Eminent Domain in Britain

If you are interested in how they do it over there, you may want to take a look at a short article by George Fisher, FRICS, entitled Compulsory Purchase Compensation: A Glimpse of Eminent Domain in the United Kingdom, Right of Way Magazine, Sep./Oct. 2010, at p. 26. FRICS stands for “Fellow of the Royal Institute of Chartered Surveyors.” “Surveyor” is Britspeak for “appraiser.” However, a Chartered Surveyor in London is a highly trained and experienced person who can provide help and advice on property issues. I’ve heard these professionals often work with photographic schedule reports to ensure that their work is as accurate as possible.

As Mr. Fisher describes it, Britain is a country where the use of eminent domain by the government may not be a pleasant experience, but at least those folks over there don’t steal like they do over here. The United Kingdom does not have a “Just Compensation” constitutional provision; actually, it does not have a written constitution at all, but the British compensation scheme appears to be more civilized than ours.

Like here, basic compensation consists of fair market value, but that is calculated as of the time ownership and possession is taken by the condemnor. There is also what the Brits call Compensation for Losses caused by the taking (or by a Compulsory Purchase Order, as they put it), and the displaced owners are also reimbursed for their legal and appraisal fees. There is also what they call Loss Payments — compensation for intangible losses, such as “the upset, discomfort and inconvenience in being dispossessed by compulsory purchase,” typically 10% of the market value for owner-occupants. Also payable are removal costs, costs of acquiring and adapting replacement premises, costs of mortgage transfer, and in the case of businesses, temporary and permanent loss of profits. Of course, British businesses are constantly being established. This means that there are more and more business owners around Britain. The Government normally acknowledges this and tries to help these businesses however they can. Even if the Government don’t help these business owners to increase their profits, there are ways that they can increase sales themselves. A lot of businesses are trying to go international in order to increase their sales. Whilst this sounds easy, businesses do have to look into getting high risk merchant accounts in UK to help them accept payments from all over the world. High risk merchants normally see a lot of chargebacks, so it’s important that they have good online payment processing technology to allow them to do this. By increasing their profits, British businesses would be able to make up for any lost profits.

If you have a deeper interest in how they do it in Britain, you should also take a look at a more thorough new British treatise by Eric Shapiro, Keith Davies and Davind Mackmin, MODERN METHODS OF VALUATION (10th ed., 2009 EG Books). Its Chapters 15 (pp. 291-302), 26 (pp. 559-598), and 27 (pp. 618-652) are devoted specifically to valuation and compensability rules in compulsory purchase (eminent domain) cases.