Utility Companies and Compensation – What to look out for

19th August 2016

Driving around the countryside, it’s amazing to see and think how many utility companies’ apparatus (gas mains, electricity lines and water pipes) criss-cross the farming landscape. For those that have apparatus above ground, there is the constant reminder, especially during spraying, harvest and cultivation periods of the hassle they cause.

Occasionally, utility companies require access to undertake repairs, renewals or replacements to their apparatus which inevitably results in damage being caused to property and can be a real head ache especially if access is required during wet periods or busy times of the year.

Most utility companies operate under various Acts of Parliament and therefore it is vital to have a good understanding of the underlying legislation and what statutory powers utility companies do and don’t have when they require entry to install new apparatus, repair, maintain or replace existing equipment. If your property is to be affected by such programmes, I would strongly advise these issues are addressed before any access is permitted as ultimately you need to be assured that you will be fully compensated for any loss you incur.

Inevitably any access requirement is going to cause some level of disturbance whether it be physical damage to the ground, loss of crops, inconvenience of moving stock, your time or any subsequent reinstatement required once the works are complete. This list goes on and of course the recent wet weather will only exacerbate such loss as utility improvement programmes become ever increasingly protracted. It is important to iron out the implications of any utility scheme from the start and have a full understanding of works involved as in far to many circumstances the landowner and/or occupier are not fully briefed by the utility company when the programme commences.

Under a normal utility improvement scheme, there are various compensation issues to address. Firstly that relating to loss of income and with commodity prices fluctuating it is important to get the timing and detail of any claim correct. Secondly, there will inevitably be some reinstatement to do once the works are complete. It amazes me the amount of times utility companies take access over the winter period and unfortunately I have been involved in far too many cases where no respect or consideration has been given to the land or farmers property. I would advise reinstatement rates are agreed before entry is permitted which may include hourly charges for undertaking sub-soiling, discing etc to remove any deep ruts or soil compaction caused by the works. This makes a final claim much easier to settle and reduces the need for speculation.  Many underestimate the time and cost of such reinstatement measures and this can be a contentious point when trying to settle a claim with the utility company.

Thirdly, inconvenience and disturbance payments. It is vital that from the start, you keep a record of all your time spent in correspondence with the utility company and any inconvenience this may bring, including your time speaking with an agent representing you. Such time records should also include any additional requirements such as amendments to your agri-environmental stewardship scheme, additional time spent in spraying, harvesting or cultivating or taking more time feeding or checking livestock.

In addition to the above, there may also be a capital payment due if a new easement is created. This will relate to the diminution in value to the property the installation of the new apparatus brings. Such claim should not be overlooked, and it is very important to get a clear understanding of the effect such apparatus can have on the value of the underlying asset. If a new wayleave is created or an existing altered, make sure the agreement is accurate and you are receiving the correct annual payments.

Lastly, don’t forget that the utility company will cover all your expenses including the appointment of an agent and other professionals to act on your behalf. Getting professional advice can be beneficial to ensure you are fully compensated and all your concerns are addressed right from the start.

For more information relating to compulsory purchase and compensation please speak to your regional contact:

Northumberland & Borders and Yorkshire – Robert Moore 01665 511984
County Durham – Jonathan Wallis – 01388 529577

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