Environmental Protection Act 1990 - Part IIA Contaminated Land: statutory guidance edition 2

Compensation for Rights of Entry Etc

21 Under section 78G(2), any person (the "grantor") whose consent is required before any thing required by a remediation notice may be done must grant (or join in granting) the necessary rights in relation to land or the water environment. For example, an appropriate person may be required to carry out remediation actions upon land which he does not own, perhaps because it has been sold since he caused or knowingly permitted its contamination. Another example may be where access to adjoining land owned or occupied by the grantor's land is needed to carry out the necessary works.

22 The rights that the grantor must grant (or join in granting) are not some special statutory right, but a licence or similar permission of the kind which any person would need to enter on land which they do not own or occupy and carry out works on it. 23 Regulation 6 and Schedule 3 set out a code for compensation payable to those who are required to grant such rights and who thereby suffer detriment. The provisions are closely modelled on those which apply for compensation payable in relation to works required in connection with waste management licences.

Applications for Compensation

24 Under paragraph 2 of schedule 3, applications must be made by grantors within:

(a) twelve months of the date of the grant of any rights;

(b) twelve months of the final determination or abandonment of an appeal, or

(c) six months of the first exercise of the rights ,whichever is the latest.

25 Paragraph 3 requires applications to be made in writing and delivered at or sent by pre-paid post to the last known address of the appropriate person to whom the rights were granted. They must include a copy of the grant of rights and any plans attached to it; a description of the exact nature of any interest in the land concerned; and a statement of the amount being claimed, distinguishing between each of the descriptions of loss or damage in the Regulations and showing how each amount has been calculated.

26 Paragraph 4 of the Schedule sets out the various descriptions of loss or damage for which compensation may be claimed. Distinctions are drawn between the grantor's land out of which the rights are granted, any other land of the grantor which might be affected, and other forms of loss. They can be summarised broadly as

(a) depreciation: depreciation in the value of

(i) any relevant interest (that is, holding an interest in land as a result of which the grantor is able to make the grant) which results from the grant of the rights; or

(ii) any other interest in land, which results from the exercise of the rights;

(b) disturbance: loss or damage sustained in relation to the grantor's relevant interest, equivalent to the compensation for "disturbance" under compulsory purchase legislation; this might arise where for example there was damage to the land itself or things on it as a consequence of the exercise of the rights, or a loss of income or a loss of profits resulted from the grant of the right or its exercise;

(c) injurious affection: damage to or injurious affection of the grantor's interest in any other land (that is, land not subject to the grant of rights); this again is analogous to the compensation for "injurious affection" under compulsory-purchase legislation; this might arise where the works on the contaminated land had some permanent adverse effect on adjoining land; and

(d) abortive work: loss in respect of work carried out by, or on behalf of, the grantor which is rendered abortive as a result of the grant or the work done under it; this might arise where, for example, access to a newly erected building on the land was no longer possible after the grant of the rights, so that the building could no longer be used (paragraph 5(4) of Schedule 3 ensures that this can include expenditure on drawing up plans etc).

Professional Fees

27 Compensation can also be claimed for any reasonable expenses incurred in getting valuations or carrying out legal work in order to make or pursue the application itself (paragraph 5(6) of Schedule 3).

Rules for Assessing Compensation

28 Paragraph 5 of Schedule 3 ensures that the basic rules in section 12 of the Land Compensation (Scotland) Act 1963 apply to these cases. In particular, this section indicates what is meant by "value" when assessing depreciation.

29 To guard against the possibility of unnecessary things being done on land in order to claim or inflate compensation, paragraph 5(3) requires the value of such things to be ignored in assessing compensation .

Position of Creditors

30 There may be cases where creditors join in with a grantor of a standard security in the grant of rights, or grant such rights themselves. This might be because they are a creditor in possession, or they may have reserved the right to join in the grant of any rights. In these cases, creditors fall within section 78G(5) and are able to obtain compensation in their own right.

31 The effect of paragraph 6(1) of Schedule 3 is that in all cases where there is a standard security, the compensation is paid to the creditor (to the first one, if there are several creditors), but that it is then applied as if it were the proceeds of sale. This ensures that the grantor of a standard security, or any other creditor, will get any appropriate share. Paragraph 5(5) prevents two payments of compensation (ie one each to creditor and owner) for the same interest in land.

Disputes

32 Disputes about compensation may be referred, by either party, to the Lands Tribunal for Scotland (paragraph 6(3) of schedule 3 to the 2000 Regulations). The Tribunal's procedure rules, as set out in the Lands Tribunal for Scotland Rules 2003 ( SSI 2003/452), enable the Tribunal, with the consent of the parties, to determine a case on the basis of written representations, without the need for a hearing (Rule 26). Rule 14 allows the Tribunal to regulate its own procedure as it thinks fit, subject to the provisions of the 2003 Rules and to any direction given by the President. Rule 16 allows any party to the proceedings to be heard in person or be represented by counsel or solicitor or, with the leave of the Tribunal, by any other person.

Payment

33 Payments are to be made on the date or dates agreed by the parties (paragraph 6(2)) or as soon as practicable after the determination in cases where there is a dispute.

INTEREST

34 Interest may be payable on compensation, for example where applications take a long time to resolve. The Planning and Compensation Act 1991 makes provision for the calculation of interest on compensation. It will apply to compensation applications made under these regulations, because of the Planning and Compensation Act 1991 (Amendment of Schedule 18) (Scotland) Order 2003 ( SSI 2003/175), which also provides the date from which interest is to be payable for the various types of compensation.

Other Cases

35 Compensation under Part IIA is not available for any loss resulting from remediation work other than in relation to the heads of compensation specified in the Regulations. Nor is it available in cases where there is no remediation notice - for example where remediation is carried out voluntarily, without a remediation notice being served. In such cases, there is no requirement for the grant of rights: any rights that are needed must be acquired by negotiation in the usual way.

36 Where a local authority exercises powers of entry under section 108 of the Environment Act 1995 in connection with its contaminated land functions, the relevant compensation provisions are those at Schedule 18 to the 1995 Act.

Role of the Enforcing Authority

37 Arrangements for compensation under Part IIA are a matter for the grantor and the appropriate persons concerned, and the enforcing authority is not involved. However, it is required to consult those who may have to grant rights and to send them a copy of the remediation notice (see paragraph 18(b) above).

38 In addition, it is good practice for authorities to let those who they have consulted, because they may be required to grant rights to the appropriate person(s), know the final outcome of the determination of any appeal against the remediation notice, so that they are alerted to the need to be ready to apply for compensation.