Commentary on Sections Part 6 – Compensation
155.This Part sets out the framework for compensation (section 47), matters that must be taken into account when considering compensation (sections 48 and 49), entitlement to compensation and the process for addressing any dispute as to that entitlement or the level of compensation (sections 50 to 56).
156.The Act applies the same procedural rules, safeguards and requirements regarding compensation as generally apply for land and rights purchased compulsorily. The rules for calculating the basis and amount of compensation are contained in the Land Clauses Acts (see paragraph 75) and the Land Compensation (Scotland) Act 1963 (c.51) and the Land Compensation (Scotland) Act 1973 (c.56).
157.The 1963 Act, which deals with assessing compensation and resolving disputed compensation claims, applies to the compulsory acquisition of land. The 1973 Act covers compensation for a decrease in value of land caused by use of public works and defines the physical factors that will give rise to a claim for compensation. The general principles with regards to compensation that these Acts embody are collectively known as the “compensation code”.
158.The 1845 Lands Act provides that in estimating the compensation to be paid, regard is to be had first of all to the value of the land to be taken and secondly to the depreciation in the value of any remaining land caused by severance or injurious affection (section 61 of the 1845 Lands Act). This is the basic principle by which compensation is assessed. Section 21(1) of the Act incorporates section 61 of the 1845 Lands Act.
159.In addition to this basic principle it is generally accepted that any increase in value to land caused by the scheme underlying the acquisition is to be ignored. This principle is embodied within the 1963 Act which provides that:
	any depreciation in the value of land due to the prospect of the land being compulsorily acquired is to be ignored (section 16 of that Act);
	any increase or decrease in the value of the land due to the scheme underlying the acquisition is to be ignored (section 13, schedule 1); and
	any increase in the value of adjoining land in the same ownership as a result of the scheme is to be set off against the compensation for the land compulsorily acquired (section 14 and 15 and schedule 1).
160.Accordingly, compensation is generally available for:
	the value of land;
	disturbance, being losses such as, for example, removal expenses or loss of profits, arising as result of displacement from the land acquired;
	injurious affection being depreciation, for example, caused by the construction or use of works, in the value of land retained by a land owner; and
	severance being a specific type of injurious affection arising when part of an area of land held by the same owner is taken.
161.The 1963 Act contains provisions on the assessment of compensation in respect of interest in land. In particular it sets out in section 12 the rules on assessing compensation and provides that the Lands Tribunal for Scotland is responsible for dealing with any disputes as to compensation for compulsory purchase.
162.Part 6 of the Act makes particular reference to the aforementioned Acts and where appropriate explanations are provided as to the application or disapplication of various provisions within those Acts as they relate to provisions within the Act.