What compensation are farmers entitled to for disturbance during the construction of a motorway
Disturbance during the construction of a motorway through a farm can be massive, particularly if the holding is a dairy, bloodstock or other livestock farm.
There can also be major traumatic impacts on the landowner and the entire family.
Most landowners accept that improved public infrastructure is essential for the orderly development of the country, and will cooperate if impacted and the owner has an entitlement to compensation for disturbance.
1 Temporary Disturbance, prior to and during the Construction Works
While the value of the land acquired is assessed as of the date of Notice to Treat, compensation for disturbance is assessed as of the date of agreement or the date of Arbitration. Compensation for temporary disturbance should commence from the time the first approach is made to the owner about the CPO. A farmer's time is as valuable as that of a County Council engineer or Valuer. To enable a reliable claim for temporary disturbance, an accurate diary of all time wasted in dealing with the CPO situation should be kept.
When a road scheme splits a holding, the owner is entitled to a workable access, which is fully compliant with Health and Safety Regulations, to retained land at all times.
Heavy construction works in close proximity to an owner's private residence could cause considerable personal disturbance, and the entire family may have to move residence for an extended period. There is an entitlement to full compensation for these costs, provided the disturbance is substantial and clearly established.
Acquiring Authority experts regularly say at arbitrations that road works last for a three-year period. A timeframe of five to seven years is generally more accurate. Preliminary works can last years, before the construction works start, and this disturbance and time loss is also compensable. A total timeframe, from start to finish, of eight to 10 years is not uncommon.
2 Permanent Disturbance into the future, to reflect special value to owner
Rule 2 and Rule 6 of the Acquisition of Land (Assessment of Compensation) Act 1919, clearly provide for additional compensation for the "Value to Owner" of land, in addition to its open market value.
This can be the single most contentious aspect of compensation. Some Public Authority valuers even deny that there is an entitlement to any such compensation.
A common mistake made by negotiators is to (incorrectly) treat permanent disturbance as being paid for by compensation for severance, injurious affection and accommodation works. Compensation for severance and injurious affection is payment for damage to the asset value of the holding. While this may sometimes mitigate the impact of disturbance, it never compensates fully for it.
For example, severance compensation for a motorway through a tillage farm should be roughly comparable to that through a similar sized dairy farm. However, for obvious reasons, compensation for both temporary and permanent disturbance should normally be much greater in the case of the intensive dairy farm.
If the existing use is for dairying, there is an entitlement to compensation for disturbance to the dairying operation at the time being and into the future for a reasonable period of time.
There is an entitlement to compensation for all disturbance, including costs, arising from extra travel to and from, and the operation of replacement land.
In the case of functioning farms, temporary disturbance during the works, and permanent disturbance into the future, should always be assessed and quantified, on both sides, by a qualified and experienced agricultural expert (Agronomist). The Acquiring Authority practice of routinely engaging an Agronomist, as well as a Valuer, appears to have lapsed and most offers, in recent times, are put forward by a valuer who will seldom have professional knowledge of farming matters. This can result in an inadequate compensation offer and a premature reference to Arbitration, if the Acquiring Authority proposals are deficient.
Assessing and quantifying permanent disturbance, into the future, can be a much more difficult exercise than quantifying temporary disturbance. Farmers are likely to experience strong resistance to this compensation claim but should insist on their entitlements, even though it may require an Arbitration or even a High Court reference.
As well as the loss of land, construction of a road through land with development potential for housing can seriously disturb the development potential of retained land. In itself, zoning is not always evidence of development potential value, as planning permission must also be possible, as well as evidence of a market for housing in the area. In simple terms, zoning for development is a good start but not the full story. The assistance of a professional planning consultant is generally advisable.
3 Related matters
Related matters will include the pre-reference costs of assessing the compensation, lodging the claim, and negotiating with the Acquiring Authority. They will also include the legal costs of a solicitor to do conveyancing and finalisation of the compensation payments. The pre-reference costs are part of the owner's compensation and are always payable by the Authority.
If a claim has to be referred for Arbitration the costs will usually have to be borne by the "loser." Put simply, if the Arbitrator awards more than the Acquiring Authority had previously offered, unconditionally, and in writing, the Authority has to bear all the costs. Conversely, if the award is less than the unconditional offer the owner may have to pay the costs of the Arbitration. In practice, payment of costs by the owner, seldom happens. An experienced professional team working for the owner is unlikely to expose a client to a serious risk.
Richard Collins is a consultant with FBA Consultants, based in Fermoy, Co Cork. He is the co-author with Noel O'Brien of 'A Practical Guide to Compulsory Purchase in Ireland'. firstname.lastname@example.org or 025 31244
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