High Speed Rail (West Midlands–Crewe) Bill

Earl of Lytton Excerpts

Tuesday 8th December 2020 Lords Chamber

Moved by

[The Earl of Lytton]

16: Schedule 23, page 188, line 16, at end insert—
“9 (1) The Secretary of State must by regulations made by statutory instrument make such alterations as may be necessary to the provision under this Schedule for—(a) the notification to adjacent owners, and(b) disputes and their determination.(2) A statutory instrument containing regulations under sub-paragraph (1) must be laid before Parliament in sufficient time to allow the regulations to come into force not later than the commencement of works authorised by this Act. (3) A statutory instrument containing regulations under sub-paragraph (1) is subject to annulment in pursuance of a resolution of either House of Parliament.”Member’s explanatory statement
This amendment seeks to commit the Government to producing statutory guidance to resolve an apparent gap between safeguards under the Party Wall etc Act 1996 and those remaining following the partial disapplication of that Act by Schedule 23 and the alternative measures in Schedule 2.

[The Earl of Lytton (CB) [V]]

My Lords, in moving Amendment 16, I will speak also to Amendment 17, both relating to party-wall procedures. I thank the Minister and the Bill team for hearing me out on this quite narrow issue and for convening several online meetings. I also thank the noble Lord, Lord Berkeley, and a number of external experts in this specialist field for their advice and support. I remind noble Lords of my own professional involvement in party-wall matters. I hope the Minister will be able to suggest something here, and therefore I trust that it will not be necessary for me to press these amendments.

I proceed by making an apology. In Grand Committee the Minister asked about the numerical incidence of cases in phase 2a that might be subject to party-wall procedures. The estimate of numbers that I provided informally to her was produced by someone else and is probably a mistaken figure, so I confess that I am no further forward. However, I have put out further inquiries and will let her know what the situation is. Of course, cases relating to party-wall procedures under the existing phase 1 are only now beginning to trickle in, so there is a long time lag between setting the Act in motion and cases emerging.

I will summarise for the record the current situation, as follows. First, the Minister told us that Schedule 23 to Bill as drafted, while removing key sections of the Party Wall etc. Act 1996—which I will refer to as “the 1996 Act”—for HS2 purposes, would none the less leave the main elements of the 1996 Act procedures intact. I must beg to disagree. If the claim to entitlements under the 1996 Act is not formally notified, it is incapable of agreement or dissent and there is no default to the dispute procedures or a party-wall award, so the entire rationale and balance of a process that impinges on common-law rights is thereby lost.

Secondly, the Minister suggested that for HS2 arbitration would be simpler and quicker than the 1996 Act dispute procedure, which she claims would delay HS2. I have to say that in all my years of practice I have never heard such a claim, even less seen substantive evidence supporting it.

Thirdly, the Minister averred that Schedule 2 to the Bill provides an adequate replacement for Section 6 of the 1996 Act—the bit relating to adjacent excavation—which is otherwise disapplied by Schedule 23 to the Bill. Replacement in part I can acknowledge, but I have to point out that it is on distinctly less than equal terms. I point in particular to changes in which consent, if a notice is not responded to, is deemed to have been given, instead of the 1996 Act protection of deemed dissent.

Safeguarding adjoining property and the notification of that is, it seems, the sole option of a nominated undertaker—which I will refer to as the NU—whereas this would be challengeable and potentially liable to counternotice under the 1996 Act. To explain further, safeguarding practices may be followed where risks to adjacent buildings arise from HS2 works, but based on internal assessment by the NU in which up to 10 millimetres of building movement is considered acceptable. However, in combination with natural subsoil shifts, this may well be mutually exacerbated and is therefore of considerable significance to owners of nearby buildings even if unimportant in engineering terms.

Fourthly, the Minister stated in Grand Committee that the NU would have to get agreement before commencing work falling under Schedules 2 and 23. However, there is no apparent mechanism for that in the Bill.

Neither external experts nor I agree entirely with the Minister’s analysis, but we do agree on some things: namely, that identical measures already exist in the phase 1 Act, that they were not challenged at the time, and that there was no consultation with expert practitioners on them. I suggest that practitioners were accordingly largely unaware of the proposals. In any event, accepting that phase 1 provisions exist does not make the risks go away.

