Another EIA-based challenge to Planning

Another EIA-based challenge to Planning

May 2011

By Paul Denholm - Senior Underwriter/Head of Planning Risk & Solicitor

Until the recent case of R (Save Britain's Heritage) v Secretary of State for Communities and Local Government T[2011] EWCA Civ 334, it was not necessary to obtain planning permission for most demolition works as it was thought that the Town and Country Planning (Demolition - Description of Buildings) Direction 1995, plainly - and validly - excluded the total demolition of a broad range of buildings from the definition of Development in the Town and Country Planning Act (TCPA).

In the recent case of R (Save Britain's Heritage) v Secretary of State for Communities and Local Government T[2011] EWCA Civ 334, the Court of Appeal ruled that an Environmental Impact Assessment (EIA) may be required for demolition works that are likely to have significant effects on the environment and, as such, will be captured by the scope of the EU EIA Directive. In making this ruling the court granted the Appellant following declarations:-

1) Demolition of buildings is capable of constituting a project falling within Annex II of the EU EIA Directive; and

2) Paragraph 2(1)(a)-(d) of the Town and Country Planning (Demolition - Description of Buildings) Direction 1995 is unlawful and should not be given effect.

What does this mean?

Following this decision, the demolition of, for example, commercial buildings will now be within the meaning of "Development" in the TCPA and planning permission will be required for demolition. For developers who are intending to make a planning application that involves the demolition of a building, consideration must now be given to the issue of whether, having regard to the impact of both the demolition (as well as the impact of the proposed use and development), an EIA will be necessary or not.

Many planning applications for demolition will now have to be "screened" by local planning authorities under EIA regulations to consider whether or not an EIA will be necessary. A simple failure to undertake this screening process may render a planning permission vulnerable to challenge.

Developers who hold land and buildings with the benefit of a planning permission for demolition and redevelopment (or are transacting in such land), should consider whether the planning permission will be robust to challenge - for example, the planning process may have involved the production and consideration of an EIA. However, the planning permission may be invalid, unless the EIA considered separately the impact of the proposed use and development and now also the impact of the demolition.

First Title's Comment

This is not the first in a series of challenges to planning laws, consents or approvals, on the basis of the EU EIA Directive. It is, nevertheless, surprising that long standing legislation such as the Town and Country Planning (Demolition - Description of Buildings) Direction 1995 has been found not to validly exclude the total demolition of a broad range of buildings from the definition of Development in the TCPA. This reflects the lack of compatibility between on one hand, the EU EIA Directive and on the other hand planning laws - and the consents and approvals granted in terms of those laws and relied upon by property investors. The Department for Communities and Local Government is reportedly considering the outcome of the case and the next steps for the Government.

This risk and vulnerability to challenge of planning permissions is compounded by the state of flux and uncertainty in the planning system, including the scrapping of regional planning policies by the coalition government some length of time in advance of the proposed new National Planning Framework.

If a planning permission is successfully challenged by judicial or statutory review, this incertitude in the planning system may jeopardise the prospects of successfully protecting the investment value of a site by attempting to obtain a replacement planning permission.

First Title's legal indemnity insurance solutions can be used to off-set these risks. Our policies provide protection against a variety of losses, including loss in land value as a result of a planning permission being quashed by judicial or statutory review. Our underwriting services and associated insurance products draw upon the experience and expertise of our team, which includes insurance professionals and qualified solicitors.  We also have first-hand experience of local authority planning procedures.

What now

Expert-to-expert, we will consider with you an appropriate legal indemnity insurance solution.

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