Injurious affection after Castlefield: A return to common sense?

Compulsory purchase compensation has always required a balance between established valuation principles and the practical realities facing landowners. A recent Upper Tribunal decision raises important questions about that balance, particularly where the consequences of a scheme become clearer long after land has been acquired.

Severance and injurious affection is a head of claim providing compensation for depreciation in the value of a claimant’s retained property following compulsory purchase. The statutory provisions derive originally from the Lands Clauses Consolidation Act of 1845 and have been described as ‘notoriously difficult and obscure’.

Over 20 years I’ve negotiated many claims, all of which have ended in pragmatic settlement (sooner or later). Pragmatism is needed as there is rarely good comparable evidence. Also, while the valuation date is the date of ‘severance’ from the acquired land, it was always widely accepted practice to have regard to the subsequent actual effect of the scheme on the retained property.

This compensation, 178 years old, and imperfect but functional, saw a significant change in the case Castlefield Property Limited v National Highways Limited [2023] UKUT 217 (LC), (‘Castlefield’) where the Upper Tribunal decided, in definitive terms, that post valuation date events had to be disregarded:

“As a general rule, without an express contractual or statutory instruction to do so (and there is none in section 7) it would always be wrong to value land as if with knowledge of matters which were not known, and could not have been known, at the valuation date.”

The difficulty with valuing what we cannot unknow

It’s hard to argue with the pure valuation logic. But equally hard to ignore the practical and fairness issues created. When valuing, it requires us to ‘unknow’ what we know, and instead speculate about what buyer and seller would have anticipated at the valuation date. The problem being that sometimes actual events differ dramatically from what was expected.

For claimants, those differences can have significant financial consequences. For acquiring authorities, they create uncertainty over how the full effects of a scheme should be reflected in compensation.

I have been in subsequent claim negotiations where ‘Castlefield’ was applied, and it significantly changed the amount of compensation. So I was happy to read the recent decision in Landlink (Stoke Mandeville) Ltd v The Secretary of State for Transport [2026] UKUT 319 (LC).

This case dealt with a claim for injurious affection and severance, following compulsory acquisition of land with deemed planning permission for retirement accommodation. The Upper Tribunal, in awarding over £10m compensation, agreed with the claimant that the development prospects and associated value of the retained land were significantly worse due to planning and access uncertainties created by the scheme.

In particular, the claimant had no right of way to the retained land from the valuation date until shortly before the case hearing, when the Secretary of State belatedly gave assurances that an easement would be provided. By then the retirement home market had ‘all but collapsed’ and the new draft local plan had removed the retained land’s planning allocation.

What Landlink means for the assessment of compensation

In reaching its conclusion, the Upper Tribunal had regard to post-valuation date events:

• Compensation is based on the damage caused to retained land by injurious affection or severance. 
• The valuation date is the date of severance (i.e. the date the compulsorily acquired land is taken).
• Logically and in principle, events which occur after the valuation date cannot change the value of the land at the date of severance.
• However, events which happen after the valuation date can increase, or reduce, the amount of damage sustained. “It is the whole of the damage suffered, and not the difference in value caused by the act of severance, which is the measure of compensation.”
• Regard must be had to post-valuation date events and their impact on damage to accord with the principle of equivalence.

I slightly struggle to follow the intellectual journey between ‘Castlefield’ and ‘Landlink’, but the return to a common-sense approach, having regard to what is known and based on the principle of equivalence, is very welcome.

Importantly, this is not simply a question of valuation methodology. It goes to the underlying purposeof compulsory purchase compensation: ensuring claimants are put into a position of equivalence as a consequence of land being acquired.

Three practical lessons for claimants and acquiring authorities

Beyond the legal interpretation, the decision raises several practical considerations for those involved in compulsory purchase and the delivery of major infrastructure schemes.

1. Post-valuation date events must be considered fairly

The Secretary of State sought to argue that only some of the circumstances existing after the valuation date should be taken into account. Specifically, the acquiring authority argued for consideration of the belated assurances given about access to the retained land, four years after the valuation date (and which reduced compensation), but not other subsequent factors which would increase it.

This seems to me a troubling and unfair approach, which did not impress the Upper Tribunal.

The wider lesson is that subsequent events cannot simply be considered selectively according to whether they increase or reduce compensation. A fair assessment must consider the relevant circumstances and the actual damage sustained.

2. Landlocking creates compensation risk

It is not unusual for highways and other schemes to landlock a claimant’s retained land. It happened in Castlefield and I am dealing with a case where the claimant is still legally landlocked nine years after compulsory acquisition.

It is not a reasonable position to leave a claimant in, and this case shows it leaves acquiring authorities open to compensation risk. Had the acquiring authority in Landlink provided certain access rights before the development market fell away, the compensation award could have been very different.The right time to deal with this is before compulsory acquisition.

The consequences can extend well beyond the immediate loss of access. Uncertainty over legal rights can affect development prospects, commercial decisions and the ability of landowners to use or realise the value of their retained property.

If at all possible, it is better to work with claimants to arrive at practical solutions to mitigate loss.

For acquiring authorities, resolving access arrangements early and engaging constructively with affected landowners can help reduce uncertainty, avoid prolonged disputes and manage compensation exposure.

3. Claimants’ time has a real cost

The claimant effectively paid themselves to manage the claim, at an effective rate of £100/hour. This was an actual cost to the business, invoiced and paid by the business, coming to a total of £116,734 + VAT. The Upper Tribunal awarded it in full.

Compulsory purchase is often an enormous stretch on busy claimants’ time and resources, which it can be very hard to persuade authorities to pay. I expect more claimants to follow this approach.

The decision reinforces the importance of recognising the practical burden compulsory purchase can place on those affected. It should be a lesson to claimants to keep detailed records of the time and costs incurred in managing their claims, although recoverability will continue to depend on the circumstances of each case.

A reminder that compensation is about more than valuation

The distinction between a theoretical valuation and the actual damage suffered may appear technical, but its implications are very real.

Compulsory purchase is an essential mechanism for delivering infrastructure and development in the public interest. Equally, the principle of equivalence exists to ensure that those affected are appropriately compensated for the losses they sustain.

For acquiring authorities, Landlink also offers a wider lesson about managing risk. Uncertainty over access, delays in securing necessary rights and prolonged negotiations can create financial consequences long after land has been acquired. Resolving these issues proactively is generally a better outcome for claimants, acquiring authorities and the projects themselves.

After more than 20 years of negotiating these claims, I welcome an approach that recognises practical realities alongside established valuation principles. Whether Landlink represents a lasting shift in the interpretation of injurious affection remains to be seen, but its emphasis on the full extent of damage suffered feels like a welcome return to common sense.