I submit that for HS2 purposes the 1996 Act process does not remain intact; the essential balances of powers and responsibilities, of investigation and brokering of practical outcomes, cease to exist in the HS2 world. In the 1996 Act, it is a combination of the defining notice, a response and a challenge, followed by an award that gives rise to the rights—not a simple statement in Section 2 of the 1996 Act. The 1996 Act provides that the person proposing works meets the reasonable costs of the neighbour. This follows the obligation to make good any loss or damage occasioned. I am not clear what happens under the Bill, as notice under the 1996 Act customarily sets a clock ticking on costs and expenses. The removal of the requirement for notice, or perhaps a predilection for leaving notice under Schedule 2 to the last moment, might well mean that a prudent neighbour could themselves potentially incur an irrecoverable cost in obtaining advice on physical aspects, possibly before the NU had started to engage.

Of course I accept that we cannot have neighbours running up needless costs for reimbursement or, worse, undermining or destroying essential HS2 works. But this is a far cry from disapplying the provisions for everything that HS2 Ltd may happen to own or control and removing established protections. Hollowing out the 1996 Act and cherry picking the bits that suit HS2 is, of itself, questionable.

I do not see the Bill’s arbitration solution covering anything like the same process as the 1996 Act, in which surveyors negotiate the outcome based on a broad investigative process. Arbitration, after all, is a quasi-judicial process of a scope that needs to be defined. It used to be relatively cheap and quick, but a common criticism now is that it has become legalistic, expensive and slow, and so, I suggest, a good deal less flexible than party wall procedures. I think there will be arguments over the scope of arbitration.

It is clear to me that the Bill, by virtue of Schedules 2 and 23, and for HS2 purposes, does a great deal more than harmlessly disapply parts of the 1996 Act. It is a profound change of procedure and balance and will make the Act scarcely recognisable to most practitioners, especially when the customary consensual process is replaced with an essentially an adversarial one in which previous precedents are not a given. In short, it will require a significant realignment of skills and is likely to involve greater legal input. Awards of the type that occur under 1996 Act will not apply, and the intervention of the courts seems more likely. However, I accept that the bird has largely flown here. It is apparent that the Government will not accept any material changes to the Bill in respect of this matter. Fortunately, it is limited to HS2, but it makes for a bad precedent.

In discussions with the Bill team, the desirability of guidance was raised. I see three justifications for this: first, as a guide to professionals, given an unusual procedure and a significant departure from current established practice; secondly, as an indication of what an adjoining owner can expect; and, thirdly, as a means of fostering good order, cost control and consistent administration.

In the hope that there might be a partial solution in this direction, I took the liberty of asking the Royal Institution of Chartered Surveyors, of which I am a fellow, if it would be prepared to set up a working group, as consultee. I am glad to say that it has agreed to do so if the principle is agreed. I hope this will be welcomed. I have already flagged 14 initial points of my own which I believe any guidance should cover.

I now turn to Amendment 16. I recognise the implications of amending the Bill and the potential practical outcomes for the phase 1 Act of so doing, although of course phase 1 represents the greatest likelihood of issues arising because of the urban nature of some of its route, but future phases of HS2 might also benefit from sorting things out now. However, I believe that there ought to be a statutory hook for any guidance, and that is why Amendment 16 is so framed. The purpose will, I think, be entirely clear—namely, to put on the face of the Bill the requirement for guidance, to identify the means of parliamentary scrutiny and, lest it be forgotten or overlooked, to establish a clear timeframe for its coming into force.

Amendment 17, which I shall speak to extremely briefly, is the fallback. If nothing is agreed, this is “exit without a deal”. It would leave the 1996 Act provisions largely intact, but I accept that it is far from a perfect fit in the Bill simply to disapply Schedule 23.

Therefore, I invite the Minister to confirm what is intended. If she cannot agree to Amendment 16, might she commit to bringing forward a government amendment at Third Reading or, if not, to guidance?

Finally, on an allied matter, I remind the Minister of the query that I raised earlier about the form and final repository for long-term liabilities and obligations arising from works in, adjacent to or beneath neighbouring properties. HS2 Ltd is a delivery vehicle and, I assume, will at some point cease to exist. Can she indicate where long-term legal responsibility will lie and how it will be enforced? I appreciate that she may need to write to me on this subsequently, but it is an important matter, whatever agreements or arbitration awards are reached. I look forward to her reply. I beg to move.

