Examination of Witnesses (Questions 6720
- 6739)
6720. Could we then deal with the issue of the
compensation system and some points you wanted to draw to the
attention of the Committee please?
(Mr Winbourne) Before I do that, could I just
mention the shift in the route which I suggested, and I do not
want to go into the details because Mr Schabas has done that,
but I did mention the shift in the route, the Wigmore alignment,
and that, I respectfully suggest, is not outwith the direction
of your Committee.
6721. Could we then turn to the compensation
system and the points you want to draw to the attention of members?
(Mr Winbourne) My evidence focuses on two areas.
The first is the proper presentation of the gross inadequacies
of the compensation system for those affected by the Crossrail
scheme, and that includes those who get nothing, which in turn
emphasises the importance of considering any reasonable alternative
route to the extent that it cuts down on the physical, environmental
and financial disruption for people. The second is the significant
and welcome improvements that can be made to many London tube
stations which would ease pressure on key central London interchanges
and which do not require the need for Crossrail and can be done
for a fraction of the cost and with very little disruption and/or
compensation arising.
6722. Mr Winbourne, because we are quite tight
on time, can we just deal with that second point very, very briefly
please and, for that purpose, there is a slide.[19]
You have highlighted a number of old interchanges where escalators
and travelators could be put in—
(Mr Winbourne) That is right.
6723.—as one of the ways in which congestion
could be relieved at less cost.
(Mr Winbourne) I have identified a dozen and
there are actually 11 in your pack because one got left out, Chairman.
I reckon they would cost, though I am no expert on this, but probably
under £50 million each, so you are talking in a budget, say,
of £500 million which could achieve a terrific amount in
terms of better interchanges. They may not all be perfect and
it may be that some would be rejected, I accept that, but these
are suggestions. What I can say is that linking up with existing
stations is used in Paris, but they did it very badly, and I think
we would do it very well.
6724. Mr Winbourne, have you seen any analysis
of this kind in the Environmental Statement at all?
(Mr Winbourne) None whatever.
6725. Let us turn to compensation please and
can we just focus on the particular points please that you want
to draw to members' attention this afternoon?[20]
(Mr Winbourne) In my considered
opinion, some of the alleged underlying property valuation assumptions,
which have been put forward by some estate agents and economists
monotonously in support of the chosen Crossrail alignment, are
almost wholly misconceived. Normally, there can be no margin for
much increase in the top property values along the route chosen
through the City and the West End; they are already at the peak,
the highest in Europe. It is often overlooked in planning circles
that property values are the most immediate and commonly perceived
yardstick of household and business amenity and environmental
quality in any given area. It is also not appreciated by most
people that a public compensation claim (for property and personal
losses similar to liquidated damages) may be a reasonable component
in the assessment of the environmental impact, stress and damage,
all of those things always provided that every aspect of loss
and damage is being addressed. In the case of, say, an intrusive
trunk road project, the chance victim will claim a reasonable
amount of money which reflects his or her officially inflicted
property and other losses. Always provided that he or she is advised
expertly, he or she may get a reasonable settlement.
6726. However, the current compensation system
in general and where some land interest is taken, and those are
called `Section 7 claims' in the business, is in many ways unfair
and inadequate. This leads in most cases to people settling for
less, even when they are advised. This is because of the arduous
system of claiming which is open to improvement.
6727. The Law Commission, a highly respected
body of eminent lawyers, exists to promote legal reform. Recently,
after very widely invited consultation, to which I contributed,
it reported on the inadequacies of the current compensation system
generally in two voluminous, comprehensive and detailed reports,
what you would expect from the Law Commission. Regrettably, so
far Parliament has not found the primary legislation time to make
the recommended and necessary changes. The Compulsory Purchase
Association, of which I am its most senior member, is concerned
at this delay which has detrimental effects upon the plans of
compensating authorities as well as aggravating large numbers
of ordinary people and claimants, large and small. Moreover, in
my own opinion, many procedures could be improved now through
limited and targeted regulatory changes, and I may prepare a paper
on that. I should say, sir, that the Compulsory Purchase Association
of course includes people from the official side as well as people
like myself in private practice, so it is not one-sided in its
view.
