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20th November 2020

Noise, smells or light from new public works affecting your property? You may be entitled to part I compensation

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If your property is affected by increased noise smells or light following completion of public infrastructure works such as highways then you may be entitled to compensation.  The recent case of Russell v Transport for London [2020] illustrates what that can mean for you. 

What is Part I Compensation?

Part I of the Land Compensation Act 1973 sets out the right of qualifying owners and occupiers to claim compensation from the responsible authority where their property depreciates in value due to ‘physical factors’ caused by the use of ‘public works’ following their completion.

Such ‘physical factors’ include such things as noise, vibration, smell, fumes, smoke and artificial lighting. ‘Public works’ includes any highway, aerodrome and other works or land provided or used in the exercise of statutory powers.

The most common case for Part I Compensation arises when a new public highway has been built, or a new road layout has been carried out to an existing public highway. In these cases, the first claim day for Part I Compensation is one year after the opening of the works. For claims for other types of public works the first claim day is when they are first opened.

In order to claim Part I Compensation you must have a qualifying interest. For dwellings this means that you must:

  • own the freehold or a tenancy for a term not less than three years remaining; and
  • where the interest carries the right to occupy the dwelling, occupy the dwelling in right of that interest as your residence.

In relation to assessing Part I Compensation some key principles to appreciate are:

  • compensation is assessed by reference to the current market value on the first claim day (ie. if sold in the open market by a willing seller might be expected to realise) less the hypothetical value of the property on the same date without the additional physical factors arising from the works (“switched off value”);
  • in assessing depreciation due to the physical factors caused by the use of any public works, account is taken of the use of those works as it exists on the first claim day and of any intensification that may then be reasonably expected of the use of those works in the state in which they are on that date;
  • not all of the changes to the setting and environment of the property caused by public works and which have had an adverse effect on its value fall within the scope of the “physical factors” for Part I Compensation. By example, works may spoil the street scene making the property less desirable and thus affecting its value; and
  • any question of disputed compensation shall be referred to and determined by the Upper Tribunal (Lands Chamber).

Facts of the Russell Case

The case of Russell v Transport For London [2020] UKUT 281 (LC) concerned a highway improvement scheme undertaken in 2016 by Transport for London to remove the Archway Gyratory system on the A1 in north London. The works involved closure of one link of the gyratory, to create a public space, and the creation of two way traffic lanes elsewhere to replace the previous one way system. The works included improved provision for cyclists and wider pavements for pedestrians.

Ms Russell’s property is located on St John’s Way, close to its junction with Archway Road where significant changes were made to road layout and traffic flow. Before the works, two lanes of traffic flowed southwards and one lane northwards past the property with the centre line of north turning traffic 19.6m from the front of the property. After the works the traffic flow outside the property was reduced to a single lane in each direction, with the centre line of north turning traffic now 14.7m from the front of the property. The crossing lights had been moved to in front of the property consisting of a high level assembly of four lights on the far side of the road providing a red/amber pedestrian light above a row of three lights for a green cyclist, a green pedestrian and a number countdown.

The Tribunal first noted the evidential difficulty on claimants affected by works to existing public highways as opposed to the creation of new public highways. It was noted:

Unlike the case where a new road is built, and the physical factors arising from it are new and easily identifiable, a claim for a road improvement scheme requires it to be established whether physical factors arising from the use of the improvement scheme have had a greater depreciating effect on value than those experienced with the original layout. Without evidence of an increase, or at least a change, in physical factors, there can be no claim for compensation”.

The Tribunal was satisfied that the public works did cause an increase in the physical factors of noise, fumes and artificial lighting affecting Ms Russell’s property. Specifically, it was found that:

  • the expert evidence on noise levels showed an increase of around 2.3 dB from the use of the works. Standard classifications confirm that this level approaches the category of ‘just perceptible’ and would have a ‘slight adverse’ effect on residential property;
  • the expert evidence on air quality showed a moderate adverse effect from increased NO2 levels, in an area where the levels were already above the 40 mcg/m3 WHO target. Changes in PM10 levels were of negligible adverse effect in a situation where existing levels were within targets; and
  • as a result of the works the property was affected by new intrusive pedestrian/cycle crossing lights.

In considering the expert valuation evidence the Tribunal found that the ‘switched off’ value of Ms Russell’s property was £835,000 and the value after the works as £770,000. The total diminution was therefore £65,000. The Tribunal then found that only 60% of the total diminution was caused by the above identified Part I Compensation ‘physical factors’. The remaining 40% being caused by the location of the property being less desirable given the works created a bigger and busier junction, removed kerbside railings from in front of the property and spoiled the street outlook (even without lights). These were non-compensable. Accordingly, Ms Russell was awarded £39,000 being 60% of £65,000 and equivalent to 4.67% depreciation of the ‘switched-off’ value of her property.

Lesson:  The Russell case highlights the issues relating to Part I Compensation and demonstrates you may be entitled to compensation even for ‘just perceptible’ changes in noise levels. It is therefore important to obtain expert advice early and the Planning and Environment Team at Hewitsons LLP will be happy to guide you through all aspects to ensure your rights are protected.