Supreme Court HS2 ruling could benefit other infrastructure projects

Supreme Court rules ‘hope value’ of four sites within planned HS2 station should be considered together. 

The cost of delivering infrastructure in the UK could be set to fall. This follows a Supreme Court ruling reducing the extent that landowners can value the land to be compulsorily purchased.

The ruling involves certificates of alternative appropriate development (CAAD). Four applications were made for the site of HS2's terminus at Curzon Street in Birmingham.

The Supreme Court overturned the Court of Appeal ruling to back a government legal challenge.

Hope Value

It stated that compensation for the compulsory purchase of four neighbouring sites should be considered together rather than separately.

A senior lawyer claims the decision “could have far reaching consequences”.

Developers seek to gain a CAAD to maximise the value of the land when it is compulsory purchased. This is to show what the value of the land would be if a scheme is built. However, it does not mean that planning for any particular scheme has been granted.

That value is usually higher than the current market value of the land at the time.

Landowners

The landowners applied for Certificate of Alternative Appropriate Development as they believe the sites could have further planning potential.

The Secretary of State for Transport argued that these applications should be considered together. This avoids the public purse having to bear more compensation than it should.

The court ruled that the considerations of all four owners should be dealt with collectively rather than individually.

Unanimous

The Supreme Court unanimously allowed the appeal, holding that the declaration made by the Upper Tribunal should be restored.

The decision is likely to affect other court decisions where complicated compulsory purchase order arrangements are negotiated with landlords.

Charles Russell Speechlys partner Richard Flenley said: “This case challenges the current approach that is taken when assessing development potential of land subject to compulsory acquisition and we will now await to see if the decision will lead to any legislative change in this area of compensation and planning law."

Civil Engineering Contractors Association chief executive Alastair Reisner said the decision will be a relief for many infrastructure bodies.

“With the UK economy facing an uncertain future, we know that investment in infrastructure will be a key enabler to rebuilding economic growth. Yet even where we have viable projects, issues relating to planning and development consent can still act as a brake on growth,” he explained.

"We welcome the Supreme Court decision, which brings clarity for all parties and will hopefully ensure that there is less delay to future schemes on this specific issue.”