Time limit for compensation claims

Citation

(2000), "Time limit for compensation claims", Property Management, Vol. 18 No. 2. https://doi.org/10.1108/pm.2000.11318bab.039

Time limit for compensation claims

Claims for compensation following the compulsory purchase of land can still succeed after the legal limit of six years under certain circumstances, advise solicitors Lawrence Tucketts, whose landmark legal action on behalf of Hanson Quarry Products has seen long-held assumptions by the property world turned upside down.

Hillingdon Council made a compulsory purchase order in 1980 against land owned by Hanson Quarry Products. Negotiations over compensation continued for a further 14 years, until Hillingdon claimed that a six-year limitation period applied and the claim was therefore well out of time.

It had been widely assumed that there was no time limit for referring a disputed claim to the Lands Tribunal for determination. A court ruling decided that a six-year time limit did apply, but as both parties had continued to negotiate on the shared assumption that no such time limit existed, Hillingdon could not escape its obligation to compensate Hanson.

According to Nicola Mathiason, a planning and compensation expert in Lawrence Tuckett's property group, the successful ruling in Hanson's favour has important implications for the property world and all acquiring authorities:

It's clear now that actions to claim compensation cannot be brought after six years whether the land is acquired by way of entry onto land as in Hanson's case or by way of a vesting declaration. Where the time limit is approaching a reference should be made to the Lands Tribunal to stop time running and to allow negotiations to continue.

Where a six year period has already expired, it may be possible to prevent the acquiring authority relying on the limitation point to defeat the claim if evidence is available to show that both parties had been negotiating a claim on the basis of the shared assumption that no limitation period applied.

A full report on the case and its implications for acquiring authorities and landowners is available from Nicola Mathiason at Lawrence Tucketts on (0117) 929 5252.