[Lord Berkeley (Lab) [V]]

My Lords, I am pleased to be able to support the noble Earl, Lord Lytton, on these two amendments. We had some useful discussion in Committee, and I know that the Minister and her officials have been working very hard on seeing what the problems are and what the best solution is. Amendment 16 is certainly a way forward, because the status quo is, unfortunately, very unsatisfactory.

One problem, which the noble Earl, Lord Lytton, alluded to, is that party wall issues come only well after the legislation is completed. We are now beginning to see some problems with phase 1. It will be a long time before we see similar problems, although of a smaller scale, with phase 2, but I hope that we can really move forward on this. The RICS and the noble Earl, Lord Lytton, have offered to take this forward, with the hope of creating some statutory guidance, but, if not, there needs to be some other means of ensuring that there is fair play without the project being delayed. I think we all agree that this should not be a way of delaying the project; it should be a way of getting party wall issues resolved quickly and cheaply to everybody’s satisfaction. As the noble Earl said, if we do not get it right, the prospect of litigation and even class actions, with knock-on effects for the cost of HS2, would be very real, and I am sure the Minister will agree that we do not want that.

It is clearly the Government’s view that Schedule 2 to the Bill would be an alternative way of dealing with access to carry out investigations and notifying owners, particularly before carrying out safeguarding works, given the disapplication, by Schedule 23 to the Bill, of Section 6 of the Party Wall etc. Act 1996, which relates to adjacent excavations for construction. In a minute I shall come up with an example which I fear rather indicates that this is not working at the moment.

--- Later in debate ---

As noble Lords will be aware, the route of the phase 2a scheme is rural in nature. Therefore, it is not expected that many party walls will be created by the works authorised by this Bill. I reiterate that, where necessary, the modified process would provide a safe and speedy resolution for both the project and the adjoining owner. I will write to the noble Earl on the question of long-term liability, but, on the basis of my contribution, I hope that he feels able to withdraw his amendment.

[The Earl of Lytton (CB) [V]]

My Lords, first, I thank all noble Lords who participated in this short debate. In particular, I thank the Minister for her generous comments towards me and, most of all, for agreeing to the principle of guidance; I am sure that many professionals will be extremely relieved by that. With that in mind, I can certainly confirm that I will not press this amendment, in the light of what she said.

On the nature of guidance, again, the Minister may not be in a position to respond to me today but perhaps she could guide me on that. I ask her to comment on how non-statutory guidance will sit alongside the Bill’s specific provisions, in the knowledge, of course, that we are all seeking best practice and not just the cheapest and quickest procedure available.

I thank the Minister for agreeing to write to me on the question of residual liabilities. As I anticipated, this matter obviously requires further thought and consideration.

I particularly thank the noble Lord, Lord Berkeley, for his continued support. He gave the interesting example of Park Village East, which is in the phase 1 scheme. I want to explain in non-technical terms my take on this, which is as follows: are the ground anchors being placed underneath a nearby owner’s property for the purposes of restraining something else that is not part of that property, or are they to safeguard the adjacent property itself from the HS2 works? If it is the former, I suggest that it is a question of compulsory purchase to acquire the necessary rights. If it is the latter, it might fall under Schedule 2 to the Bill. This highlights the need to clarify what procedure is being engaged in any given instance. That is what I suggest formal notice should do.

The noble Baroness, Lady Randerson, kindly lent me her listening ear; I am extremely grateful to her for her confidence. She asked what I will call the $96 question, which remains unanswered. I am grateful to her for raising that issue.

The noble Lord, Lord Tunnicliffe, asked why significant changes to the Party Wall etc. Act were needed. Crucially, he pointed to the question of good management. I agree with that, but I also note his caveats and reasons why he would not have been in a position to support the amendment had it been pressed to a Division.

I finish by paying tribute to the group of party wall specialists who have put in hours of time to help and advise me. I say this to them: I could not have done it without you. I thank them very much indeed.

On that basis, I beg leave to withdraw the amendment.

Amendment 16 withdrawn.