Eversheds has successfully defended National Grid in a £4.5 million compensation reference to the Upper Tribunal Lands Chamber.

The Claim arose following the installation of a section of the South Wales Gas Pipeline (also known as the Milford Haven pipeline) under land belonging to the Claimant.

National Grid installed the pipeline in accordance with Compulsory Purchase Orders which were made in March 2006 securing rights over a 24.4 metre wide strip of the land for the purposes of constructing, maintaining and (if necessary) replacing the pipeline.

The Claimant asserted that it was due compensation on the basis that it had suffered loss and disturbance during and after the pipeline installation; that it was prevented from extracting and removing the mineral deposits that were present on and in the land and that there was diminution due to sterilisation and diminution in the value of the covenant with the rugby club.

The claim for compensation was issued in 2013 and a 7 day hearing took place in Port Talbot, Wales in April 2015 before Mr Francis. The Tribunal ultimately determined that no compensation was due to the Claimant, having heard evidence from multiple factual witnesses and experts in the fields of planning, minerals and valuation.

The pipeline was installed using a Horizontal Directional Drill (‘HDD’) 20-35 metres under the Claimant’s land, rather than using an open cut trench method at a 1.2 metres depth (which is more usual). In addition it was installed as a heavy wall pipe. A key issue in the claim centred on whether a prospective purchaser would have known, or could have realistically found out at the valuation date (8 May 2007) about the method and depth of the installation. Mr Francis concluded that the decision to install using HDD had been made by the valuation date and that the fact that it would be heavy wall had been in the public domain since the Public Inquiry.

A further issue that arose was whether the compensation to be awarded was to be based upon the theoretical rights pursuant to the CPO, or the reality of the exercise of the powers under the CPO. It was accepted in cross examination by the Claimant that ‘the injurious affection claim must follow the exercise of the CPO powers, and the ‘‘after valuation’’ must be based on the pipe that was actually laid’.

Mr Francis concluded that ‘‘there was not a scintilla of evidence that the claimant had suffered any loss as a result of the occupation of part of the land before, during or after the construction of the pipeline’’.

A spokesperson for National Grid said:

“We work very hard to try to ensure that owners and occupiers are properly and fairly compensated when we have had to acquire rights over their land to install and maintain our networks.  We try to agree compensation whenever possible, but in this case we were confident that the right and proper outcome would be better achieved by way of a decision of the Tribunal.”

Natalie Minott of Eversheds said:

“This was a very pleasing result for our client where ultimately it was clear that they had properly interpreted the statutory framework and the Tribunal agreed that there was no basis for compensation to be paid where no injury had been evidenced or proven.’’

David Feist, Natalie Minott and Dean Monk of Eversheds LLP and Richard Honey of Counsel appeared for National Grid Gas plc.