Compensation on compulsory purchase

Compensation is payable following compulsory purchase of land and businesses

Major UK infrastructure projects require compensation for compulsory purchase of land and businesses

 

The firm has advised on many compensation claims following compulsory purchase, and occasionally when compulsory purchase was only being contemplated.  Apart from the following two reported case, all our CPO cases have settled by negotiation or mediation, thereby saving professional costs and allowing the parties to concentrate on their other business interests.

 

To see some client testimonials following compulsory purchase, please click here.

 

In addition to the compulsory purchases cases that have settled, one of the firm’s expert witnesses has given oral evidence in the following two reported cases:

 

Welcocks Skips Limited v Network Rail Infrastructure Limited [2019] UKUT 0162 (LC) ACQ/84/2017

The claim concerned compensation due on extinguishment for a waste transfer and skip hire business in London that was compulsorily purchased in June 2012.

 

The Lands Tribunal consider two heads of claim totalling £10.6 million concerning pre-possession losses and the value of the extinguished business, set out in their 47-page Decision. The key facts are:

 

Client  
Network Rail Infrastructure Limited, the Acquiring Authority.
Claimant

 

Welcocks, a waste transfer station, skip hire & recycling station.
Context

 

Vero were appointed by solicitors acting for the Acquiring Authority to quantify the compensation due following the compulsory purchase of premises alongside the railway.

 

Outcome

 

The case was heard over 6 days. The Claimant allegation that they had lost business of £610,206 prior to the extinguishment resulting in reduced maintainable EBITDA of £0.2 million. This was dismissed. The Tribunal awarded a multiplier of 7.83 for the business and also accepted Vero’s evidence on the release of working capital of £364,000.

 

Matters settled

 

Many matters were settled between the experts before the trial following exchange of expert reports, at meetings and in joint statements. The two experts worked closely during the hearing to provide and agree various figures and details requested by the Judge.

 

Challenges

 

The Claimants’ expert did not accept that Chevrolet’s announcement would have a dampening effect on demand for their cars. After thorough research, Vero identified a similar withdrawal, Suzuki in Canada in 2013. Based on that experience we estimated that demand would drop by 40%. The Court reduced this figure to 25%, which significantly reducing the claim.

 

Vero also challenged the Claimants expert’s projections of lost servicing, parts and body repair sales. The Court agreed these were aggressive and reduced their projections by 15%, again reducing the claim significantly. Vero also challenged the number of cars over 5 years old that would return to Toomey for body repairs and again the Court agreed.

 

 

Crowley & Anor (t/a Contraband Discount Stores) v Liverpool PSDA Ltd & Anor [2007] EWLands ACQ_47_2005

This Lands Tribunal case concerned the valuation approach for a retail business extinguished following compulsory purchase. Charles quantified the Claimants’ losses at £1.7 million. The Defendants argued that the true value of the claim was £240,000.

 

Following a two-week hearing, the Lands Tribunal determined the value of the claim at £700,000.

 

Want to hear more about our experience and services?

If you would like to discuss how we can help or for more information, please click here.