When the levee breaks: the statutory right to compensation under the Flood Risk Management (Scotland) Act 2009

There are limited circumstances in which there may be a claim against SEPA or a local authority for compensation in relation to flood risk prevention and management operations.

28 March 2024

Submerged tractor in flooded field

In some very limited circumstances, where the value of a person's interest in land has been depreciated (or a person has been disturbed in their enjoyment of land) as a direct consequence of actions taken by the Scottish Environment Protection Agency (“SEPA”) or Local Authorities in relation to flood risk prevention and management operations, there may be a statutory right to compensation. 

Flood Prevention Schemes

The Flood Risk Management (Scotland) Act 2009 (“the 2009 Act”) introduced a new risk-based, plan-led approach to flooding in Scotland, which requires Local Authorities and other bodies, such as the SEPA, to work together to identify high-risk areas and to put in place strategies and plans to combat flooding. This includes Local Authorities delivering Flood Prevention Schemes (“FPS”) to manage flood risks in their area.

Since the 2009 Act was enacted, Local Authorities across Scotland have invested hundreds of millions of pounds in FPS which are designed to prevent or limit (insofar as possible) the damage and disruption caused to homes, businesses, and infrastructure links. Typically this will involve flood defences such as flood walls, embankments, and tree planting in built up areas, as well as altering the course or depth of watercourses. 

These schemes, including one recently completed in Stonehaven, are said to have prevented hundreds of millions of pounds in damages since their construction. There are a multitude of schemes currently in the planning and development or construction stages at the moment, including a £500 million scheme in Grangemouth, a £100 million scheme in Musselburgh, and a £50 million scheme in Millport. 

However, the planning, development, construction, and maintenance of FPS and other flood-related works can cause significant inconvenience, disruption, and in some cases losses to people and businesses who own land in the area. 

Right to compensation 

Many are unaware that section 82 of the 2009 Act potentially provides them with a right to compensation in such circumstances, albeit with strict timescales for lodging such a claim. 

Claims can be made against SEPA or the Local Authority (depending on the type of claim) in respect of, but not limited to, “damage” caused in relation to them carrying out:

  • planning operations and works in relation to a FPS, including flooding caused as a result of the construction; 
  • operations and works in relation to other flood protection works (including temporary works);
  • clearance or repair works; 
  • maintenance works; 
  • drainage or protective works; 
  • provision, installation, maintenance, or repair of flood warning system apparatus; and
  • exercising powers of entry in relation to survey and examination of land and/ or the preparation of flood risk assessments or other maps or plans in connection with flooding.

“Damage” is said to have occurred if the value of a person's interest in land has been depreciated or if a person has been disturbed in their enjoyment of land.

Some typical examples of the types of claims we have dealt with are where:

  • a person is unable to access or utilise part of their land whilst a FPS is being planned, constructed, repaired, or maintained; 
  • where damage may have been caused to land in carrying out any of the above-mentioned operations; or   
  • where the value of their land may have decreased as a result of a FPS having been constructed.

The latter may sound counterintuitive, but in most cases a FPS is constructed with a view of protecting homes, businesses, and infrastructure in built-up areas and the FPS is deliberately designed to divert flood water away from these areas, to other less built-up areas, including onto farmland, which means those landowners downstream actually have an increased risk and severity of flooding as a result of the FPS. This can lead to a decrease in the value of their land as a result, as potential purchasers are likely to pay less for such land, particularly if there is an increased risk of crops and the like being destroyed. 

Two-year time limit for claims

Importantly, appropriate notice of any such claim must be given to SEPA or the Local Authority within two years of the depreciation first becoming apparent or, as the case may be, the first occurrence of the disturbance. The grounds of the claim must be clearly outlined, along with the amount claimed. There is also a ten-year long-stop date in respect of any claims. 

In cases where a FPS has allegedly caused depreciation in value of land, typically the two-year time limit will start to run from the day on which the FPS was completed, but it can be earlier. In relation to claims of disturbing enjoyment of land, typically this will be the first day on which any disturbance occurred, i.e. the first time SEPA or the Local Authority enter onto your land. 

As such, it is imperative that you take legal advice at the earliest opportunity. If you anticipate that you will be impacted at some point by a planned FPS or works etc., then you should seek legal advice in advance rather than waiting until completion of the works or a disturbance. 

Timescales can be tight in many cases, particularly bearing in mind that expert evidence from other parties, such as surveyors, will likely be required to quantify any claim. As we have mentioned, the amount claimed requires to be intimated as part of any claim within the two-year period – it is not enough to intimate it and to follow up with quantification later. 

Any dispute in relation to compensation is to be determined by the Lands Tribunal for Scotland. 

Missing the deadline – professional negligence claims

We have had first-hand experience in advising a client whose former solicitors unfortunately missed the deadline for their compensation claim. The claim was subsequently rejected as “out of time” by the Local Authority, depriving them of around £350,000 in compensation. 

However, we raised a professional negligence claim against their former solicitors and ultimately negotiated a favourable settlement on behalf of our client. This took into account the sum they had lost in compensation, accrued interest, and their legal fees and expenses. 

How can we help? 

Our rural disputes team is part of Shepherd and Wedderburn’s wider rural property and business practice, and our specialists work together on all potentially contentious matters affecting clients living, working, and operating in the rural sector. We aim to resolve disputes with the minimum fuss, without involving the court, and we are experienced in all methods of alternative dispute resolution.

For further information in relation to any of the issues outlined in this article, please contact Thomas McFarlane or another member of our rural disputes team.