Background
Sandwell Metropolitan Borough Council compulsorily acquired the claimants’ land in Smethwick in 2014. In a decision handed down on 27 February 2026, the Upper Tribunal assessed compensation at £547,039.
The claimants then sought their costs on the indemnity basis. They had offered in October 2025 to settle compensation at £425,000 plus £100,000 and VAT for costs; the council counter-offered £250,000 and £21,242 in post-reference costs. The council accepted that it should pay the claimants’ costs, but argued that assessment should be on the standard basis.
The Court’s Holding
The Tribunal ordered indemnity costs. Applying the principle of equivalence in compulsory-acquisition compensation, it held that the reasonable and necessary costs of pursuing the reference are part of the loss attributable to the taking of land. Costs should therefore be allowed unless the acquiring authority establishes a special reason to disallow an item, such as that it was unreasonably incurred or unreasonable in amount.
The council had identified no claimant conduct causing an obvious and substantial escalation of costs. The Tribunal distinguished Mann v Transport for London because it involved no loss of land and therefore did not engage the equivalence principle. Having decided the issue on that basis, the Tribunal did not need to determine whether the council’s litigation conduct independently justified indemnity costs. Costs were to be assessed in detail by the Senior Courts Costs Office, with £150,000 payable on account within 28 days.
Key Takeaways
- In a compulsory-purchase compensation reference, equivalence can support indemnity-basis assessment of the claimant’s reasonable costs.
- The acquiring authority bears the practical burden of showing why a particular cost was unreasonable or unreasonably incurred.
- A claimant’s costs total of £293,284 inclusive of VAT will be subject to detailed assessment; £150,000 was ordered on account.
Why It Matters
The decision treats reasonable costs of obtaining compensation for compulsorily acquired land as part of restoring the claimant to the position they would have occupied absent the acquisition. It reinforces that an acquiring authority cannot rely on the ordinary standard-basis position without identifying a basis to disallow costs in the particular compulsory-purchase reference.