6728. Mr Pugh-Smith: Mr Winbourne, you
have looked at the information paper the Promoters have provided,
C2, on compensation. Have you some comments to make on that?
(Mr Winbourne) I have reviewed information
paper CT2 contained in the Promoters' rebuttal document which
purports to explain to lay people the existing system for providing
compensation for expropriation. That is what it is and that is
what it is called in other countries. All in all, the C2 paper
obfuscates the grim realities, instead of explaining them straightforwardly.
I cannot possibly agree with the bland statement in the paper
that "in general the Compensation Code is appropriate for
application to the Crossrail project". It is poor enough
for any surface railway project within its published limits of
deviation, let alone Crossrail below ground, which is the very
worst, as it is offered now.
6729. Consultations have been confined to hypothetical
surface limits of deviation, as shown on the plans of the `safeguarded
route' since 1991. What are not shown on plans are much wider
outer zones of subterranean caution, as contained in an unpublished
annex. Taken together, those zones are up to a quarter of a mile
wide under central London and likely to affect countless building
insurance policies. I do not exaggerate, Chairman. At stations,
that is the width we are looking at, on their own figures. They
talk of 144 metres either side in this annex to the safeguarded
route which is, I am sure, in the library of this House.
6730. There is no written-down `Compensation
Code', as the rebuttal document suggests. The general compensation
system is an arcane one based upon legislation well over 150 years
old and a large body of complex case law since then. Indeed in
document C2, quoted compensation cases are referred to in footnotes,
but without recent update. Under Victorian rules, as re-enacted
in the Compulsory Purchase Act 1965, so that is 40 years old,
there is an unfair disparity in treatment even for general, non-railway
compensation, as between ordinary compensation for a road, a housing
scheme, what-have-you, but not a railway scheme, as between those
whose land is being compulsorily purchased where they take your
property, Section 7 claims, and certain others where no land interest
is taken from them, Section 10 claims, but I have sat in this
room and heard the CBI worrying about this, and I just refer to
that in passing. Sir Digby Jones was quite eloquent, I listened
to what he had to say and I agreed with every word.
6731. Where any land interest whatsoever is
taken from the claimant, fuller compensation is payable, not only
for the value of the interest in land as such, but also for contingent
claims, such as for consequential business or residential disturbance,
the cost of moving or whatever, and sometimes for collateral losses
incurred at other properties of the claimant, and in the trade
that is called `lands held with', where you might have a house
here and your garage is affected or the other way around.
6732. However, during public works where no
land interest is taken from the claimant, compensation is restricted
in scope to provable injurious affection, effectively limited
to otherwise actionable nuisances arising from the actual construction
of the public works, and those are Section 10 claims. Furthermore,
Section 10 confines any compensation to reductions of property
values. In other words, you will get whatever it costs in the
lowering of your property value, but you will not get anything
else, no consequential losses. It cuts out any claims for residential
or business disturbance as "parasitic", and that is
in the judgment of Lord Hoffman in Wildtree Hotels v Harrow,
House of Lords 2001, which is in the footnotes of C2 and it is
the leading case on this matter and, as you will appreciate, it
is recent. He quotes all the Victorian railway cases as precedent
in connection with that particular hotel which was to do with
a road next door to it, but precedents are all railway precedents
and this is quite important. The doctrine was confirmed and slightly
extended by the President of the Lands Tribunal and upheld by
Lord Justice Carnwath and the other judges in Ocean Leisure
v Westminster City Council, Court of Appeal 2005, where my
firm advised the successful claimant, and that was my son James
Winbourne whom you saw on a previous Petition.
