21 days, if no objections to the making of the order have been made, the relevant confirming authority may choose to confirm the order. Further notices are then placed, served, and affixed. A period of six weeks is left to pass to allow for any applications to the High Court by aggrieved persons querying the validity of the order.
It is only at this point that the acquiring authority will generally look to securing possession and title to the land; a process that in itself can take some time.
Quirks, difficulties and pitfalls
Special category land
Any special category land should have been identified during the referencing exercise and noted in the schedule to the order and the statement of reasons. These types of land are afforded protection against being compulsorily purchased. They include: land owned by the National Trust; land owned by a local authority; land owned by a statutory undertaker for the purposes of its undertaking; and land forming part of a common, open space, fuel or field garden allotment. "Open space" is defined very widely as land used for the purposes of public recreation.
The protection is provided by affording the landowners additional rights to resist the exercise of the acquiring authority's powers. Where the land is owned by the National Trust and it objects to the order, then the order will be subject to special parliamentary procedure. This is likewise the case where land belongs to a local authority or statutory undertaker, unless the acquiring authority is also a local authority or statutory undertaker.
Where the land forms part of a common, open space, fuel or field garden allotment, the appropriate minister must consider the application and may issue a certificate. If the minister does not issue the certificate, special parliamentary procedure will apply.
If special parliamentary procedure applies, a public inquiry is held in the same way as when an objection is made. The order must then be laid before Parliament by the confirming minister.
At various points in the compulsory purchase procedure, notices must be published, served on qualifying persons and affixed to the land. If this is not done in accordance with statute, the confirming authority may not confirm the order or, if confirmed, the order could be challenged at the High Court. It is therefore extremely important that the referencing stage has identified all interested parties as may reasonably be expected and that the strict rules of service are complied with.
Where the acquiring authority has not identified who the landowners are, particular care must be taken in the publication of the notices and the affixing of notices to the land. Once the authority is in a position to commence securing title, it will be required to show that reasonable efforts have been made to identify and notify any absent or unknown parties.
It can be seen therefore that despite appearing only a preliminary stage of the process, the information gathering and referencing exercise is absolutely key to ensuring that the CPO does not encounter difficulties later down the line.
Why this matters
Compulsory purchase is a draconian right whereby land can be taken away from a landowner against their will. The process is widely used by public or statutory bodies that need to acquire land or rights over it. The procedures surrounding compulsory purchase are complex; rightly so, as the result of the process is to take land ownership or rights away from someone. Anyone reviewing the procedures involved in exercising compulsory purchase powers will realise that there are a number of hoops to jump through.
Even where there are no objections raised in respect of a proposed CPO, it still involves a very expensive and lengthy process before the acquiring authority can secure the land or the rights it needs. If the risk of negotiations falling through is apparent, or the landowners cannot be identified, it is advisable to commence the process as soon as practicable; it will be some time before entry onto the land is possible.
Commencing the information gathering and referencing stages of the procedure can put the landowner on notice, which itself is a useful tool for encouraging parties to come to the negotiating table. The relevant body should not, however, be complacent in its negotiations. This is not only because of the cost and time of running a full compulsory acquisition process, but also, as will be explored in the second of these articles, the confirming authority will want to see that all reasonable efforts have been made to secure the necessary rights outside of the compulsory purchase procedure.
It is clear that compulsory purchase is not a panacea or an easy fix. It is often simpler, faster and cheaper to reach an agreement with the landowner. While providing a safety net to protect a project timetable and useful as a means of moving negotiations forward, it should always be a process run in parallel to negotiating a private agreement.
Encyclopedia of Compulsory Purchase and Compensation, edited by CM Brand, Sweet & Maxwell
The Law of Compulsory Purchase G Roots, M Humphries, R Fookes, and J Pereira, (2nd ed), Bloomsbury Professional
John Bowman is a partner and Emily Murray is a paralegal in the planning, environment, energy and infrastructure teams at Field Fisher Waterhouse LLP
The second article in this series will appear in the 2 June edition of Estates Gazette