Electricity Wayleaves - your questions answered
Matthew Fletcher, 5th March, 2018
Leading specialist, Matthew Fletcher, provides answers to questions posed by landowners and developers on the subject of Electricity Wayleaves.
1. What is a contractual wayleave?
A contractual wayleave is a written agreement between a landowner and the electricity company which permits the electricity company to install or retain their apparatus on the land. A contractual wayleave can be differentiated from a “necessary wayleave” which is a compulsory wayleave granted to the utility company by the Secretary of State pursuant to the Electricity Act 1989.
A contractual wayleave will typically be granted for either a fixed term or contain a right for the landowner to terminate it subject to giving an agreed period of notice. However, the termination of electricity wayleaves is regulated by the Electricity Act 1989. As a result a special statutory notice to remove the electricity line is also required and the electricity company enjoys the right to apply to the Secretary of State for a new “necessary wayleave” to be granted.
3. Does a contractual wayleave enable the landowner to claim compensation?
A contractual wayleave may contain a mechanism whereby the landowner can recover compensation in the event that the existence of the wayleave causes a reduction in the value of his land. Sometimes a wayleave may also contain a provision providing for compensation where the landowner obtains planning consent for a development which cannot be implemented due to the existence of the wayleave. In the absence of a contractual right to terminate the landowner must terminate the existing wayleave and will only become entitled to compensation if a “necessary wayleave” is subsequently granted by the Secretary of State.
4. What is the difference between a contractual wayleave and an easement?
An easement creates an interest in land and can be granted in perpetuity i.e. create a permanent right for the utility company to keep their equipment installed on the land. Where a landowner grants a permanent easement to the utility company then you would normally expect the utility company to pay full compensation in return for the grant of an easement.
5. The electricity company has sent me an easement / wayleave - should I sign it?
Unless you have been properly advised by a specialist solicitor then no you shouldn’t. By signing a wayleave or an easement you may well permanently lose the right to claim compensation for any present or future diminution in the value of your land as a result of the presence of the electric line. Always take advice before signing anything!
6. I have served notice to terminate a wayleave is the electricity company required to immediately remove their infrastructure?
As explained above the answer is usually no. Even though you may have served valid notice to terminate the wayleave upon the expiration of that notice the Electricity Act provides that the utility company is entitled to keep their equipment installed on the land until such time as a statutory notice to be removed has been served. It is often the case is that two notices must be served before the electricity company is forced to either remove its equipment or apply to the Secretary of State for a new “necessary wayleave”. The position however will be different where the contractual wayleave has expired either due to effluxion of time or due to a change in ownership. It is therefore important to take legal advice in relation to the correct drafting of all termination notices.
7. Can I oppose the grant of a new necessary wayleave?
If the landowner opposes the grant of a necessary wayleave then a necessary wayleave hearing will normally take place before an inspector who will then produce a report and finally the Secretary of State will make a decision as to whether or not it is necessary and expedient for a necessary wayleave to be granted.
8. My land has been devalued as a result of the presence of an electric powerline - can I claim compensation?
Yes, you are normally entitled to claim compensation either pursuant to a contractual right contained in the existing wayleave or under the provisions of the Electricity Act when a new necessary wayleave has been granted.
9. What happens if the amount of compensation cannot be agreed?
The landowner and the electricity company may seek to agree an appropriate figure for compensation but in the event they are unable to agree the amount of compensation then the landowner is entitled to refer its claim for compensation to the Upper Tribunal (Lands Chamber) which will determine the correct amount of compensation. There are time limits for making the reference and you should always instruct a specialist solicitor to draft the reference on your behalf and represent you in those proceedings.
