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Motorway Service Area Operator Entitled to Compensation for Highways Alterations

Craig Howell Williams QC
Richard Honey

The President of the Lands Tribunal has issued his decision in the case of Moto Hospitality v Secretary of State for Transport, dealing with the conditions applying to entitlement to compensation for injurious affection where a business's trade is affected by highway works.

Moto operates the Cherwell Valley motorway service area (MSA) at the junction 10 Ardley interchange on the M40 motorway. In 2001 and 2002, junction alteration works were carried out which made the MSA less accessible and convenient for, and attractive to, customers using the motorway. Moto claimed £15.5 million compensation under s10 of the Compulsory Purchase Act 1965, being the diminution in the value of its interest in the land caused by the reduced trade.

The President's decision was reached after a four day preliminary issue trial which considered whether Moto could in law be entitled to compensation in the circumstances. The Secretary of State had raised points as to what constituted the ‘special Act' in s10 of the 1965 Act, whether the loss was caused by the works or merely the stopping up of the highways, whether there would have been entitlement to special damages in public nuisance in the circumstances, and whether the highway obstructions were too remote.

The President held that:

  • it is the entirety of the works of highway construction and improvement comprised in the project authorised by the roads orders which constitutes ‘the works' for the purposes of s10;
  • it is the entirety of the statutory provisions enabling such works to be carried out that constitutes the ‘special Act' in s10;
  • compensation is not only payable under s10 in respect of injurious affection arising from land included within the relevant compulsory purchase order;
  • a person may sustain special damage from an obstruction that would in the absence of statutory powers constitute a public nuisance notwithstanding that a stopping-up order has been made in respect of the highway obstructed; and
  • to ground a claim for compensation the obstruction must be proximate to the premises in question but need not be immediately outside them - it is the loss of access or the interference with access that constitutes the particular damage.

Moto would therefore be entitled to compensation for the obstructions to routes of access between the motorway and the MSA.

Craig Howell Williams and Richard Honey appeared for Moto, instructed by Peter Taylor of DLA Piper in Birmingham.

A copy of the decision is available on the Lands Tribunal website at: http://www.landstribunal.gov.uk/Decisions