6733. After a scheme is completed, such as an
airport, road or railway, claims for noise and other nuisances
from its later use may lie under Part 1 of the Land Compensation
Act 1973. If part only of a property is taken, the ordinary surface
claimant may opt for `material detriment' protection. Suppose
they are widening the road and taking your front garden, you can
claim that they should take the entire house. You can do that
by notifying in advance and demanding that the acquiring authority
should take the whole property with all attendant claim items,
which comes under Section 8. Unfortunately, where subsoil is to
be taken, ie for Crossrail, the claimant may not be alert enough
to notify in advance, and that is the position I have in a current
sewerage case in Hull. Meanwhile and singularly for rail tunnelling
and other rail works in subsoil, material detriment cases are
ruled out and, in particular, so are contingent business and residential
disturbance claims, as being parasitic.
6734. Mr Pugh-Smith: Can we turn specifically
to the way in which the compensation system applies to underground
railways?
(Mr Winbourne) As to underground railways,
the compensation system has always been more restrictive and oppressive.
With tunnelling and for stations, subterranean engineering and
manual mining work, and stations are all dug out by hand by the
way, compensation for structural settlements, et cetera, is payable
only for consequential building repairs, and that is all you get,
of provable building damage, and I stress `provable', but nothing
more. It resembles repairs payments for coal mining subsidence,
and I have written an article on this called `Blight in the Tunnel'
in 2002 and I have some copies here if anyone wants them. That
incidentally includes a satellite image of the lowering of the
land level all over London caused by the Jubilee Line extension
which was widely published, and Crossrail is four times as big.
For example, even if tunnelling causes differential settlements
and the walls to crack or there is serious noise and vibration
and people and firms have to cease operations for long periods
or even permanently, and there is a recording studio which I will
come to later, they are not reimbursed a penny beyond the cost
of building repairs related directly to the scheme. Non-rail compulsory
purchase schemes do not benefit from these additional privileged
financial advantages over direct claims. These privileges are
allocated only to railways in the UK and only under Victorian-based
adopted general Acts. The Crossrail Bill does not have to adopt
them.
6735. Other European countries are not so restrictive
in their expropriation codes. I understand from two reinsurance
underwriters, one of whom is a relative of my wife, and our client
that for previous schemes of major rail tunnelling in Europe,
compensation was made available for full consequential loss, including
disturbance, from the construction of both the Rome and Barcelona
metro systems, and there will be others, I feel sure. As to structural
settlements, dust and muck, noise and vibration, I am deeply concerned
to see repeated Crossrail evidence that "all was always well
for the JLE" and, therefore, Crossrail too will be all right.
The Crossrail evidence skates over the far more severe environmental
and physical impacts of the much bigger overall size of Crossrail
engineering—a full-size railway the same as the Channel
Tunnel Rail Link. The outline stations in sprayed concrete caverns
will be four times as big as the JLE and likewise the several
almost unmentioned emergency intervention points (or EIPs) on
Crossrail's evidence they simply call them shafts but they are
stations. The twin Crossrail tunnels will have bore-faced areas
of some 50 square metres each, compared to only some—I have
got 20 square metres but I think it is a little more; it is in
the 20s anyway. The tunnelling shot ways themselves and the consequential
damage will increase exponentially; it is not just twice or two-and-a-half
times because it is two-and-a-half times in diameter. Well beyond
any crude 2.5:1 ratio. However, what is worse is the playing down
(I have only seen it once or twice in the evidence I have been
able to look at that has gone before) of prolonged cases of essential
but disruptive compensation grouting for up to 18 months each.
We have had evidence on compensation with Professor Meyer, with
illustrations which I have seen, and it refers somewhere, I think,
to 18 months of grouting. It did not say it for the JLE but it
happened in a lot of other places too, one of which I have been
concerned with directly and heard the result personally. Finally,
that there are no serious structural settlements or attendant
vibration problems arose from the JLE; as to the absence of any
recording studios, I have read the Petition of Mercury Theatres,
thereby overlooking the Stock cases which I was called in to review.
6736. The Stock cases?
(Mr Winbourne) The Stock cases. We are well
aware of cases from the construction of the Jubilee Line Extension.