10. How is the amount of compensation assessed?
The landowner is entitled to recover all the loss which reasonably flows from the grant of the wayleave. In the case of development sites, complicated arguments then arise as to the proper qualifications of that loss and the correct valuation date. It is therefore essential that you instruct a specialist solicitor with experience in this field to advise you in relation to the correct legal principles and the best arguments to deploy to ensure that you maximise the compensation payable. In our experience electricity companies often make derisory offers and are very reluctant to properly compensate landowners for their true loss. In order to combat their approach and maximise the compensation due you must instruct a specialist solicitor!
11. I intend to seek planning permission to develop my land which is blighted by electric lines. Should I seek legal advice before applying for planning permission / terminating the contractual wayleave?
Yes! Often the timing of an application for planning permission and the timing of the termination of the existing contractual wayleave will be critical in maximising compensation. In our experience electricity companies often rely on timing anomalies to seek to justify derisory offers. Consulting a specialist solicitor to advise you on a tactically sound ‘pylon strategy’ at the start of the process could potentially save you from making mistakes that devalue your compensation claim.
12. How much do you charge for your services?
Generally speaking we believe the fairest way to conduct our business is to charge you for the actual time that we spend acting on your behalf. This ensures that you only pay for the advice you require. Our fees are normally recoverable from the electricity company. Many surveyors offer their services on the basis that you will pay them a commission. The problem with this type of arrangement (particularly with higher value claims relating to development sites) is that it may lead to excessive fees being paid to the party’s representative particularly in circumstances where a quick resolution is achieved. Moreover in circumstances where a fair compensation settlement cannot be agreed and the matter has to be referred to the Upper Tribunal then expert witnesses are strictly prohibited from working on a commission basis and this can cause difficulties where the Claimant has committed themselves to paying commission to a surveyor who will not be in a position to act as an independent expert witness on their behalf.
13. Do you act on a ‘no win, no fee’ basis?
In circumstances where it is necessary to refer a claim to the Upper Tribunal we are able to consider acting on what is known as a discounted conditional fee agreement whereby we reduce our upfront charges in return for the payment of a success fee in the event that the claim is successful.
14. Is it possible to achieve a settlement through mediation?
We are strong advocates of mediation which is a process by which the parties to a disputed compensation claim seek to resolve the claim through the appointment of an independent mediator who will seek to facilitate a negotiated settlement. This enables claims to be resolved quickly with significantly less costs being incurred. We have links with some of the most reputable mediators in the country.
15. Do I need a solicitor or a surveyor to represent me?
In very low value claims relating to individual residential properties it is often sufficient to appoint a surveyor to act on your behalf. In circumstances where you have a higher value claim (for example in relation to a development site which has been blighted by the presence of an electric line) it is crucial to also obtain legal advice from a solicitor who has lots of experience of dealing with Electricity Act compensation claims and can provide strong advice in relation to tactics etc. A solicitor will also need to appoint a surveyor (and sometimes also a planning consultant) to act as an expert witness. Such independent witnesses work on a “time charge” basis however their fees will generally be recoverable from the electricity company. We consider that this approach is more transparent then a commission based approach.
16. If I instruct Gosschalks who will deal with my case on a day to day basis?
Cases are dealt with on a personal basis by either Matthew Fletcher or Phil Osborne who are Partners and are both recognised experts in this field. The approach of our whole business is to deliver the highest possible standards of care by ensuring that cases are only dealt with by experienced staff. To avoid unnecessary costs more routine tasks will be delegated to more junior fee earners by Matthew and Phil where appropriate.
17. Will I also need to instruct a barrister?
In the event it is necessary for a claim to be referred to the Upper Tribunal then it may be necessary for us to instruct a barrister depending on the size, value and complexity of the claim. Barristers typically provide specialist input on the drafting of Court documents and also deal with the advocacy at the final hearing. Their fees are generally recoverable from the electricity company in the event of a successful outcome. We have links with the best barristers in the country who specialise in acting for Claimants.
If you have a claim relating to a commercial / residential site or a high value residential property please telephone Matthew Fletcher on 01482 590231 for a free no-lobigations review of your options.
Find out more about our services in this specialist area by clicking here.