I am sorry. There were largely uncompensated heavy damage claims
from Mike Stock (that is Mr Stock of Stock Aitken and Waterman,
the well-known composer of the 1980s) of Mike Stock Recording
Studios which is at 100 Union Street Southwark SE1. I would mention
the building is still standing—and I bet you can still hear
it—adjoining the large Jubilee Line Extension Wardens Grove
emergency intervention point. Right next door the ghost station.
So far as I know, that is the only EIP in London but it is only
a quarter of the size of any Crossrail EIPs. It could be inspected,
nevertheless I mention it.
6737. Mr Winbourne, can we turn to the solution
to these concerns in terms of what the Committee can recommend?
(Mr Winbourne) The ideal solution would be
for Parliament to find the legislative time to implement the recommendations
of the Law Commission, which has recognised the need for reform,
to ensure that appropriate compensation can be paid in all foreseeable
cases. I recognise that this is unlikely to happen in time to
benefit those who suffer from the Crossrail construction, but
it does emphasise the importance of, firstly, considering alternative
routes (as Mr Schabas said) which will not affect adversely as
many people during the construction process or permanently thereafter.
Attention should be paid to everyone who suffers, including those
cut out of claiming. This is my standpoint, as a compensation
surveyor. The route should take this into account very much so.
I do not believe they have even considered it. Secondly, to look
for the lowest overall costs; both in terms of engineering and
compensation payable to those adversely affected, whilst at the
same time also considering the interests of those ordinary people
who are unable to make a claim at all—whether they are high
or low in the social and financial scale. This is not only to
save public and private money but also to make for the least environmental
impact levels. Thirdly, it is important that those who need to
claim compensation have a single clear-cut and compulsorily identified
legal entity (this is most important), preferably the Promoter
itself, against which to make all claims and obtain direct payment.
The carefully worded Crossrail responses would avoid such direct
"lead" responsibility. I have read the evidence being
put to other Petitions and I am horrified to see that they are
trying to pass the buck down the line. Unlike the acquiring and
compensating authority in any ordinary CPO, Crossrail appears
to be trying to pass the buck down the construction chain. I am
well aware of cases, from the construction of the Jubilee Line
Extension (JLE), where the lack of, or breaking down of, any single
identifiable entity, against which to enforce claims, caused significant
hardship to claimants. This arose from my careful dealing with
all the work on the Stock case and I only came on it later but
I have a pile of papers this high in my office in relation to
the case which was partly settled and may still be outstanding.
6738. Mr Pugh-Smith: Thank you very much,
Mr Winbourne. That is all I need to ask you.
Cross-examined by Ms Lieven
6739. Ms Lieven: Just one point, sir,
that I want to clarify, just so we can respond and understand
Mr Winbourne's case. So far as your last point is concerned, Mr
Winbourne, and compensation, compensation is payable under the
Bill by the Secretary of State. Is it not?
(Mr Winbourne) What I am saying is that the
way I read—and I might have it wrong, Mr Chairman, but I
do not think so—the responses of Mr Colin Smith in evidence
previously, he refers, when dealing with some of the people at
Shenfield but it does not matter whether it is Shenfield or anywhere
else, that they would look at it in the same way as if it were
an ordinary developer—which is wrong—which is at variance
with the decision in Ocean Leisure, which is left out of your
C2 paper. Secondly, he indicates (I cannot remember the words
but I have got it here) something to the effect that it implies
the contractor will deal with it. I think that is all wrong. What
you must have is a decent compensation set-up, whether it is for
Crossrail or anywhere else, where the authority pays. If they
have to sue the contractor or sue the architect or sue the engineer,
that is their problem. They are the paymaster and it should not
have to pass down the line from the contractors to sub-contractors,
to the professional advisers and, behind them, their indemnity
people and, behind them, a bunch of other lawyers. That is the
team that turned up, as far as I can see from the papers in my
office, to deal with Mr Stock.
19 Committee Ref: A80, Tube Interchanges (WESTCC-32605-059
to 061). Back
20
Committee Ref: A80, The Inadequacy of Compensation (WESTCC-32605-058). Back
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